What is the Inflation Reduction Act?
The Inflation Reduction Act (IRA) was signed into law last August, marking the most significant action Congress has taken on clean energy and climate change in the nation’s history. The intent of the transformative law is to help the United States meet its climate goals and strengthen energy security, invest in America to create good-paying jobs, reduce energy and health care costs for families, and make the tax code fairer. One year later, the Biden Administration reports creating 170,000 clean energy jobs, over $110 billion in clean energy manufacturing investments, billions of dollars allocated to protect communities from climate change impacts, and millions of seniors benefiting from capped insulin costs at $35 per month.
Despite these positive gains, a flurry of regulatory measures causing confusion and project approval delays has hampered public construction activity, as noted in an August report by the Associated General Contractors of America officials. (Source: DesignandBuildwithMetal)
Steel Making Industry Well-Equipped
“The steel industry is well-equipped to meet the demand generated by the Inflation Reduction Act (IRA) and the CHIPS and Science Act (CHIPS Act), experts told FastMarkets on the one-year anniversary of the legislation.” The IRA establishes “Make it in America” provisions for using American-made equipment for clean energy production. The law provides expanded clean energy tax credits in the areas of wind, solar, nuclear, clean hydrogen, clean fuels, and carbon capture.
Phil Bell, president of the Steel Manufacturers Association, told Fastmarkets, “You have two pieces of legislation that are not only going to make our environment better but are also going to increase the demand for steel. All of those solutions for decarbonization and having a greener environment, steel is the solution for the solution providers because steel will go into wind, solar, electric vehicles, renewable energy projects, hydrogen hubs, pipelines.”
“There’s about $18 billion of investment that is taking place between 2022 and 2025 to modernize, decarbonize, and electrify the American steel industry, and it ranges in product categories from sheet to slab to plate to rail, to even electrical steel, which will be very important in the development of electric vehicles and also our power grid. The recent investment announcements and all of these projects are full steam ahead. There’s going to be plenty of capacity to meet that demand,” Bell said.
Solar Poised to Lead the Way
The U.S. solar market is set to reach 30% of U.S. electricity generation by 2030. The new IRA legislation includes a 10-year extension of the Solar Investment Tax Credits (ITC), significant incentives to boost domestic manufacturing throughout the solar production supply chain, tax credits for energy storage, a 30% tax credit for the installation of photovoltaic systems, workforce development provisions, and additional policies that promote a clean energy economy.
According to Solar Builder, the U.S. solar industry anticipates adding a record 32 gigawatts (GW) of new capacity in 2023, a 52% increase from 2022, as per the U.S. Solar Market Insight Q3 2023 report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie.
Impact on Metal Roofing
Rob Haddock, CEO and Founder, S-5! says the metal roofing industry is poised to capitalize on this growth. He asserts, “Metal roofing provides an ideal platform for mounting rooftop solar as it is the only roof type with a service life (in the range of 50-70 years) that actually exceeds the service life of a solar PV system (an average of 32.5 years and growing year-over-year). It is also the most sustainable roofing type and is conducive to lower solar installation costs. Most alternative roofing types will expire long before the life of the PV system, leading to costly disassembly of the PV array, re-roofing, and re-assembly.”
He says, “Often when the decision is made to install solar, a new roof is required. Metal roofing has become a driver for roof type selection in these cases because not only can a metal/solar roof system have a lower initial cost than other roof system combinations, but it also leads to improvements in the system’s lifetime return on investment (ROI). Therefore, the PV array and the roof should be regarded as a single asset.”
John Rob at METALCON as he lends his expertise by leading the immersive workshop, “Metal Roofing from A (Aluminum) to Z (Zinc),” and participating in a panel on “Why Design and Build with Metal – The Most Sustainable Construction Material Available.” Click here for more details on both of these sessions and to register.
Metal Construction Industry Gather at METALCON
As thought leaders in the metal construction industry gather at METALCON in two weeks, the conversations surrounding this “tale of optimism and skepticism” over the impact of the Inflation Reduction Act will provide answers to some of your burning questions. Construction is in transition. A slowing economy and rising interest rates are threatening private investment. But growth in manufacturing, power, and infrastructure investment may outweigh any decline in income-producing properties.
To gain insight into the overall outlook and the IRA’s impact, join Ken Simonson, chief economist for AGC of America, at METALCON for his Keynote Address, Construction Outlook for ’24: Forbidding or Reason to Cheer?, in two weeks on Thursday morning, October 19 at 10:00 AM. This Keynote, brought to you by Flack Global Metals, is included with your Total Experience registration and will earn you 1 AIA continuing education credit.
In addition to Ken’s Keynote Address, more information will be shared at the session, “State of the Industry – Presented by the Metal Construction Association,” scheduled for Wednesday afternoon, Oct. 18, from 3:45 pm – 4:45 pm. Moderated by Jeff Henry, Executive Director of the Metal Construction Association, a formidable panel of industry leaders will discuss current and future opportunities and challenges facing metal construction.