Inflation Reduction Act’s Booming Success Is at Risk in the Presidential ElectionInflation Reduction Act’s Booming Success Is at Risk in the Presidential Election

Since its passage two years ago, the Inflation Reduction Act (IRA) has catalyzed growth in clean-energy manufacturing across the US, funneling hundreds of billions of dollars into battery and electric vehicle (EV) production, solar power, and other renewable technologies. (We've tracked its progress along the way in multiple articles on EV and battery investments, in particular.) Initially estimated at $369 billion, clean-energy investments under the IRA could surpass $1 trillion, with nearly $238 billion in clean-energy projects already underway, according to data from the Environmental Entrepreneurs (E2) and BW Research Partnership. E2 reports these projects could generate over 600,000 jobs, $50 billion in tax revenues, and tens of billions in annual GDP gains as new manufacturing sites ramp up across states, especially in rural areas.

This economic lift reaches across political lines, with red districts leading investment growth. According to a Washington Post analysis, areas favoring former President Donald Trump in the 2020 election have captured approximately $165 billion in new clean energy investments, compared with $54 billion in areas that leaned Democratic. "The clean-energy investments are not ‘Trump-proof,’” Joanna Slaney of the Environmental Defense Fund told the Post. “But it is an indication of how well it is working that we are seeing people step forward and say, ‘These are the benefits in my community.’”

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Clean-energy companies report high stakes if IRA is repealed

While clean-energy momentum grows, industry stakeholders warn of significant repercussions if the IRA is repealed or rolled back. In a survey conducted by BW Research Partnership, more than 85% of clean-energy business owners said the IRA is essential for their growth. About 53% predicted business losses if the act were repealed, while others anticipated layoffs, wage freezes, or even closures, particularly among rural-based firms that have benefitted most from IRA-driven projects.

President Joe Biden signs HR 5376, the “Inflation Reduction Act of 2022,” on August 16, 2022. Official White House Photo by Cameron Smith

Further, E2 estimates that repealing the IRA would remove $238 billion in new wages and tax revenue created during project construction phases, alongside roughly $20 billion annually in economic benefits. "The majority of respondents... said they would lose business or revenue as a direct result of an IRA repeal," E2 noted in its report. For many firms, the economic stakes extend to layoffs, relocation abroad, or wage cuts, underscoring the high dependence on IRA incentives within the clean-energy sector.

Potential impact of a Trump administration on the IRA

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The 2024 election has added uncertainty to the IRA's trajectory. GOP nominee Donald Trump has pledged to rescind unspent IRA funds, which analysts say could stymie ongoing and planned projects if companies hesitate to move forward. "We will rescind all unspent funds under the misnamed Inflation Reduction Act,” Trump stated in September. Should he win, his administration might not dismantle the law completely; however, portions related to EV and charging station tax credits could face cuts.

While a complete repeal may be challenging due to the IRA’s widespread impact, conservative groups suggest Trump could target specific programs, including the Energy Department’s Loan Programs Office, which holds $210 billion in loan authority for clean-energy technologies. This prospect raises concerns among industry leaders who fear curtailed support for cutting-edge technology deployment. As Andrew Reagan of Clean Energy for America told the New York Times, “A big question for this election is whether we’ll continue to see a rapid acceleration of clean energy that helps us meet our climate targets.”

What’s next for the IRA?

Whether the IRA's provisions survive a potential GOP-led rollback remains an open question. Despite Republican-led calls for repeal, bipartisan interest in its economic benefits has surfaced, with 18 House Republicans urging Speaker Mike Johnson to preserve key tax credits amid economic gains in their own districts. In the meantime, the IRA continues to support what the New York Times reports as “the highest level [of U.S.] factory construction in half a century,” with some states now adopting climate plans to secure federal funding.

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In the immediate term, experts caution that permitting and grid challenges are also slowing clean-energy growth, obstacles both parties hope to resolve. The clean-energy industry, meanwhile, closely watches the election’s outcome as it charts its next steps in an uncertain regulatory environment.