Inflation Reduction Act: What You Need To Know

On August 16, President Biden signed into law the much-anticipated Inflation Reduction Act. The Act includes numerous clean energy, decarbonization, and climate-related provisions. While these provisions are less ambitious than those of Build Back Better, the Act is still projected to significantly reduce greenhouse gas emissions by the end of the decade. The Act also seeks to promote environmental justice and equity. A summary of some of the Act's major environment and energy-related provisions is provided below.

Clean energy tax credits and financial assistance

The Act's many clean energy provisions seek to accelerate the transition to lower-carbon options. On the production tax credit (PTC) side, the Act extends the current Section 45 PTC for certain qualified renewable energy projects through 2024 and, beginning in 2025 and through 2032, replaces it with a technology-neutral Clean Electricity Production Tax Credit (Section 45Y). Section 45Y creates a