February 2025

Inflation Reduction Act delivers massive economic boost and 4X return on investment, says report

A new independent study reveals that the Inflation Reduction Act (IRA) will deliver substantial economic benefits for the United States, notably growing the economy by $1.9 trillion over the next ten years.

The benefits extend across the energy sector, positively impacting renewable resources, oil, gas, hydrogen, nuclear energy, and battery storage systems as well as the power sector, transportation, manufacturing, and more.

Among the most significant impacts in the last two years is the substantial increase in domestic manufacturing of clean energy systems.  

The report, commissioned by the American Clean Power Association (ACP) and conducted by ICF, analyzed the economy-wide impacts of the IRA’s energy tax credits, finding that the legislation will incentivize significant investments, create millions of jobs, and boost economic growth, having a lasting impact on the U.S. economy. 

The study examines the IRA’s impact across various sectors, including power, transportation, buildings, sustainable aviation fuels, hydrogen, and manufacturing. The findings demonstrate the IRA’s ability to incentivize investments in clean energy technologies and infrastructure, driving economic growth and reducing greenhouse gas emissions. This study underscores the immense potential of the act to drive economic prosperity and energy innovation, a powerful tool for attracting investment, creating jobs, and deploying more energy.  

The report’s findings highlight the significant economic benefits that will result from the act’s implementation. Key findings include: 

• Massive Economic Impact: The IRA will spur $3.8 trillion in net spending across the U.S. economy, creating a 4X return on taxpayer investment when considering both economic and emissions benefits. 
• Economic Growth: The IRA will grow the U.S. economy by $1.9 trillion, contributing to a stronger and more resilient economy.
• Job Growth: The act is expected to create 13.7 million jobs over ten years, providing a significant boost to the U.S. labor market. 
• Increased Household Income: Investments resulting from the IRA will add $846 billion to household income, improving the financial well-being of millions of Americans. 

“The clean energy tax credits have significantly increased domestic energy production, revitalizing communities across the country and lowering consumer energy bills,” said ACP Chief Executive Officer Jason Grumet. “By supporting our nation’s diverse array of energy resources, the IRA is strengthening our national security and enhancing economic competitiveness. 

“With energy demand skyrocketing, the American energy industry must rise together to provide electricity that is affordable, reliable, and clean,” added Grumet. “Simply put, consistent federal policy is essential to American power.”

https://www.cleanpower.org