The Inflation Reduction Act Is Accelerating
A Bull Market In Electricity
The Inflation Reduction Act is “the single largest investment in climate and energy in American history” according to the U.S. Department of Energy.
It’s true.
The Act will accelerate alternative energy production from wind and solar.
The Act contains an extensive, complicated, and opaque mix of loans, guarantees, grants, subsidies, mandates, and penalties.
There’s so many it’s tough to find a true number.
But the most accepted is $400 to $500 billion in funding for alternative energy.
That’s a huge amount.
But it’s so big, the net result will not reduce inflation at all, at least when it comes to electricity prices.
Let Europe be your guide.
Europe has been far ahead of the U.S. expanding solar, wind, and other alternative energy technologies.
The obvious result has been much higher prices.
In fact, there’s a near perfect correlation between alternative energy and higher energy prices.
The chart below uses data compiled by Eurostat to shows the correlation:
The pattern is clear.
More alternative energy equals higher prices.
So if the Inflation Reduction Act is the greatest accelerator of solar and wind production in United States history…
It should also be the foundation for a long-term rise in electricity prices.
In the next few years electricity producers will be some of the highest cash flowing, most valuable businesses in the world.
