SACE Anticipates ‘Inflation Reduction Act’ Will Improve Lives and Reduce Harmful Climate Impacts in the Southeast

The historic bill now moves to the House, which is expected to vote on August 12

August 8, 2022
Contact: Amy Rawe, 865-235-1448, [email protected]

Knoxville, TN — On August 7, 2022, the U.S. Senate passed the Inflation Reduction Act (IRA), an estimated $430 billion bill, of which approximately $370 billion will be allocated to investments in clean energy and to address climate change. It’s the single largest climate investment in U.S. history, and if it passes the House, will put the country on a path to be able to achieve roughly 40% emissions reduction from 2005 levels by 2030, reestablishing our influence in meeting the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius.

If passed, the Inflation Reduction Act will:

  • Give opportunities to hundreds of thousands of Americans to work in well-paying jobs manufacturing, installing, and maintaining clean energy, energy efficiency, and clean transportation
  • Lower Americans’ cost of electricity by spurring the development of hundreds of gigawatts of low-cost clean energy, including wind, solar, and battery energy storage
  • Protect drivers from expensive and volatile fuel costs through financial incentives to switch to electric vehicles
  • Reduce households’ bills through historic investments in rebates and tax credits for home energy efficiency and efficient electric appliances
  • Promote environmental justice and direct resources and benefits to disadvantaged communities, which are often overlooked for investment and bear heavy costs of fossil fuel and pollution

Overwhelmingly, the Inflation Reduction Act will strengthen the U.S. economy, increase our resiliency, and greatly improve the health of communities affected first and worst by fossil fuel pollution.

The bill’s passage on a 50-50 vote, with the tie-breaking vote cast by Vice President, Kamala Harris, underscores the importance of ensuring clean energy and climate focused-leaders are elected at all levels of government.

Dr. Stephen A. Smith, Executive Director of the Southern Alliance for Clean Energy, said, “Change is coming. This bill is a historic commitment by the United States to regain a leadership position not only in addressing climate disruption but also in leading the clean energy technology revolution that is being unleashed. While no single entity can take credit for the rollercoaster ride that led to the Senate passing this significant legislation, much credit must be given to the voters in Georgia. By electing not one, but two climate-focused Senate leaders in a run-off election in early 2021, these two Southern Senators were absolutely necessary for creating this moment in history and shepherding the bill through the political tightrope in the Senate. We look forward to swift passage by the House of Representatives and the President’s signature.” 

Forty-one percent of recent high inflation is directly attributed to fossil fuel dependence and volatile prices, thus investments in electrification and clean energy to help wean us off of volatile fossil fuels can help lower costs. The IRA bill will enable households and businesses to receive rebates, tax credits, loans, and other financial incentives for energy efficiency improvements, installing solar or batteries, switching to electric vehicles, and electric appliances. A study by the Rhodium Group estimates that the bill’s provisions and other factors will save households an average of $1,025 per year by 2030.

Specifically, energy efficient technology like heat pumps will cost less to consumers, which will help reduce energy consumption in Southeastern states that have a high heating and air conditioning load in the summer and winter.

The bill includes targeted investments for low-income communities, rural areas, and disadvantaged communities. For example, the legislation sets out $1 billion in grants to improve energy efficiency in affordable housing, $3 billion for reducing pollution at ports, $3 billion in environmental and climate justice block grants, more than $1 billion in grants for farmers and rural small businesses to invest in clean energy and energy efficiency, $9.7 billion in financial incentives for rural electric cooperatives to invest in clean energy and energy efficiency, and billions of dollars of seed money to leverage private capital to invest in low-income and disadvantaged communities. The bill’s tax credit provisions will increase workers’ pay and additionally provide bonus tax credits to solar and wind companies that invest in low-income communities.

The bill also expands access to clean energy incentives to non-tax entities such as nonprofit organizations, tribal communities, and local and state governments, which will lower the cost of renewable energy for cooperatives, municipal utilities, and the federally-owned Tennessee Valley Authority.

Many of the climate-specific provisions in the IRA will super-charge clean energy and clean transportation manufacturing, which could have a major impact in the Southeast which is already on a fast track to becoming a hub for electric vehicle manufacturing.

The bill is, of course, not perfect. It doesn’t go as far as a federal clean energy policy should to eliminate carbon emissions at the speed scientists say is necessary to avoid the worst impacts of climate change. In fact, it includes concerning concessions to the fossil fuel industry that perpetuate extraction, ecosystem destruction, and toxic pollution by supporting our costly and risky dependency on oil, gas, and nuclear energy that could manifest into money pits at the expense of other climate solutions. But the climate pollution reductions from investments in clean energy are estimated to outweigh the emissions from oil and gas provisions 24-to-1.

Addressing the magnitude of the bill, Maggie Shober, Research Director at the Southern Alliance for Clean Energy, emphasized, “The Inflation Reduction Act is by far the most consequential legislation for climate action that has ever passed. I think it will take some time to be able to process the scale and positive effects this will have on our collective future. But the fight is not over, we’ll need to keep up momentum across the country and here in the Southeast. Paired with more federal, state, and local actions, we will be more equipped to face the most existential threat of our time: climate change.” 

The House is currently in recess, but a vote is likely to take place on August 12, and the Inflation Reduction Act is expected to pass. Barring amendments, if it is passed, the bill will then head to President Biden’s desk to be signed into law.

About the Southern Alliance for Clean Energy
Since 1985, the Southern Alliance for Clean Energy has worked to promote responsible and equitable energy choices to ensure clean, safe, and healthy communities throughout the Southeast. Learn more at