Global companies have a new way to reduce costs while advancing their environmental objectives. The landmark U.S. Inflation Reduction Act (IRA), signed into law in 2022, aims to substantially lower the nation’s carbon emissions by directing federal spending to domestic clean energy development and manufacturing. It does so in part by offering tax credits to corporations that invest in or produce U.S. renewable energy. This allows businesses to save money by deducting a portion of investment costs, make progress toward their net-zero goals and bolster U.S. manufacturing jobs.
Over the next 10 years, IRA tax claims could total in the hundreds of billions of dollars,1 as corporations aim to capitalize on the benefits. Jorge Iragorri, Head of Renewable Energy Investments at Morgan Stanley, explains how corporations and investors should think about the opportunity.