United States

The historic Inflation Reduction Act (IRA) package has propelled the US to the forefront of the energy transition, creating a ripple effect throughout the world, impacting supply chains and the renewable energy investment landscape. Domestically, the IRA is transforming the American energy system, from grid modernisation to highlighting the need for permitting reform and transmission expansion. While it is clear the IRA, and its significant investment incentives, cannot be replicated by most countries in the world, its present and future achievements serve as real-time case studies for the socio-economic benefits of deploying more clean energy.

Taking stock of IRA-related progress

Due to the IRA, power market consultants such as BloombergNEF, S&P Global and Wood Mackenzie now expect 408 GW of utility wind, solar and storage to be built in the US over the next seven years, compared to the expected 390 GW in February 2023. Breaking this figure down, onshore wind represents 23% of the market, growing from 7.5 GW in 2024 to 16 GW in 2030, and offshore wind expectations are approximately 14 GW by 2030. Utility-scale solar accounts for 53% of the forecast, from 25 GW in 2024 to 36 GW in 2030, while the energy storage market, in which standalone storage can now claim the Investment Tax Credit (ITC), expects to add 81 GW by 2030, capturing 20% of the market.

One of the primary objectives of the IRA is to develop domestic renewable energy supply chains. To date, 123 new manufacturing facilities or facility expansions have been announced since the passage of the legislation. This includes 12 onshore wind power manufacturing facilities, 9 offshore wind facilities, along with 78 solar facilities, 20 grid-scale battery storage facilities or facility expansions and 4 grid connection facilities. From this total, 44 facilities have either completed or are currently under construction. Once all in operation, these facilities will support nearly 42,000 new manufacturing jobs.

Focusing on the US domestic wind market shows the IRA is building on a solid foundation. At present, there are 16 active primary (blades, towers, nacelles) wind manufacturing plants located across 12 states. Moreover, there are over 450 wind-related manufacturing facilities in the US supporting more than 20,000 manufacturing jobs. GE Vernova, Siemens Gamesa and Vestas have a combined capacity to assemble approximately 15 GW annually, 15% higher than the previous year, primarily due to GE Vernova's newly inaugurated nacelle manufacturing facility in Schenectady, New York. The US still depends on specific imports to meet domestic demand, trading primarily in the wind sector with Mexico, Germany, India, Spain and Denmark. In 2023, the US onshore wind industry imported USD 1.5 billion of wind equipment, though imports fell 34% in 2022 and a further 26% in 2023, marking the lowest levels of import volumes in the past 10 years as local capabilities have expanded.