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President Joe Biden signs the Lower Inflation Act of 2022 at the White House on August 16, 2022.
Mandel Ngan | Afp | Getty Images
President Biden He signed the Decreasing Inflation Act into law on August 16, 2022. In the nearly year since the passage of the landmark climate law, 270 new clean energy projects have been announced with investments totaling $130 billion, according to a tally from American bank.
Companies that build clean technology and their suppliers will be the big winners as energy infrastructure transitions from reliance on fossil fuels to zero-carbon energy sources, said a recent research note from Bank of America.
In that research note, BofA identified stocks that could benefit from an IRA, arranged by topics. The list includes only stocks that Bank of America has rated as “Buy,” and this list includes only stocks with a climate correlation. (The IRA also included some prescription drug reforms, but stocks related to those provisions are excluded here.) Some stocks are across several sectors, so they’re listed more than once.
Renewable energy
The Inflation Reduction Act provides tax exemptions on production and investment for electricity generation and capital investments made in renewable energy projects. These companies manufacture parts used in renewable energy constructions, such as wind blades or semiconductors used in solar panels, or in work related to the operation and management of these renewable energy systems.
KERN COUNTY, CALIFORNIA – MARCH 23: LADWPs Pine Tree Wind Farm and Solar Power Plant in Tehachapi Mountains Tehachapi Mountains on Tuesday, March 23, 2021 in Kern County, CA (Irrfan Khan/Los Angeles Times via Getty Images)
Irfan Khan | Los Angeles Times | Getty Images
Batteries and energy storage
Improvements to the electrical grid
The IRA includes $5 billion in loans to build and improve the transmission network infrastructure, which is essential to continue the deployment of clean energy. These companies are either operators of utility networks, or they create software or parts to operate the electric grid.
Transmission towers at a CenterPoint Energy power plant on July 11, 2022 in Houston, Texas. ERCOT (Electrical Reliability Council of Texas) is urging Texans to voluntarily conserve power today, due to extreme heat that could cause blackouts.
Brandon Bell | Getty Images
Clean fuels and fuels
carbon capture
Vehicle cleaning
The IRA includes tax credits for electric vehicles and provisions designed to boost production of the batteries that go into electric vehicles and the raw materials that go into those batteries. These companies make EVs or component parts for EVs and the infrastructure to charge them.
Ford CEO Jim Farley wins a Ford F-150 Lightning truck before announcing at a press conference that Ford Motor Company will partner with the world’s largest battery company, a China-based company called Contemporary Amperex Technology, to create an electric vehicle battery plant in Marshall, Michigan. , on February 13, 2023 in Romulus, Michigan.
Bill Bogliano | Getty Images News | Getty Images
materials, minerals and mining
Both electric vehicles and renewable energy generation need specific raw materials. The IRA includes provisions that support the production of both electric cars and renewables, as well as steel for wind and solar power production.
Livent Corp.: Chemical company
MP materials: Metal and Mining Company
Nucor Corp.: Metal and Mining Company
sigma lithium: Metal and Mining Company
Industrial companies with efficient construction solutions
The IRA includes provisions for improving the energy efficiency of residential and commercial buildings and these companies provide either energy efficiency equipment or technology to improve the operation of those energy efficiency systems.
New York City skyline.
SOPA Pictures | Getty Images
Agriculture and forestry
The IRA includes $19.5 billion for agriculture conservation programs, $5 billion for forest management and restoration, and allocations designed to support disadvantaged farmers and landowners. These companies have programs designed to help farmers sequester carbon in soil or forest management technology.
Nutrient Ltd: Chemical company
Weyehaeuser: real estate company
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