Bistline, J.E.T, Brown, M., Cui, R., Fawcett, A., Hess, H., Iyer, G., Kolus, H., Mahajan, M., O'Brien, D.J., Orvis, R., Pitman, K., Swanson, S., Venkatesh, A., Zhao, A. (2026). Impacts of the Inflation Reduction Act and One Big Beautiful Bill Act on the US energy system. Nature Reviews Clean Technology.
Abstract: The US Inflation Reduction Act (IRA) was described as the largest federal climate legislation in the USA to date. This Review describes impacts of IRA on clean energy deployment through mid-2025 and summarizes projections for emissions and clean energy under IRA and the 2025 budget law, the One Big Beautiful Bill Act (OBBBA), which modifies eligibility and timelines for many IRA tax credits. Across studies, IRA was expected to amplify pre-existing decarbonization trends, roughly doubling emissions reductions by 2035 relative to a no-IRA baseline, with associated near-term co-benefits for air quality and health. IRA had been expected to approximately double clean electricity investment — including renewables, energy storage, nuclear and carbon-capture-equipped capacity — over the next decade. It was also expected to lower energy expenditures for households and businesses, on the order of $68 to $430 per household per year by 2035 relative to a case without IRA. Under OBBBA, modelled outcomes for emissions and electric-sector investments shift towards the counterfactual without IRA and away from the pre-OBBBA IRA baseline. However, even without the credits in IRA, aggregate investment is still projected to remain near the upper end of the historical range, given the competitiveness of solar, batteries and wind alongside rising electricity demand.