This is where Biden's climate law works, and falls short

A year and a half after President Biden signed a sweeping bill to tackle climate change, electric vehicle sales have risen largely in line with expectations, according to a new analysis by three groups monitoring the impact of the law.

But problems with supply chains, obtaining permits and overcoming local opposition have bogged down one of the climate law's other big goals: generating much more electricity from wind, solar and other non-polluting sources. Although the United States added record amounts of renewable energy and batteries last year, that rapid growth fell short of the level needed to meet the country's goals of cutting emissions that are rapidly warming the planet, the analysis said.

When the law, known as the Inflation Reduction Act, was passed in 2022, analysts predicted it would help cut U.S. greenhouse gas emissions to about 40 percent below 2005 levels by 2030. The measure includes hundreds of billions of dollars in tax credits and spending on clean energy technologies such as wind turbines, solar panels, batteries, electric vehicles and hydrogen fuels.

The law meets expectations in some areas and falls short in others, according to the new assessment from researchers at the Princeton-led REPEAT Project, the research firm Rhodium Group and Energy Innovation, a nonprofit organization.

Electric vehicle sales are largely on track to help meet the law's expected emissions reductions, after rising more than 50 percent in the past year. A record 9.2 percent of all new cars sold in the United States in 2023 were all-electric or plug-in hybrid models, which was at the high end of what analysts had predicted would happen after the law passed .

It is less certain that automakers will repeat this scorching sales growth this year. Many of the most enthusiastic early adopters have already purchased plug-in vehicles, while potential buyers are deterred by high sticker prices and the relative scarcity of charging stations. Companies like Tesla warn already that sales growth is likely to slow in the short term.

But if electric vehicle sales only increase between 30 and 40 percent in 2024, a noticeable slowdown from last year, that would be in line with the law's emissions targets, the analysis found.

However, the picture for renewable energy is mixed. Last year, the United States added a record 32.3 gigawatts of electrical capacity to the grid from solar panels, wind turbines and batteries. In many parts of the country, the tax breaks provided by the law make renewable sources of electricity cheaper to build than more polluting sources such as coal or natural gas.

But when the Inflation Reduction Act was passed, analysts had predicted that the United States would add an average of 46 to 79 gigawatts of carbon-free electricity to the grid annually by 2023 and 2024. There are ongoing projects this year that would generate approximately 60 gigawatts. but not all are expected to be completed on time, the analysis said. This means that the country is behind schedule in deploying new clean electricity sources.

The biggest obstacles facing renewable electricity are logistics, the report said. Wind and solar projects face long wait times to connect to the country's congested power grids, and permits for new high-voltage transmission lines can take a decade or more to obtain and build. In many parts of the country, new wind or solar farms are met with opposition from local residents. Plans for offshore wind farms have been stalled by gridlocked supply chains and shipping restrictions.

These obstacles can become even more challenging over time. To meet the law's projected emissions reductions, the country would need to add roughly 70 to 126 gigawatts of renewable electricity capacity each year between 2025 and 2030 — a staggering increase from current levels, the analysis found. Without major changes in permitting and transmission, neither of which are addressed by the Inflation Reduction Act, these numbers could prove unattainable.

“Addressing these non-cost barriers will be critical,” the analysis says, for the law “to realize its full potential for clean energy and emissions reduction.”

In addition, the Inflation Reduction Act also provided significant tax breaks for companies that produce batteries, solar panels, wind turbines and other technologies in the United States rather than abroad. That provision has proven popular: Companies invested $44 billion last year in domestic clean energy production, with more planned in the coming years.

It will take longer for other aspects of the law to take effect. There are tax breaks for companies that build advanced nuclear reactors or make hydrogen fuels using renewable electricity, or add devices to factories that capture CO2 emissions and bury them underground. Although several companies are developing such projects in the United States, none have been built yet.