Green Subsidies Fail to Spur Clean Energy Adoption
- 75 percent of IRA subsidies, like its $7,500 electric vehicle (EV) credit for new or used vehicles purchased after 2023 through the Clean Vehicle Tax Credit (30D), go to consumers who have already purchased an EV.
- In spite of the IRA’s Clean Electricity Investment Tax Credit (48E) for new solar projects, U.S. investment in solar dropped by 12% in the first half of 2024.
- While the Biden-Harris administration prioritized IRA subsidies for offshore wind projects, the levelized cost (LCOE) of offshore wind is expected to become one of the most expensive sources of electricity in 2025.
IRA Subsidies Hardly Reduce Emissions
- Without the IRA subsidies, the U.S. would likely have reduced emissions by between 24% and 35% by 2030 compared to 2005, and with IRA subsidies, the U.S. will likely reduce emissions by around 30% to 43% by 2030.
- EV brakes and tires release approximately 1,850 times more pollution than gas-powered cars, which demonstrates that IRA subsidies might create more pollution.
Congress Needs to Cut IRA Green Subsidies
- Mostly creating temporary construction positions, the IRA’s 22 green tax credits did not produce the trillions in clean energy investments and millions of new climate-friendly jobs promised by proponents.
- Though the Congressional Budget Office and Joint Committee on Taxation (JCT) projected green subsidies would cost approximately $370 billion between 2023 and 2032, the cost of the IRA’s green provisions could balloon to between $2.04 trillion and $4.67 trillion by 2050.
- American citizens should recognize that they would benefit from a truly competitive energy market that encourages providers to compete to offer reliable energy at the lowest cost, instead of relying on green subsidies, which will saddle taxpayers with trillions more in debt.
Click HERE to read the policy focus and learn more about IRA Green Subsidies.