Back to OurEnergyLibrary search

AEO2023 Issues in Focus: Inflation Reduction Act Cases in the AEO2023

AEO2023 Issues in Focus: Inflation Reduction Act Cases in the AEO2023

Full Title: AEO2023 Issues in Focus: Inflation Reduction Act Cases in the AEO2023
Author(s): U.S. Energy Information Administration
Publisher(s): U.S. Energy Information Administration
Publication Date: March 15, 2023
Full Text: Download Resource
Description (excerpt):

The Annual Energy Outlook 2023 (AEO2023) reflects, to the extent possible, laws and regulations adopted through mid-November 2022, including the Inflation Reduction Act (IRA). This report assesses changes to the energy system and U.S. energy related carbon dioxide (CO2) emissions due to IRA implementation, holding other assumptions constant. To meet this objective, we assess the effects of the IRA by comparing the Reference case, which includes IRA provisions, against a case that excludes all IRA provisions.

To address some of the uncertainty around IRA provisions, we present two additional cases with variations of certain tax credits and incentives applied to eligible technologies that explore the IRA’s range of impacts. In the Low Uptake case, we assume most qualified technologies receive the same or fewer credits than in the Reference case, and, in the High Uptake case, they receive the same or more credits. The Low Uptake and High Uptake cases form the lower and upper bounds of the IRA provisions’ impact.In this analysis, we found that assumptions around the bonus credits have a substantial impact on the results. In particular, the Low Uptake case produces results that are similar to the No IRA case, indicating that the IRA base credits alone are unlikely to have an appreciable impact on the U.S. energy system. By contrast, as highlighted in the results presented in this report, the Reference and High Uptake cases often produce significant differences compared with the No IRA case.

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

Sign up for our Press Release Distribution List

    Your Name (required)

    Your Email (required)

    Please sign me up to receive press releases from