The Inflation Reduction Act supports unprecedented investment in clean energy. According to a new report from Guidehouse Insights, energy services markets, specifically energy service companies and energy as a service providers, are expected to benefit significantly from the new regulation, leading to higher than anticipated revenues in the coming decade.
“The IRA provides a variety of incentives for energy efficiency, onsite renewable generation, and energy flexibility technologies in public and commercial buildings, including hard-to-decarbonise industries” said Krystal Maxwell, research director with Guidehouse Insights. “The act supports decarbonisation markets through direct funding; tax credits, such as the Investment Tax Credit (ITC), Production Tax Credit (PTC), and the 179D tax deduction; and funding for broader market initiatives, such as development of emerging technologies and stretch codes.”
Guidehouse Insights recommends educating customers about the impact of incentives on project economics; reinforcing the value of energy services contracts; bundling onsite renewables with energy efficiency measures; and considering expansion in other vertical markets, such as manufacturing and small and medium businesses, according to the report.
The report, The Inflation Reduction Act Supports ESPC and EaaS Markets, discusses aspects of the IRA relevant to ESPC and EaaS projects and considers implications for market growth over the next decade. It reviews critical questions that will impact market growth trajectory, such as the impact on customer sentiment, and new prevailing wage and apprenticeship requirements. Based on this analysis, the report presents two potential market outlook scenarios that stakeholders might see play out because of the IRA. An executive summary of the report is available for free download on the Guidehouse Insights website.
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