On August 16, 2022, the Inflation Reduction Act (the “Act”) was signed into law. This legislation is the most comprehensive energy and climate policy for the US, which includes $369 billion in funding and tax credits for climate and energy programs. For the renewables industry, the Act may as well be named the “Energy Economy Act.” The Act provides decade-long support through measures such as the extension of the federal Investment Tax Credit (“ITC”) at the full 30% level, but it goes further by adding up to 20% more in additional incentives to the ITC; 10% more for US equipment content, and 10% more for projects located in low income communities. Beyond supporting investment in renewable energy projects, the Act contains incentives that encourage investing in US-based manufacturing, workforce development, and energy infrastructure.
The dynamic around climate and clean energy has changed because of this Act. Large, brand-name companies across industries are no longer looking at ESG-related (Environmental, Social, Governance) investment goals as just something where they don’t want to be left behind, rather they are looking at how to be first in line for the opportunities to invest and profit from this economy with the Act as a catalyst.
Twain is preparing to be a key player in this reinvigorated energy economy. We are poised to deploy capital into many of the sectors impacted by the Inflation Reduction Act, including solar, energy storage, biofuels, hydrogen technology, and EV infrastructure. We pride ourselves on our flexibility, creativity, and forward thinking, and are ready to dive in and create financing solutions for renewables and the broader infrastructure needed to support the energy economy. “Our team is very excited about this energy and climate legislation and investment by our nation, and we are ready to be a thought leader and major vessel in delivery of the new energy economy,” says Michael Park, Director of Renewable Energy at Twain.