Kind of a ‘BFD’
The US passes a tonne of new bills, just this year, bills on everything from selling lions and tigers, to stopping fuel price gouging. But when the big cat himself, former US President Barack Obama, calls one bill a ‘BFD’, you know it’s important. 🦁
So what’s so hot about the new Inflation Reduction Act (IRA)? Despite the weird name, the bill contains a slew of fierce healthcare, climate and tax changes, which have already started to sink their teeth into share markets. Among the big winners are companies capturing and storing solar goodness from the sun. ☀️ As well as extending tax credits to people who want to get solar installed in their homes, new incentives have also been added for equipment to store that energy (think giant batteries).
This could be a game changer for companies like Stem (STEM) and Fluence Energy (FLNC), which are laser focused on storing renewable energy. Stem CEO John Carrington has called the bill ‘transformational’ for the company and the energy industry. It’s also helped to push up the price of the Investco Solar ETF (TAN) by 16% over the last month.
Electric vehicles (EVs) have also been invited to the party. The bill offers incentive tax credits of up to US$7,500 to buy a new electric or plug in hybrid vehicle. To qualify, however, car companies must do part of the manufacturing in the US, including final assembly. That’ll be good news for the likes of Tesla (TSLA), Ford (F) and General Motors (GM). But it’ll be a kick in the batteries for others, including Hyundai and KIA, which manufacture their EVs in South Korea.
With so many new tax complications, the bill also throws in US$80 billion towards the deadly accountants at the Inland Revenue Service. That should at least be enough to finally clear out the cafeteria. 😋
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