The US Experiences a Boom in Green Technologies

In 2023, the United States saw a significant increase in investments in green technologies such as renewable energy, electric vehicles, and hydrogen. A key driver of this surge is President Biden’s Inflation Reduction Act.

The Inflation Reduction Act (IRA) has led to a substantial rise in investments in green technologies in the United States. In 2023, these investments surged by nearly 40 percent, reaching $239 billion. This data comes from the Clean Investment Monitor, a research project by the Rhodium Group and MIT that meticulously documents investments in renewable energy and green technologies in the US. The story was first reported by “Tagesspiegel.”

Passed in August 2022 under President Joe Biden, the IRA aims to position the United States as a leading producer of climate-friendly technologies. Billions of dollars in subsidies are being directed to companies producing battery storage, solar panels, and sustainable fuels, as well as to individuals purchasing electric vehicles and installing heat pumps.

The analysis from the Clean Investment Monitor highlights the crucial role of private investments in transforming the US economy. Notably, the purchase of electric vehicles accounted for $77 billion, which is one-third of the total investment.

An additional $53 billion was invested in constructing battery storage systems to stabilize the power grid. The expansion of solar power is also progressing, even in states that have previously invested less in renewable energy.

Investments in new, yet-to-be-commercialized climate technologies have increased tenfold, totaling $9.1 billion. These include projects focused on developing sustainable aviation fuels and hydrogen technology.

Beyond reducing greenhouse gas emissions, the IRA aims to boost domestic production and create new jobs and revenue streams in the green technology sector. The Clean Investment Monitor reports significant progress in these areas as well.

Despite these successes, the US still has a long way to go towards a low-carbon economy. Electric vehicles, despite the boom, only accounted for ten percent of newly registered cars, compared to a global average of around 25 percent. By the end of 2023, only about one-fifth of US electricity came from renewable sources, whereas in Germany, it was 56 percent. Additionally, the sale of heat pumps remains sluggish, despite state incentives of up to $2,000 per purchase.

The United States is on a promising path toward a greener future, but considerable challenges remain in achieving a fully sustainable economy.