Remarks by Secretary of the Treasury Janet L. Yellen in Raleigh, North Carolina

As Prepared for Delivery

I am glad to be here in North Carolina with Governor Cooper, Congresswoman Ross, and Congressman Nickel at Wake Tech Community College. North Carolina Community Colleges led the way more than a decade ago when they overhauled their curricula to equip students pursuing technical education with skills in clean energy technologies. More recently, Wake Tech has continued to lead by using federal funds to launch new training for jobs in the electric vehicle industry and in advanced building technologies. And Wake Tech is also moving forward to take advantage of one of the Inflation Reduction Act’s most significant reforms: direct pay, which allows tax-exempt entities like colleges and universities to benefit directly from the IRA’s clean energy tax credits. Wake Tech has informed us that it plans to claim credits for its major construction projects, including EV charging stations and the Central Energy Plant we just toured, which is acclaimed for its use of thermal and solar energy to heat, cool, and power the campus.      

What’s happening here is part of a broader transformation we’re seeing across the United States, thanks to the Biden-Harris Administration’s economic agenda and Congress’ support for the IRA. I’d like to focus today on the progress we’re making through the Inflation Reduction Act to bring down costs for American families and to invest in the clean energy industries that will drive our country’s growth.

But first let me step back and talk about the state of the U.S. economy. Over the past three and a half years, our Administration has driven a historic economic recovery. Today, the U.S. economy is strong. The second estimate for Q2 GDP growth came in last week at 3 percent. Unemployment remains near historic lows. Inflation has significantly declined.

But our Administration knows that prices for key household expenses like health care, housing, and energy are still too high. Bringing down the costs of these essentials is our Administration’s top economic priority. 

We’ve taken bold action. When global oil prices spiked following Russia’s invasion of Ukraine, we released 180 million barrels from the Strategic Petroleum Reserve and worked with our partners to put in place a novel price cap on Russian oil. We’ve had record domestic production of oil and natural gas, even as we ramp up clean energy production. As a result, we’ve kept global energy markets well-supplied and addressed our immediate needs while keeping prices at the pump low for American families: down from around $5 in June 2022 to around $3.30 today.

But we can’t act only in response to crisis, and that’s where the Inflation Reduction Act, among many other actions, comes in.

I. Lowering Energy Costs

The IRA was designed to help families shrink and stabilize their energy bills right away and to serve them in the years to come. 

I will start with the IRA’s residential clean energy and home energy efficiency tax credits, which enable American families to make much needed investments at much lower costs. 

Last month, the IRS published new data showing that 3.4 million American families have claimed $8.4 billion in residential clean energy and home energy efficiency tax credits so far for tax year 2023. Credits for residential clean energy went toward solutions like solar panels and battery storage. Families claiming these credits have claimed an average of $5,000. Credits for energy efficiency went towards improvements like heat pumps, efficient air conditioning, and insulation, with families claiming $880 on average. 

Taxpayers across all 50 states are claiming these credits. Here in North Carolina, the data we have so far shows around 90,000 families took advantage of them. These households claimed over $100 million in residential clean energy credits and over $60 million in energy efficiency credits. These preliminary numbers for 2023 are expected to increase as more data comes in. And this is just one year of claims.

It’s easy to see how these credits make a difference. They make home improvements more affordable for millions of families across the country. Households that have made improvements can then see increased savings and reduced price volatility in their energy bills.  While exact savings vary, one national study found that households that adopted solar for their homes had median savings of $700 in 2021. And once the cost of panels is paid off, savings from adopting solar can increase to as much as $2,000 each year. 

Families here and across the country are benefiting from other IRA credits as well, such as $7,500 off the purchase of a qualifying electric vehicle. So far just this year, consumers have saved $1.5 billion in upfront costs across purchases of more than 250,000 clean vehicles. This will allow Americans across the country to reduce their spending on gas. 

And from residential clean energy and home energy efficiency credits to credits to purchase EVs, our work doesn’t stop at making these credits available. We are doing everything possible to make sure accessing them is as easy as possible. This includes our efforts to transform the IRS into a modern tax agency that provides taxpayers the support they deserve to get the credits for which they’re eligible. 

II. Scaling up Manufacturing and Clean Energy

It’s of course not just near-term savings we’re focused on. Across the country, IRA incentives are also fueling massive private sector investments in manufacturing and clean energy. We are scaling up our domestic manufacturing capacity to reverse a decades-long decline in manufacturing, but now with a focus on the clean energy industries of the future. 

Last fall, I was in Bessemer, North Carolina to visit Livent, which built the first new lithium hydroxide production facility in North America in more than a decade. This expanded U.S. manufacturing capacity for this key input for electric vehicle batteries by 50 percent. Livent cites the IRA as a key driver of its investments, as do many companies I’ve heard from across the country. And as production of clean energy increases, costs will drop over time, making clean energy even more affordable for American consumers. 

These investments are also creating jobs for people and places that historically haven’t benefited from enough investment. Treasury analysis shows that here in North Carolina, 97 percent of clean energy investments announced since the IRA was passed have been in counties with college graduation rates below the statewide average rate. 93 percent have been in counties with median household incomes below the statewide average rate. And key IRA provisions help make sure these jobs are good ones and that there are pathways to them through expanded training and apprenticeship programs. 

III. Conclusion

Let me end by emphasizing that there are some out there who want to eliminate the credits I’ve talked about today. As we see clearly here in North Carolina, this would be a historic mistake. Rolling them back could raise costs for working families at a moment when it’s imperative that we continue to take action to lower prices. It could jeopardize the significant investments in manufacturing we’re seeing here and across the country, along with the jobs that come with them, many of which don’t require a college degree. And it could give a leg-up to China and other countries that are also investing to compete in these critical industries.

This all means we have more work to do—from defending the IRA’s credits to getting the word out so that as many Americans benefit from them as possible. But we are already changing the lives of American families, now and for the future. I am optimistic that our efforts will continue to pay off. 

Thank you for having me here today. 

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