US businesses have been rushing to take advantage of federal tax credits and incentives, most notably the Inflation Reduction Act (IRA). This has led to soaring demand for US tax credit specialists with experience specifically in the clean energy sector.
What is the Inflation Reduction Act?
The IRA was introduced by President Biden in August 2022. It aims to stimulate investment in green technology in the United States, with billions in subsidies available to both public and private entities, through grants, loans and tax credits. The ultimate goal is to reduce US net greenhouse gas emissions down to 40% below 2005 levels.
What’s the catch?
There is one condition to the funding, which is that the recipient’s business must operate within the US only. As a result, the increase in battery, solar panel and wind turbine production in America has led to the creation of new production plants and millions of new ‘green’ jobs in the country.
Furthermore, it has enabled the US to reduce its dependency on China, which is the leading producer of raw materials required for new, green technology.
A game-changer
The IRA has been a major factor for policymakers and business leaders in shaping their strategies, with many hailing it as the most important climate action since the 2015 Paris Agreement.
The Act will not only determine whether the U.S. meets its emissions reduction goals, but will likely influence the global economy for years to come.
Since the IRA’s introduction, companies have invested more than $270 billion in U.S.-based clean energy projects. Electric vehicle technology investment has totalled more than $130 billion, according to government data. And the private sector is expected to spend trillions more to take advantage of the incentives in the law over the next decade.
The IRA has also transformed the opinions of some die-hard sceptics of the clean energy movement who have witnessed the opportunity to make money with lower-carbon solutions.
Whilst major manufacturing and power projects are at the forefront of this revolution, there are other pockets of industry that are taking advantage of the incentive, ranging from tax deductions for energy efficiency in retail to solar heat pumps and tax credits for electric fleet vehicles.
Clean energy incentives have been embraced to such a degree that it may all end up costing federal government a lot more than the $400 billion it originally anticipated. A 2023 report commissioned by the Brookings Institution estimated that it could top $1 trillion, as companies and consumers take advantage of the law’s uncapped tax incentives.
However, this is of course good news for the tax credits & incentives job market. With uptake of the IRA predicted to increase steadily over the coming years, so too will the job opportunities for qualified tax credit consultants – especially those with experience in the energy sector.
The impending U.S. election – could this change things?
A future Republican president could well make some adjustments to the scheme, but early indicators suggest that the law is here to stay. Plants have been built and jobs have been created. It would be a hugely unpopular move to attempt to reverse that. As such, we expect the energy incentives market to remain buoyant for the foreseeable future.
How Leonid Group can help
Leonid is the leading specialist recruiter in global innovation incentives. We know that competition is high right now for US tax credits & incentives consultants with experience in handling Inflation Reduction Act claims and/or a strong technical background. However, we can help by uncovering hidden talent, using our ‘Magic Month Methodology’ and proactive approach to talent acquisition.
If you are looking for your next hire, we can tap into our extensive candidate network and have your new team member ready to start within 30 days of instruction.
To find out more, please contact Emily Anderson for an informal discussion.