On Aug. 16, President Joe Biden signed the Inflation Reduction Act into law, directing billions of dollars to Americans looking to upgrade their homes, businesses and cars.
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One provision of the law allows Americans making less than $150,000 a year to claim a $7,500 tax credit for buying an electric car.
The law also provides $9 billion in rebates to help people electrify their home appliances and make their houses more energy-efficient. It’s also allowing Americans to claim a tax credit for installing heat pumps in their homes.
Altogether, the Inflation Reduction Act is showering $369 billion on clean energy programs and businesses throughout America.
And clean energy investors already have something to celebrate. In the months since the act was signed into law, renewable energy companies like NextEra Energy Inc. have handily outperformed the S&P 500. The law is controversial, as is any law sweeping enough to decarbonize 40% of America’s economy over the next eight years as this law purports to do. But from an investing perspective, one thing is clear: History shows that clean energy catalysts on this level can give investors the chance to multiply their money many times over.
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You might remember President Barack Obama’s 2009 stimulus package, which gave billions of dollars to clean energy companies and “created Tesla as we know it,” according to Bloomberg. Tesla Inc. shares have returned almost 10,000% since — even after their recent downturn. Other clean energy companies that received loans or grants like Brookfield Renewable Partners LP have returned well over 1,000%.
Potential benefits to solar investors are especially enticing. In the years after the 2009 stimulus package, America’s solar industry grew by 2,500% — and Biden’s clean energy bill is much larger than that.
In 2023, the White House plans to assist 7.5 million Americans in putting solar panels on their rooftops — and that could be a major opening for startups like Qnetic, a startup creating innovative power storage solutions, and other startups in the space that helps its customers transition to the electric grid painlessly and seamlessly.
As Bloomberg has pointed out, the global cost to decarbonize power grids could amount to more than $28 trillion. That’s a big deal for companies looking to bring consumers toward an all-electric life.
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