The Inflation Reduction Act could mean significant wins for investors who put money in clean technology and sustainability-focused stocks during the recent stock market decline. The law could increase the U.S. energy resilience and fiscally guide the country toward a more sustainable future. The bill is the country’s most significant act designed to battle climate change, and the support it gives these companies means big dividends for investment in clean energy.
Senate Majority Leader Chuck Schumer and Senator Joe Manchin proposed the package to significantly reduce the country’s soaring inflation by encouraging investment in sustainable energy companies. It includes numerous tax incentives for the energy sector, particularly clean power grid technology such as solar, wind, battery, and hydrogen.
Significant new growth exists in capturing hydrogen, a by-product of natural gas and a key element in fertilizers. Numerous fossil-fuel companies are working to capture the carbon released in this process to reach their own environmental impact goals. The law will likely provide a huge boost to new industries and their investors that focus on carbon emissions capture technologies.
“This bill is the largest investment ever in combating the existential crisis of climate change,” said President Joe Biden. “It addresses the climate crisis and strengthens our energy security, creating jobs manufacturing solar panels, wind turbines, and electric vehicles in America with American workers. It lowers families’ energy costs by hundreds of dollars each year.”
The law also encourages the ability for companies to keep more jobs in the American market, especially in energy-producing states such as New Mexico, West Virginia, and Wyoming, which have lost jobs to the overseas market.
In addition, the law will help people purchase new or used electric vehicles and install energy-efficient cooling and heating systems in their households via tax credits.
It also incentivizes businesses to cut methane emissions with bonus payments to those who do and significant penalties for companies who do not.
“The Inflation Reduction Act is a victory for all Americans and shows the world that the United States is still an ally in the global fight against climate change,” said Ani Dasgupta, CEO of the World Resources Institute. “The transformational legislation provides breakthrough investments and tax credits that will save households money, create millions of jobs, and boost energy security — all while helping put the U.S. within striking distance of its climate goals.”
The Inflation Reduction Act is a crucial part of helping the nation reach its 2030 sustainability goals and the 2050 net-zero carbon emissions milestone. Investors who have supported renewable and clean tech companies through the wild stock market ride of the last year are likely to see stability and strong growth thanks to this new legislation.