One year ago, on August 16, 2022, President Biden signed the Inflation Reduction Act into law. It represents the largest federal commitment to clean energy and climate action in United States history. This landmark legislation is central to helping the country meet its climate objectives and reinforce energy security, while investing in domestic industries, supporting the creation of high-quality jobs, lowering energy and health care expenses for households, and making the federal tax system more equitable.
Only twelve months after enactment, measurable progress is already visible in the lives of American workers and families, including communities that have historically been excluded from economic growth and environmental benefits. Independent analyses estimate that the Inflation Reduction Act’s clean energy and climate provisions have already supported more than 170,000 clean energy jobs. Over the past year, companies have announced more than $110 billion in new clean energy manufacturing investments. The law is also directing billions of dollars toward climate resilience efforts and enabling millions of older adults to save money, in part because insulin for Medicare beneficiaries is now capped at 35 dollars per month.
To mark the first anniversary of the Inflation Reduction Act, the Biden-Harris Administration is launching a new feature on Invest.gov. This resource presents real-world examples from all 50 states and U.S. territories that illustrate how the Inflation Reduction Act and the President’s broader economic strategy, often referred to as Bidenomics, are affecting communities. Bidenomics centers on growing the economy from the middle out and the bottom up, through investment in America, the creation of well-paying union jobs, and cost reductions for American families.
Key Outcomes in the First Year of the Inflation Reduction Act
In the twelve months since the Inflation Reduction Act became law:
- The private sector has announced more than 110 billion dollars in new clean energy manufacturing investments, including over 70 billion dollars in the electric vehicle (EV) supply chain and more than 10 billion dollars in solar manufacturing. Since President Biden took office, total announced private clean energy manufacturing investments are approximately 240 billion dollars.
- Clean energy and climate-related investments following enactment of the Inflation Reduction Act are estimated to have generated more than 170,000 jobs, with outside experts projecting an additional 1.5 million jobs over the next decade.
- Public and private investments linked to the Inflation Reduction Act and the Bipartisan Infrastructure Law are expected to reduce greenhouse gas emissions by roughly 1 billion metric tons in 2030.
- Federal agencies have awarded more than 1 billion dollars to help communities prepare for and withstand climate-related hazards such as drought, extreme heat, and severe weather events.
- New analysis from the Department of Energy (DOE) indicates that American households are on track to save an estimated 27 to 38 billion dollars on electricity bills between 2022 and 2030, relative to a scenario without the Inflation Reduction Act.
- Nearly 15 million people are saving an average of 800 dollars annually on health insurance premiums. The national uninsured rate has fallen to a historic low, and millions of seniors on Medicare now face lower out-of-pocket drug costs, including a 35 dollar monthly cap on insulin.
- The Internal Revenue Service (IRS) is enhancing enforcement initiatives directed at wealthy tax evaders and delinquent millionaires, while improving services for compliant taxpayers. Average phone wait times fell from 28 minutes during the last tax season to 3 minutes this year.
A Historic Climate Investment
The Inflation Reduction Act represents the most ambitious climate investment undertaken by any nation to date.
DOE has released an updated assessment that underscores how the Inflation Reduction Act, together with the Bipartisan Infrastructure Law, is reshaping the United States’ emissions trajectory. According to DOE, the combined effects of these two laws are projected to reduce U.S. greenhouse gas emissions by up to 41 percent below 2005 levels by 2030.
When added to federal, state, local, and private sector actions already underway, the country is now on a credible path toward President Biden’s target of reducing emissions by 50 to 52 percent below 2005 levels by 2030 and achieving net-zero emissions no later than 2050. External research organizations similarly project that existing laws will bring U.S. emissions down by approximately 43 to 48 percent below 2005 levels by 2035.
The Inflation Reduction Act is accelerating progress toward national climate goals, building a modern clean energy economy, and reinforcing energy security in several ways:
- DOE estimates that the Inflation Reduction Act and the Bipartisan Infrastructure Law will together drive emissions reductions of roughly 1 billion metric tons in 2030.
- DOE analysis shows that these laws are promoting rapid expansion of clean electricity generation capacity. The United States has the potential to reach approximately 80 percent clean electricity by 2030.
- U.S. electricity generation from wind is projected to triple by 2030, and solar power generation is expected to grow by a factor of seven to eight, relative to current levels. Over the next seven years, deployments of wind, solar, and battery storage are expected to be about twice as large as they would have been without the Inflation Reduction Act.
- Electric vehicle sales have already tripled since President Biden took office. Investments and tax incentives for clean energy manufacturing and consumer EV purchases under the Inflation Reduction Act are a key driver of this growth.
- Federal agencies are incorporating equity and environmental justice into grant programs so that low-income and disadvantaged communities share in the benefits. In alignment with the President’s Justice40 Initiative, the Environmental Protection Agency (EPA) has made 650 million dollars available for environmental justice grants to reduce pollution and support community-based organizations and local governments. Additionally, two-thirds of EPA’s 27 billion dollar Greenhouse Gas Reduction Fund will be directed to low-income and disadvantaged communities.
- Philanthropic and impact investment organizations have committed at least 1.6 billion dollars to support implementation of the law’s clean energy and climate provisions. These resources are helping underserved communities access technical assistance and fully utilize the opportunities created by the Inflation Reduction Act.
Beyond advancing clean energy deployment, the law is strengthening community resilience in the face of climate-related risks:
- The National Oceanic and Atmospheric Administration (NOAA) has awarded 562 million dollars, funded jointly by the Inflation Reduction Act and the Bipartisan Infrastructure Law, for nearly 150 projects in 30 coastal states and territories. These projects aim to make local economies and communities more resilient to sea level rise, storms, and other climate impacts.
- NOAA has also launched the 575 million dollar Climate Resilience Regional Challenge. This competitive program supports comprehensive, region-focused resilience initiatives in coastal and Great Lakes communities that face extreme weather and other climate-related threats.
- The Department of the Interior’s Bureau of Reclamation has announced more than 514 million dollars to respond to the historic drought conditions in the Colorado River Basin.
- The U.S. Forest Service has awarded 250 million dollars to states and territories to expand urban tree canopy coverage. This initiative helps shield vulnerable communities from extreme heat and provides additional ecological and public health benefits. The agency plans to award up to 1 billion dollars in grants to increase equitable access to trees and green spaces in urban and community forests, where more than 84 percent of Americans live and work.
- The Department of the Interior has released a Restoration and Resilience Framework to guide 2 billion dollars in Investing in America agenda funding for the restoration and protection of national lands and waters. Under this framework, the Bureau of Land Management has allocated an initial 161 million dollars from the Inflation Reduction Act to restore ecosystems and support local economies. The National Park Service has dedicated 44 million dollars from the law to projects at national parks in 39 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The U.S. Fish and Wildlife Service has awarded more than 120 million dollars to rehabilitate and strengthen the climate resilience of the National Wildlife Refuge System.
Investing in America and Creating High-Quality Jobs
The Inflation Reduction Act is designed to reinforce domestic manufacturing, expand good-paying union jobs, and build robust and reliable supply chains. Together with the Bipartisan Infrastructure Law and the CHIPS and Science Act, it has contributed to more than 500 billion dollars in announced private sector manufacturing investments since President Biden and Vice President Harris took office, including about 240 billion dollars in clean energy manufacturing.
The law uses targeted incentives and bonus tax credits to steer investment toward communities that have often been overlooked, such as traditional energy-producing regions and low-income areas. It also encourages the use of domestic content, payment of prevailing wages, and the hiring of registered apprentices to ensure that the clean energy transition supports high-road labor practices.
Within the first year alone:
- Companies have announced over 110 billion dollars in new clean energy manufacturing investments, including more than 70 billion dollars in the EV supply chain and more than 10 billion dollars in solar manufacturing.
- Outside estimates indicate that the Inflation Reduction Act’s clean energy and climate measures have already supported more than 170,000 clean energy jobs and could generate 1.5 million additional jobs over the next ten years.
- Project developers have proposed at least 122 billion dollars in investments across more than 800 clean energy generation projects. These projects span wind, solar, energy storage, nuclear, hydropower, biomass, and geothermal resources and represent more than 80 gigawatts of capacity. That amount of electricity could power approximately 13.7 million homes for a year, based on Energy Information Administration data.
- Real inflation-adjusted spending on private manufacturing and industrial construction in the United States is at its highest level since the Census began tracking these data in 1964 and stands about 27 percent above the previous peak in 1966.
- A new Department of the Treasury analysis shows that investments announced in clean energy, electric vehicles, and battery manufacturing are disproportionately located in communities with lower household incomes, lower college graduation rates, and lower employment levels. This pattern suggests that the law is directing economic opportunity toward relatively disadvantaged regions.
The Inflation Reduction Act also delivers the largest investment in rural electrification since the New Deal. Nearly 11 billion dollars is dedicated to rural electric cooperatives, enabling them to develop clean, affordable, and reliable power systems, which can reduce energy costs and create jobs. The law also provides forgivable loans for renewable energy projects that serve or are located in rural communities. In addition, the Department of Agriculture has made available more than 1.3 billion dollars from the Inflation Reduction Act to assist agricultural producers and small rural businesses in financing clean energy projects and energy efficiency improvements.
Reducing Energy Costs for Consumers
DOE projects that the combined effects of the Inflation Reduction Act and the Bipartisan Infrastructure Law will reduce electricity rates by up to 9 percent and lower gas prices by as much as 13 percent by 2030. These changes are expected to return tens of billions of dollars to American households.
Because the law is accelerating the transition to a cleaner and more efficient energy system, many consumers are already experiencing cost savings. Examples include:
- Florida Power & Light (FPL) plans to return approximately 400 million dollars in savings to its 5.8 million customers, primarily due to the Inflation Reduction Act’s Production Tax Credit for solar power. FPL continues to expand solar generation across the state, operating what is currently the nation’s largest solar build-out, with 50 solar sites in operation.
- Xcel Energy in Minnesota has estimated that the Inflation Reduction Act could produce about 1.4 billion dollars in consumer savings for its Minnesota customers through 2034.
- WEC Energy Group in Wisconsin has increased its five-year capital plan by 2.4 billion dollars, influenced in part by the Inflation Reduction Act. The company’s 2022–2026 plan originally called for 2,400 megawatts of new renewable capacity; the revised target is approximately 3,300 megawatts. WEC projects that these investments in renewable energy will yield around 2 billion dollars in long-term customer savings.
DOE has also established an Energy Savings Hub to help renters, homeowners, and other consumers identify ways to reduce their energy bills by using incentives available under the Inflation Reduction Act. For instance:
- Households that install an efficient electric heat pump for heating and cooling can receive a tax credit of up to 2,000 dollars and may save an average of more than 500 dollars annually on utility bills.
- Families that make energy efficiency upgrades can claim tax credits of up to 500 dollars for exterior doors, 600 dollars for windows, 150 dollars for a home energy audit, and up to 30 percent off the cost of added insulation, for a total of as much as 1,200 dollars in credits per year.
- Households that install rooftop solar panels or battery storage systems can receive a tax credit covering up to 30 percent of installation costs and may save close to 400 dollars per year on energy bills.
- Drivers who purchase qualifying clean vehicles can receive a tax credit of up to 7,500 dollars for a new vehicle and up to 4,000 dollars for a used one. Consumers can review eligible vehicles at fueleconomy.gov.
In parallel, the Administration is supporting state and local partners that help families cut energy costs through home upgrades. DOE has opened applications for states to implement 8.5 billion dollars in home energy rebate programs. These programs will provide low- and middle-income households with rebates for energy-efficient electric appliances and home efficiency improvements.
The Department of Housing and Urban Development (HUD) has also announced 837 million dollars in grants and subsidies and 4 billion dollars in loan commitment authority through the Green and Resilient Retrofit Program. This initiative improves energy and water efficiency and enhances climate resilience in HUD-assisted multifamily properties that serve low-income residents.
Lowering Health Care Costs
The Inflation Reduction Act advances the long-term commitment of President Biden, Vice President Harris, and Congressional Democrats to make health care more affordable for families and seniors. The law strengthens and extends improvements to the Affordable Care Act (ACA), which has helped drive the uninsured rate to a record low and enabled nearly 15 million people to save an average of 800 dollars annually on health insurance premiums.
Additional health care and prescription drug provisions include:
- For the first time, Medicare has authority to negotiate the prices of certain high-cost prescription drugs. Americans pay more for prescription medications than people in many other countries. By September 1 of this year, the Centers for Medicare & Medicaid Services will publish the initial list of ten drugs for which Medicare will negotiate prices with pharmaceutical manufacturers.
- Monthly insulin costs for people with Medicare are now capped at 35 dollars, offering predictable and often substantial savings to seniors who previously paid as much as 400 dollars per month. If the cap had existed in 2020, Medicare beneficiaries using insulin pumps would have saved an average of 866 dollars that year. Following the introduction of the cap, the three largest insulin manufacturers reduced list prices for many insulin products for all U.S. consumers, not only Medicare beneficiaries.
- As of January 1, 2023, Medicare beneficiaries and adults with Medicaid coverage can access all recommended vaccines without cost sharing, saving an average of 70 dollars per vaccine.
- Drug manufacturers that raise prices faster than the rate of inflation are now required to pay rebates to Medicare. This policy is already lowering out-of-pocket spending for some seniors, as Medicare reduces copays on drugs whose prices have increased excessively. In the most recent quarter, 43 drugs used by thousands of Medicare beneficiaries increased in price more rapidly than inflation. Because of the Inflation Reduction Act, some patients are saving up to 449 dollars per dose.
- Beginning in 2025, out-of-pocket prescription drug costs for people with Medicare will be capped at 2,000 dollars per year. Approximately one in three Medicare beneficiaries, or 18.7 million people, will save an average of 400 dollars annually. Among the 1.8 million beneficiaries with the highest drug expenses, including individuals receiving treatment for cancer and other serious conditions, average annual savings are projected to be about 2,500 dollars.
Ensuring That the Wealthy and Large Corporations Pay a Fair Share
The Inflation Reduction Act is expected to raise roughly 300 billion dollars over ten years by adjusting how large corporations and wealthy individuals are taxed. The law establishes a 15 percent minimum tax on the profits of large corporations and introduces a 1 percent excise tax on stock buybacks and redemptions. The Treasury Department and the IRS have already issued initial guidance on these provisions, which are taking effect this year.
The Act also includes a major investment in modernizing the IRS. New funding supports hiring additional personnel and upgrading outdated technology systems so the agency can provide better service to honest taxpayers and focus enforcement on those who have not paid what they owe. Early outcomes include:
- Enhanced assistance for compliant taxpayers. During the 2022 tax season, the IRS answered 3 million more phone calls than in the prior year, reduced average phone wait times from 28 minutes to 3 minutes, and provided in-person help to 140,000 more taxpayers.
- Significant progress in digitization and processing. The IRS digitized nearly 225 times more returns than in the previous year through new scanning technologies, eliminated the backlog of error-free individual tax returns for 2022, launched two new digital self-service tools, and added a direct-deposit refund option for taxpayers filing amended returns.
Over the next decade, these investments will help the IRS collect at least 150 billion dollars in unpaid taxes from high-income individuals and large corporations.
Looking ahead, the IRS plans further improvements to taxpayer services. These include a direct-file pilot for a free, voluntary, IRS-run electronic filing system beginning in 2024; expanded in-person support in rural and underserved communities; an initiative to speed up refund processing by several weeks; and new online account tools and mobile-friendly tax forms.
Through the Inflation Reduction Act, the United States is simultaneously advancing climate action, supporting high-quality employment, reducing household costs, and promoting a fairer tax system, while positioning the country for long-term economic and environmental resilience.