IMPLEMENTING THE INFLATION REDUCTION ACT: A ROADMAP FOR STATE ELECTRICITY POLICY

This report by Energy Innovation provides a guide for state policymakers to leverage the Inflation Reduction Act (IRA) of 2022 to accelerate the transition to clean electricity. It details the mechanics of clean energy tax credits, reinvestment financing for fossil infrastructure, and transmission provisions, while analyzing independent modeling of the IRA's potential to reduce U.S. electricity sector emissions and lower household energy costs by 2030.

• The Inflation Reduction Act (IRA) provides $370 billion in climate and clean energy investments, which independent studies suggest could reduce U.S. greenhouse gas emissions by approximately 40 percent by 2030.
• Four independent studies converge on the finding that the IRA's clean energy provisions could make a grid consisting of 73 to 76 percent clean electricity the lowest-cost pathway for the U.S. by 2030.
• The IRA's tax credits for clean electricity are designed to last at least ten years, continuing for projects starting construction through 2032 or until the electricity sector's greenhouse gas emissions are at least 75 percent lower than 2022 levels.
• The IRA introduces 'direct pay' for tax-exempt entities (such as municipal utilities and tribal utilities) and 'transferability' for for-profit entities, allowing them to trade tax credits for cash and circumvent complex tax equity partnerships.
• The energy infrastructure reinvestment financing provision (section 50144) authorizes the DOE Loan Programs Office to guarantee up to $250 billion in loans through 2026 to help utilities reduce fossil infrastructure debt and replace power plants.
• Rural electric cooperatives are eligible for $9.7 billion in grants and financing through the U.S. Department of Agriculture to retire coal plants and invest in zero-emission systems.
• The IRA includes advanced manufacturing production tax credits for components such as solar cells, wind turbine blades, and battery modules, with full values running through 2029.
• The IRA and the Infrastructure Investment and Jobs Act (IIJA) provide combined funding for transmission, including $2 billion for facility financing loans, $760 million for siting grants, and $100 million for interregional and offshore planning.
• Economic modeling suggests the IRA could create between 1.2 million and 1.7 million new jobs by 2030, primarily in the construction, manufacturing, and utility sectors.
• The IRA is projected to save average U.S. households between $112 and $320 annually in energy bills by 2030 relative to business-as-usual scenarios.

APA

O’BOYLE, M., ESPOSITO, D., & SOLOMON, M. (2022). IMPLEMENTING THE INFLATION REDUCTION ACT: A ROADMAP FOR STATE ELECTRICITY POLICY. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Implementing-the-Inflation-Reduction-Act-A-Roadmap-For-State-Policy-1.pdf

Chicago

O’BOYLE, MIKE, DAN ESPOSITO, and MICHELLE SOLOMON. IMPLEMENTING THE INFLATION REDUCTION ACT: A ROADMAP FOR STATE ELECTRICITY POLICY. Energy Innovation, 2022. https://energyinnovation.org/wp-content/uploads/Implementing-the-Inflation-Reduction-Act-A-Roadmap-For-State-Policy-1.pdf.

Wikipedia

{{cite report |last1=O’BOYLE |first1=MIKE |last2=ESPOSITO |first2=DAN |last3=SOLOMON |first3=MICHELLE |title=IMPLEMENTING THE INFLATION REDUCTION ACT: A ROADMAP FOR STATE ELECTRICITY POLICY |publisher=Energy Innovation |date=October 2022 |url=https://energyinnovation.org/wp-content/uploads/Implementing-the-Inflation-Reduction-Act-A-Roadmap-For-State-Policy-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{oboyle2022implementing, author = {O’BOYLE, MIKE and ESPOSITO, DAN and SOLOMON, MICHELLE}, title = {{IMPLEMENTING THE INFLATION REDUCTION ACT: A ROADMAP FOR STATE ELECTRICITY POLICY}}, institution = {Energy Innovation}, year = {2022}, month = oct, url = {https://energyinnovation.org/wp-content/uploads/Implementing-the-Inflation-Reduction-Act-A-Roadmap-For-State-Policy-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }