Beatriz Rosa of Nelson Mullins Riley & Scarborough. . Beatriz Rosa of Nelson Mullins Riley & Scarborough. .

The Inflation Reduction Act (IRA) has initiated a transformative policy shift in the United States' approach to climate change, energy transition and economic growth. Signed into law in August 2022 with a commitment of $369 billion toward energy security and climate change initiatives, the IRA is designed to stimulate the renewable energy sector by providing a comprehensive set of incentives for producers and encouraging the adoption of clean energy technologies.

The IRA introduced several incentives specifically tailored to benefit renewable energy producers, fostering an environment conducive to growth and innovation. A 2024 report shows that the IRA has driven a 43% increase in investment in clean energy production and industrial decarbonization compared with 2022. Notably, investments in utility-scale solar and energy storage solutions increased 56% and 130%, respectively, after the enactment of the IRA. The increased tax credit funding has been key to offsetting rising interest rates and not causing a retreat in renewable spending.