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Raj Agrawal, global head of infrastructure at KKR & Co., has suggested that the US election in November could leave some programs and regulations of the Inflation Reduction Act vulnerable to repeal. Clients have asked whether an election outcome could result in the repeal of the Act, which provides funding and tax incentives for clean energy innovation and research. However, Agrawal asserts that investment in renewables is a structural trend that will persist irrespective of changes in public funding and subsidies.
Future of Inflation Reduction Act Post US Election
Raj Agrawal, KKR & Co.’s global head of infrastructure, suggests the US election’s potential impact on the renewables market and the Inflation Reduction Act (IRA). Clients are questioning whether an electoral outcome might lead to the repeal of the Inflation Reduction Act. The Act provides hundreds of billions of dollars in funding and tax incentives for clean energy innovation, research, and development.
IRA Revisions Possible, But Complete Repeal Unlikely
Agrawal states that while a complete repeal of the IRA is highly unlikely, revisions to the IRA tax-code and discretionary spending programs could be influenced by the White House’s occupants and Congress.
Growth in Renewable Energy Sector Continues Despite Uncertainty
Public funding and subsidy uncertainties aside, Agrawal insists that the renewable energy sector’s structural trend is a constant. He cites the sector’s continued demand and growth over the past 22 years, with the International Energy Agency projecting further growth in global capacity over the next five years than the past century.
Rise in Infrastructure Businesses Validates Sector
A significant consolidation trend, along with the emergence and growth of rival-managed businesses, validates infrastructure as an asset class. This sector drew attention earlier this year when BlackRock Inc. procured Global Infrastructure Partners for about $12.5 billion.
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