Impax Asset Management Scrutinizes US Inflation Reduction Act

Impax Asset Management, a leading green investment firm, has expressed concerns over hurdles arising from the United States’ Inflation Reduction Act (IRA). Initially lauded for its potential in climate change mitigation, the IRA is now under scrutiny due to the complications engendered by the clean-energy tax credits incorporated within the legislation.

Complications in Green Investment

The complexity of these tax credits, Impax argues, is causing inefficiency in the financial structuring of green projects. The credits, seemingly favoring financial intermediaries, are purportedly resulting in lesser funding reaching the intended environmentally beneficial projects.

Shadows on the Inflation Reduction Act

This critique uncovers concerns within the green investment community regarding the efficiency and direct investment in green initiatives. While the IRA’s intentions are lauded for their positive impact on climate action, doubts are cast on its execution.

The Role of BESS in Clean Energy

In the broader context, the article explores the challenges and opportunities in implementing battery energy storage systems (BESS) to support clean energy and climate goals. The focus is on the regulatory and siting aspects, emphasizing the need for swift and expansive enactment of infrastructure to transition energy supply to clean, renewable sources.

Policy and Implementation Challenges

The article addresses the need to update interconnection regulations, the influence of federal policies on incentivizing storage adoption, and the importance of identifying the right location for a BESS project. It discusses the expansion of siting potential for BESS projects under the federal investment tax credit, the hurdles of obtaining local permits, and the impacts of BESS projects on local communities.

The U.S. has recently added $1 billion in demand side initiatives to $7 billion of hydrogen supply subsidies and substantial tax credits to maximize economic success in clean hydrogen production. However, the U.S. is grappling with challenges in environmental, technical, and political aspects in the implementation of the hydrogen strategy. The administration is also addressing potential economic obstacles to the successful implementation of the H2Hubs program and acceptance of hydrogen as a commercially acceptable alternative.