How the Clean Energy Plan Is Transforming the US

In August 2022, President Biden signed the Inflation Reduction Act (IRA) and launched a massive clean energy program promising to create jobs and help families save with clean energy.

So two years on, how is the clean energy plan delivering?

In a big, big way.

Putting Americans to Work

In just two years, the plan has led companies to launch or announce some 646 clean energy projects across 47 states and Puerto Rico, accounting for 334,565 new jobs and $372 billion in investments.

Critically, many of these investments are going to parts of the country that don’t always see a lot of ribbon cutting. According to a Climate Power report, companies have announced 290 clean energy projects in low-income communities across the US since the plan passed, bringing $114 billion in investments in 38 states and 134,385 jobs with them.

The plan has also been a huge boon for rural America, with companies announcing 117 new clean energy projects with $53 billion in investments and 52,128 jobs across 33 states.

By any measure, that’s a huge win.

Flipping the Script on Climate Action

For most of US history, it’s been cheaper for families and businesses to choose dirty fossil fuel technologies that drive climate change than clean alternatives. And for most of the nation’s history, the majority of climate and environmental policy has been more sticks than carrots. Do this, not that, or face penalties.

The Obama Administration’s proposed Clean Power Plan, for example, mandated emissions targets for each state’s power sector and then left the choice of how to meet that target to the state, prior to being stayed and ultimately struck down by the Supreme Court.

The recent clean energy plan flips the script on both of these storylines. In a nutshell, the clean energy plan aims to encourage households, businesses, utilities, and others to make the better choice for the climate by making that choice more affordable. To put it simply, if burning stuff is bad, make the clean energy alternative an easier choice.

How? Here’s where the carrots come in. The plan offers households and businesses a range of pretty significant incentives, from up to $7,500 in tax credits on selected electric vehicles to up to 30% off the cost of solar panels or a heat pump (and critically, including associated costs like labor, permitting, and inspection).

The logic here is clear. More than six out of 10 Americans want more clean energy over fossil fuels. Over half want a rapid transition to clean energy. The clean energy plan in effect says, ok, let’s do it – and you can help.

The question is, how many homes and businesses would step up? After all, these are major expenses and not choices everyone can make.

The answer is: a lot.

Some 3.4 million households have used the plan’s incentives to save $8 billion to switch to clean energy and technologies in their homes and cut energy bills by making their homes more efficient.

Last year, a record 9.2% of all new cars and trucks sold were either electric or plug-in hybrids, fueled by plan incentives.

Plus, with help from the clean energy plan, an incredible 750,000 homes have installed solar in the past two years.

Solar is Growing and Growing and Growing

Thanks mostly to the increasingly growing popularity of home solar systems, over 5 million solar systems have been installed across the country. Along with utility-scale solar, the technology produces enough electricity for 32.5 million households. According to the Solar Energy Industries Association, that’s enough to offset the emissions of 12 million Americans.

Notably, more than half of this capacity has come since 2020 – with the country on track to reach 10 million residential solar systems by 2030.

Transforming the Economy

One of the most quietly revolutionary parts of the clean energy plan is how it’s turning the world’s largest economy into a vehicle for climate action.

Analysis by American Clean Power shows that the plan has sparked a manufacturing renaissance in the US, with 160 facilities in development or operation producing enough clean technologies to power over 47 million US homes.

Separate analysis by the Rhodium Group confirms the boom and its larger impact:

“Clean energy and transportation technology is proving to be one of the largest industries in the US economy. The investments in greenhouse gas (GHG) emissions-reducing technologies tracked over the past two years accounted for 4.5% of total US private investment in structures, equipment, and durable consumer goods in the United States . . . Since the IRA’s enactment, clean investment has accounted for more than half of the total US private investment growth.”

Adding more detail to this claim, the report goes on to capture how well federal investments from the clean energy plan have attracted much greater investments from the private sector, noting, “We estimate that private spending in those technologies over the same time period was 5-6 times larger than public investment.”

So What’s the Takeaway?

The one metric that matters most when it comes to the clean energy plan is emissions. And in 2023, US emissions fell by nearly 2% from 2022 levels, representing a 17.2% decline from 2005 levels.

That 17.2% from 2005 levels is a far cry from the 50–52% reduction by 2030 the US has pledged to reach. Which is to say, there’s a lot of work still to do to slash emissions and speed the shift to clean energy to get within shouting distance of that goal – and not a lot of time to do so.

But it’s also worth noting the scale of the task here. Shifting the course of the world’s largest economy from net polluter to something like an engine for climate action invites comparisons to shifting massive shipping container boats mid-ocean – it takes time, but even fractions of a degree matter tremendously in determining the final destination. And as the world’s largest economy, what the US does sends a powerful message to the international community as a whole on what’s possible.

It would be a mistake to confuse the incredible progress we’ve seen in two years with final victory in the climate fight. But it would also be a mistake to ignore the fact that today there’s a door open to a livable future thanks in part to this plan that was barely cracked just two years ago. And that’s real cause for hope.

To learn more about the plan and how you can help build a clean energy future for the US, register for our free digital climate leadership training with former Vice President Al Gore in October.