Last summer, the Biden administration signed the Inflation Reduction Act (IRA) into law, designating $369 billion to climate and energy spending over the next decade. In addition to offering direct consumer tax credits, the bill set forth significant incentives for companies and states to invest in renewable energy projects. A little over eight months later, significant progress has already been made.
So far, one study estimates that $90 billion have been invested in 94 new clean energy projects, creating roughly 100,000 new jobs nationwide. Wind, solar, and EVs are making up a majority of the growth in green jobs and projects since the IRA passed. Goldman Sachs predicts 18% compound growth in solar installation through 2026 as a result of the bill.
Congruent and complementary policies at home and abroad are also having compounding effects on the clean energy market. Around the same time that the IRA was signed into law, California announced a ban on the sale of new gas-powered cars as of 2035. But the pursuit of clean energy is not limited to blue states.
While the IRA was pushed through by a democratic administration, it is proving beneficial in blue and red states alike. In fact, more projects and jobs have been created in republican-leaning states since last summer. For example, Michigan has invested over $7 billion in clean energy, including a new Ford EV battery manufacturing plant receiving $246 million in state incentives.
Meanwhile, Tennessee has invested roughly $11 billion and Georgia has invested $15 billion. The party-agnostic nature of these benefits indicates that the bill is likely to produce long-term growth and staying power regardless of future election results. This may also be true for future economic turbulence as the latter half of 2022 saw near-bearish conditions, yet growth of clean energy continued.
Nationally, since the IRA was signed into law, the Department of Energy (DOE) has announced three more Energy Earthshot Initiatives intended to lower the cost and barriers of geothermal energy, offshore wind, and industrial energy efficiency. And most recently, the Environmental Protection Agency (EPA) announced new, stricter regulations on auto pollution limits that would accelerate the proliferation of electric vehicles in the US, estimating that EVs will represent 50-64% of new car sales by 2030.
Globally, many other countries and regions are pursuing their own landmark legislations to tackle climate change that will be sure to impact the clean energy industry even further. The European Union is currently working toward becoming the first carbon-neutral continent by 2050 with its proposed European Green Deal. The impacts of these policies are already playing out. Global investment in clean energy matched investment in fossil fuels for the first time in history in 2022. This marks a 31% jump in clean energy investment over 2021 and the first time clean energy investment has topped $1 trillion.
As far as green investing is concerned, 2022 saw climate-related equity investment increase more than 6% despite overall private-equity investments declining more than 24%. By the end of 2022, total global assets under management in sustainable, impact, and ESG funds had tripled from 2015. TrueShares Eagle Global Renewable Energy Income ETF (RNWZ) offers investors the opportunity to partake in the potential rapid growth of clean energy both domestically and internationally. RNWZ is an actively-managed ETF that seeks long-term growth of capital by investing in renewables infrastructure companies. These companies are providing value through accelerating the global transition to clean energy that the IRA has already helped advance just eight months into at least a decade of investments.