Incentives in The Inflation Reduction Act (IRA) will lower the cost of renewable energy in the U.S. dramatically over the next decade, according to analysis from the ICF Climate Center, a global consulting firm. They’ve deduced that the new US climate law will make clean energy projects easier to finance across the country, quickening the pace of the US energy transition. For more read: A “Supercharge” Of Renewable Energy Development Is Taking Place Around Us.
- All of the technologies the authors of this report analyzed — whether mature wind and solar or emerging battery, hydrogen, and carbon capture and sequestration (CCS) — would see double digit percentage declines.
- The IRA’s broad definition of energy storage for the ITC should help emerging alternatives to lithium ion batteries come to market, increasing the diversity of energy storage options,
- Hydrogen could see the biggest cost decline — a huge reduction anywhere from 52% to 67% — of any technology. Green hydrogen facilities that take advantage of the climate law’s tax credits could become cost-competitive with new natural-gas-powered facilities by 2030.
- The authors assume within their projections that policymakers will address some sticky obstacles confronting clean energy projects, including “not in my backyard” (NIMBY) reactions and interconnection problems.
Path to 100% Perspective
A 100% renewable energy future in the United States is possible by 2050 if everyone works together, and the IRA definitely sets the stage for an influx of development. While increasing renewable energy sources, like wind and solar, the U.S. must also determine a plan to realistically phase out fossil fuel plants. Renewable sources can be intermittent, so battery technology will need to improve. Investing in technology like Wartsila’s flexible power plants, which can run on sustainable fuels like hydrogen, will also provide the dispatchability needed to ensure reliable power.