What does the “Inflation Reduction Act” (IRA) have to do with Energy?
The Inflation Reduction Act was a federal law passed in 2022 by the Biden administration. While the jury is still out as to whether or not the law was actually able to reduce inflation (and likely will be for decades…), it was a landmark bill given the breadth of policies enacted. From lowering prescription drug prices, changing corporate tax rates, expanding the Affordable Care Act, modernizing the IRS, to addressing energy security and climate change, the impact of the law will be felt across the economy for many years to come.
On the energy side, it was a massive accelerator for renewables. Energy provisions were forecast to spend $400B through 2031, but that has most recently risen to $790B through 2033 given the costs are primarily composed of tax credits. The renewables “gold rush” is likely accelerating faster than anyone expected given the additional incentives brought about by the IRA. While the increased expenditure makes it less likely the law will actually contribute to reducing inflation, it is certainly a massive boom for the solar industry and jobs.
The chart below shows that a major portion of the increase will come from increased spend in manufacturing, a good sign for solar manufacturing jobs.
How will this impact solar deployments?
With the passage of Act just last year, we have not begun to see the impact from all of the renewables incentives. 2023 was marked by many headlines and project proposals that have kicked off development, manufacturing, and deployment across the country. Investment and adoption should really begin to accelerate next year in 2024 from the current growth trajectory.
The SEIA (Solar Energy Industries Association) estimates that the IRA will lead to 48% more solar deployment than would have otherwise occurred without the incentives. Below is a chart of the impact by year on Solar Installations as measured by MWdc from the SEIA. What was strong linear growth without the IRA has now dramatically accelerated.
By 2033, Solar energy will have a total capacity of 669 GW. For reference, the entire electrical grid of the United States today is 1,250 GW, so that means the solar capacity that we will have in 2033 will be more than half of our total grid today!
And how will this impact Solar Jobs
The SEIA estimates that the IRA will lead to creation of 137,000 net new jobs in the already growing solar industry. Many of these new jobs will come from the manufacturing space given the added incentives for manufacturers. Below is breakdown by year from the SEIA:
As you can see, what was limited growth in Solar jobs in 2023 will quickly accelerate in 2024. Now, the end of the year, is the perfect time to brush up on your resume if you’re a veteran solar worker or start exploring a new career in an industry that is effectively guaranteed to balloon.
Check out our career and jobs pages for more information on these types of roles:
Installation & Ops - We’ll expect to see continued growth in installation to match the increase in installation. As more solar panels come online, more and more operations & maintenance will be needed
Manufacturing - Manufacturing will be one of the fastest growing job segments in the solar industry over the next decade. If you’ve thought about going back to earn an advanced degree or certification, now would be the perfect time to do so
Sales & Distribution - As we ramp up production and installation, we’ll need a growing sales and marketing workforce to manage customer relationships.
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