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Wood Mackenzie says U.S. renewable investment to top $110 billion annually by 2031

January 19, 2023

The Inflation Reduction Act (IRA), flagship legislation focused on accelerating decarbonisation in the US, will boost annual investment in renewables from $64bn (€59bn) in 2022 to nearly $114bn by 2031, according to Wood Mackenzie.

The market analyst’s latest report, “Boom time: what the Inflation Reduction Act (Act) means for US renewables manufacturers”, provides an initial assessment of how the act will support the expansion of US renewables equipment manufacturing capacity, though specific opportunities will vary per segment.

Daniel Liu, principal analyst at Wood Mackenzie and lead author of the report, said: “The IRA will completely reshape the renewables supply chain in the US, incentivising the reopening of shuttered facilities as well as provide opportunities to build entire equipment supply chains from scratch.”

Two key provisions of the IRA are likely to be game-changing for renewables equipment manufacturers.

First, it provides a tax credit, known as the advanced manufacturing production credits (AMPC), for US-made renewable equipment.

Second, the act incentivises developers of US renewable projects to purchase domestically produced equipment by providing an additional tax credit if they meet domestic content requirement (DCR) thresholds.

[Staff Report]

More: IRA to boost US annual renewables investment to $114bn

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