Inflation Reduction Act Incentivizes Utilities to Use Digital Tools for Participation in Energy Efficiency Programs

Abstract

The Inflation Reduction Act (IRA), signed into law on August 16, 2022, authorizes $500 billion in new spending and tax breaks for the clean energy and healthcare industries. Clean energy funding, totaling approximately $370 billion, is allocated to help achieve the Biden Administration's near-term goal of reducing carbon emissions by 40 percent by 2030. The clean energy funding focuses on deploying readily available technologies that developers, companies, and consumers can adopt immediately to help achieve these goals. Investment tax credits and production tax credits exist across the energy efficiency value chain to maximize impact. On the energy production side, the IRA extends existing tax credits and introduces new credits for renewable energy production. Tax credits for consumers and businesses are intended to increase efficiency of energy use and as a result decrease carbon emissions.