Markets Wired

As Prepared for Delivery

Good morning and thanks for having me. As you all know, the Inflation Reduction Act marks a generational investment in clean energy and our economy. It opens the door to a historic opportunity, but we know we can only take advantage of this opportunity if we implement the law effectively and quickly. Your engagement, support, and leadership over the past two years is helping us do so. 

Already, the IRA tax incentives are leading to unprecedented levels of private sector investment in clean energy and clean energy manufacturing. Over the past two years, companies have announced more than 1,600 clean energy projects representing over $336 billion in investment. 

These investments and the jobs they are creating are going to communities that are too often left out and left behind. Seventy percent have gone to areas where a smaller share of the population is employed. Eighty percent have gone to areas with below-average wages. Eighty six percent have gone to areas with below-average college graduation rates.

Our clean energy economy is also helping drive down costs for American families. Last year, 3.4 million American households and consumers used tax credits to lower their energy bills and save $8.4 billion by taking advantage of heat pumps, rooftop solar, or electric vehicles, and more.

While we are proud of the progress we’ve seen over the past two years, we know we have more to do to unlock the full potential of the IRA. One of the places where this is clearest is with direct pay. 

Direct pay was one of the most complex provisions of the IRA to implement because it deals with many organizations and entities that have never filed a tax return. Thanks to the work of many of you in this room, more than 1,200 organizations have submitted projects or facilities pursuing elective pay, including submissions from more than 500 state and local governments. 

This is a tremendous milestone because these numbers represent hundreds of projects in our communities that will make a difference—from electric vehicle purchases to charging equipment to community solar projects. But we know we can do more, especially with state and local governments. 

Direct pay can help state and local governments get access to funding to launch new projects like solar installations for town halls, charging stations for local government fleets of EVs, and electric school buses. These projects, like the ones we’ve already seen, will save these governments money and will help our transition to a clean energy economy.

To increase state and local government uptake of direct pay, we know they are going to need technical assistance and additional capacity for everything from developing plans to the actual process of filing tax returns. This is especially true for smaller and more economically challenged local governments. 

At Treasury, we are focusing our outreach on 150 of the most economically challenged cities, and we need your help to do more. If we just leave this to local governments across the country to figure out on their own, many will succeed, but some may not. That’s why we’ve asked you all to join us here today to help us figure out what resources these governments need and how we together can provide it. 

Many of your organizations know direct pay inside and out and have been devoted to working with local governments on taking advantage of new opportunities under the IRA. We’re grateful for all you have done so far and for helping us continue to build on the momentum of the past two years. I’m looking forward to seeing what this group comes up with during today’s meeting to help drive forward the uptake of direct pay over the next year and continue to drive the clean energy economy across the country. Thanks again for having me and for being partners in this work.

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