2024: US Clean Energy Investment Announcements Rose To $1tn

2024: US Clean Energy Investment Announcements Rose To $1tn

United States (US) recently saw a surge in private sector clean energy investment. The country saw the investment reaching $1 trillion in clean energy, semiconductors, and other advanced manufacturing initiatives. The move is set to see a spur in catalyzing growth of clean energy in the United States (US).

The data shows that announced investments now total over $1 trillion. Of this total, $446 billion is for semiconductors and electronics, $91 billion for clean energy manufacturing, $182 billion for electric vehicles and batteries, $54 billion for biomanufacturing, $49 billion for heavy industry, and $188 billion for clean power. Altogether, nearly $800 billion has been announced for manufacturing projects, strengthening domestic production and creating more resilient supply chains.

This investment paves the way for private sector-led growth. The Biden administration has so far invested in initiatives such as the Investing in America agenda, the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act (IRA) —which were designed together and are being implemented together.

These initiatives included grant and loan programs, tax credits, and other policies to catalyze private investment. These investments are undertaken to support the earliest stages of research and development through to commercial-scale manufacturing. They are also expected to help reduce the costs of key technologies and benefit American workers, businesses, and families. The US government has till now announced $39 billion in grants and other incentives. These incentives are made in semiconductor companies for fabrication plant construction and to produce new technologies in the United States. So far the US government announced $34 billion worth of preliminary agreements.

Clean Energy Investment

The most recent quarterly report shows that between the second half of 2022 and the first half of 2024, actual public and private investment in clean technology and infrastructure totaled $493 billion, a 71 percent increase from the two-year period before the Inflation Reduction Act was signed. Of that, the clean energy manufacturing and transportation technology sectors posted the fastest growth. This report concludes that for every $1 of federal investment, between $5 and $6 of private investment is being leveraged. However China factor continues to remain an errant. The Council of Economic Advisers (CEA) found a shift in foreign direct investment in clean energy manufacturing towards areas disproportionately affected by the “China shock,” places that experienced larger declines in manufacturing employment due to increased import penetration. Thus, this government-enabled, private-sector-led approach defy economist expectations and is crowding in private capital to critical sectors