General Electric could be a big beneficiary of the Inflation Reduction Act, which is a federal expenditure on clean-energy infrastructure projects.
- General Electric has shifted its focus to clean energy—devoting millions to wind, hydro, solar, and hybrid power.
- The Inflation Reduction Act is investing billions into clean energy, and considering GE’s big switch to renewables, the company will benefit big from the law.
- GE’s goal is to be carbon neutral by 2030 and already has 400 GWrenewable energy installed worldwide, 49,000 wind turbines, 25% of global hydropower installations, and 90% of utilities equipped with its grid.
- Considering the mass amount of clean energy GE produces, the company will be a major receiver of the climate bill.
Why it’s essential
The Inflation Reduction Act, enacted earlier this year, gives billions in climate and energy investments that will boost renewable energy infrastructure in manufacturing, like solar panels and wind turbines, and include tax credits for electric vehicles and measures to make homes more energy efficient, which is positive for investors.
The law will provide a production tax credit, or PTC, for wind power generation, among other clean initiatives. It offers significant manufacturing credits for wind turbines up to $100 million per gigawatt of turbine capacity.
GE is one of the U.S.’s largest suppliers of wind turbines, so the new law would boost the company with credits.
Backing up a Bit
In August, President Joe Biden signed a climate and healthcare law called the Inflation Reduction Act.
The law’s primary goal is to restrain inflation by reducing the deficit, lowering prescription drug prices, and investing in clean energy.
The bill invests $369 billion in climate change investments, $64 billion in extending the Affordable Care Act, institutes a 15% corporate minimum tax, and expands IRS tax enforcement.Although reducing inflation is one of the act’s main goals, some say it will not reduce it.
GE is now a smaller version of what it was two decades ago when it was one of the most successful and admired companies in the world. It has since separated into three separate companies—one focusing on aerospace, one on health care, and one on renewable energy.