Summary:
In the first two years under the IRA, businesses announced $130 billion in investments in 338 major clean energy and clean vehicle projects that are expected to create at least 110,000 jobs, according to E2. These projects include factories that produce electric vehicles, batteries, solar panels, wind turbine parts and other goods that benefit from tax credits and other policies created by the IRA.
But the economic benefits from these projects reach well beyond the direct investments and jobs. This analysis is designed to measure the broader indirect and induced economic benefits and the multiplier effect from the investments in these IRA-fueled clean economy projects.
According to this modeling, if completed the projects announced in the first two years of the IRA will create 621,000 direct and indirect new jobs – including 154,000 permanent jobs— throughout the economy over the next five years. This would add $237.5 billion to U.S. GDP; create $169.4 billion in new wages for workers and generate nearly $50 billion in new tax revenue for federal, state, and local governments.
This report builds on the research published in 2023 by E2 and BW Research, detailing the overall economic impacts of the 210 major clean economy projects announced in the first year of the IRA. In the second year of the IRA, an additional 128 clean energy projects were announced.
This analysis uses the original $130 billion in estimated capital expenditures that companies announced in investments for new developments and extrapolates another $32 billion in additional capital expenditures for project announcements that did not include a dollar amount or required an updated estimate based on available information.
Secondary economic benefits extend throughout the economy. When new clean energy projects and clean vehicle factories and thousands of new jobs come to a community, local restaurants sell more meals. Schools, police departments and local public works projects benefit from increases in local tax revenues. Local manufacturers and wholesalers sell more goods to feed the growing local supply chain. And small businesses such as accounting firms, construction contractors, landscaping companies and caterers see new revenue streams.
Together, these direct and indirect jobs and investments tell a nationwide story of opportunity for domestic manufacturing, clean energy production, transportation and infrastructure modernization and American ingenuity, thanks to the clean energy incentives and investments made possible by the IRA.
They are also just the beginning as E2 continues to track new projects being announced every month.
E2 Clean Economy Works project tracking. Available at https://e2.org/announcements/.
Key Findings
This modeling shows that (if all projects are completed) the 338 major projects tracked by E2 between August 2022 to August 2024 will create or support more than 621,000 jobs, including 467,000 construction jobs each year during construction and another 154,000 jobs each year after that.
While the under construction, these projects will add $237.5 billion to the nation’s GDP, more than the U.S. telecommunications sector adds to GDP annually, and another $20.4 annually once they are up and running—more than the nation’s textile manufacturing industry.
Additionally, these projects will result in $49.8 billion in new tax revenues for federal, state, and local governments while under construction, and an additional $4.4 billion annually after that.
COMBINED ECONOMIC IMPACTS OF MAJOR CLEAN ENERGY PROJECTS ANNOUNCED OVER TWO YEARS OF THE IRA
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- $162 BILLION in total private capital investments
+$17.5 BILLION in annual investments during operational life of projects
- $162 BILLION in total private capital investments
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- $169.4 BILLION in labor income during construction phase
+$12.9 BILLION in labor income annually during operational life of projects
- $169.4 BILLION in labor income during construction phase
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- $237.5 BILLION added to U.S. GDP during construction phase
+$20.4 BILLION added to U.S. GDP annually during operational life of projects
- $237.5 BILLION added to U.S. GDP during construction phase
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- $49.8 BILLION in tax revenue generated during construction phase
+$4.4 BILLION in tax revenue generated annually during operational life of projects
- $49.8 BILLION in tax revenue generated during construction phase
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- 467,000 JOBS each year for 5 years during construction phase
+154,000 JOBS supported annually during operational life of projects
- 467,000 JOBS each year for 5 years during construction phase
TOTAL INVESTMENTS INTO AND ANNUAL JOBS SUPPORTED BY CLEAN ENERGY PROJECTS, DETAILED BY ENERGY SECTOR
| Sector | Total Construction Phase Jobs (Annual jobs for 5 years) | Annual Operations Phase Jobs (Annual jobs for lifetime of projects) | Sector | Announced Capital Investment ($billions) | Extrapolated Capital Investment ($billions) | Total Capital Investment ($billions) | Annual Operational Investment ($billions) | |
| Solar | 66,736 | 21,882 | Solar | $15.94 | $6.93 | $22.87 | $2.47 | |
| Wind | 13,447 | 14,871 | Wind | $3.97 | $1.38 | $5.35 | $1.66 | |
| EV | 266,673 | 78,276 | EV | $79.22 | $9.22 | $88.44 | $8.84 | |
| Electric T&D | 6,626 | 2,502 | Electric T&D | $1.82 | $0.51 | $2.33 | $0.33 | |
| Battery Storage | 84,470 | 22,798 | Battery Storage | $23.27 | $6.87 | $30.14 | $3.17 | |
| Clean Fuels | 29,093 | 13,639 | Clean Fuels | $6.06 | $6.85 | $12.90 | $1.07 | |
| Total | 467,045 | 153,969 | Total Capital Investment | $130.27 | $31.77 | $162.04 | $17.54 |
Methodology
This analysis provides a thorough economic prediction of the impacts of the 338 announcements by filling in the gaps of publicly announced information. Modeled impacts differ from initial estimates offered by companies announcing new projects, tracked by E2. Eighty-eight of the 338 announcements provided no capital investment estimate and ninety-four provided no job creation estimate. Additionally, those estimates were inconsistently defined, lacking clarity on if they are direct jobs only or direct, indirect, and induced jobs, and if they were for construction or permanent positions.
To analyze these economic impacts from the clean energy programs and policies in the IRA, BW Research used IMPLAN economic modeling software to estimate the overall economic benefits from publicly sourced clean energy project announcements. BW Research developed a dozen economic impact models in total to represent six tracked sectors: Solar, Wind, Electric Vehicle (EV), Electricity Transmission & Distribution (Electric T&D), Battery Storage, and Clean Fuels. Based on this common methodology and assumptions, BW generated outputs at the national level, including earnings, tax revenue, employment and overall GDP value add.
For more information on methodology, see Appendix C in the report. For the list of all 338 projects announced between August 15, 2022 and August 16, 2024, see Appendix D.
For the latest full list of clean energy job announcements tracked by E2, visit https://e2.org/announcements.
About E2
E2 is a national, nonpartisan group of business leaders, investors, and professionals from every sector of the economy who advocate for smart policies that are good for the economy and good for the environment. E2 members have founded or funded more than 2,500 companies, created more than 600,000 jobs, and manage more than $100 billion in venture and private equity capital.
For additional insight into E2’s other reports, visit e2.org/reports.
Related Resources
- Business Survey: Impact of Arrested IRA Investments (Oct. 2024)
- Clean Jobs America 2024 (Sept. 2024)
- CLEAN ECONOMY WORKS | IRA Two-Year Review (August 2023)