Bank of America has released a list of stock selections regarding firms that will profit from the famous Inflation Reduction Act. The stock selections have been divided into a few sections which are renewable energy, batteries and energy storage, upgrades for the power grid, clean fuels and biofuels, carbon capture utilization and storage, clean vehicles, metals and mining, building efficiency solutions, and agriculture/forestry. Per Bank of America, after the IRA was put into effect, 270 new ventures in clean energy have been revealed, totaling an estimated worth of $130 billion.
On August 16, 2022, President Biden signed the Inflation Reduction Act into law. Since the passing of the landmark climate legislation, Bank of America has recorded investments of $130 billion in 270 new clean energy projects. According to a research note from BofA, companies engaged in the production of clean technology and their suppliers are poised to benefit significantly from the shift away from fossil fuels towards emissions-free energy sources. The note further identified stocks that BofA has rated as "buy" and which directly tie into the provisions of the IRA. These include stocks from different sectors that have been listed multiple times. The research note did not contain data related to the IRA's reforms on prescription drugs, as stocks involved in such reform did not make the list.
The Inflation Reduction Act offers production and investment tax credits for electricity production and investments made in renewable projects. Firms that manufacture parts used in renewable power construction, such as wind blades or semiconductors employed in solar panels, or companies engaged in operations and management related to these renewable power systems, are eligible for these credits.
Array Technologies: An electric equipment firmCummins: A machinery businessEaton Corp.: An electric equipment corporationFTCI Solar: An electric equipment businessGeneral Electric: An industrial conglomerationHoneywell International: An industrial conglomerationON Semiconductor: An information technology company operating in semiconductorsPublic Service Enterprise Group: A utilitySunnova Energy International: An independent power and renewable energy producerSunrun: A solar installation companyTPI Composites: An electrical equipment company that manufactures wind bladesVistra Corp: An independent power and renewable energy manufacturer
The Internal Revenue Act provides tax incentives for energy storage systems and the businesses that make them or provide them such as batteries. Examples of firms that would qualify for these credits are Bloom Energy Corp. (specialising in electrical equipment), Caterpillar and Cummins (machinery companies), Eaton Corp. (electric equipment), General Electric (industrial corporation), Honeywell International (industrial giant), KBR Inc (industrial professional services), ON Semiconductor (information technology firm specialising in semiconductors), Teledyne Technologies (info tech in the electric equipment sector) and Vistra Corp (independent power and renewable energy producer).
The IRA includes $5 billion earmarked for loans for construction and improvement of transmission grid infrastructure, which is essential to the continued deployment of clean energy. These loans are intended for either utility grid operators, or manufacturers of software or components used for running the electric grid.
Ameren Corp.: Utility grid operator
Aspen Technology: IT firm that produces software for managing the grid
Bloom Energy Corp.: Electrical apparatus business
Eaton Corp.: Electrical equipment business
General Electric: Industrial giant
Honeywell International: Industrial giant
Xcel Energy: Electric utility grid operator
The IRA offers tax credits for the generation of hydrogen fuel, biofuels, and sustainable aviation fuel, industry players that make, store, and move these fuels, as well as products related to that production. Such players include Bloom Energy Corp., a provider of electrical equipment, Bunge Ltd., a consumer staples business, Cameco Corp., active in oil, gas, and consumable fuels, Caterpillar, a machinery firm, Dover Corp., producing machinery items, Green Plains Inc., involved in oil, gas, and consumable fuels, Honeywell International, primarily an industrial entity, KBR Inc., a supplier of professional services, and Teledyne Technologies, an information technology business.
The 45Q tax credit for carbon capture and storage technology has been increased by the IRA. These firms supply gear or components that are utilized in carbon capture technologies, such as: Bloom Energy Corp. for electrical equipment; CF Industrial Holdings for chemicals; Honeywell International as an industrial conglomerate; KBR Inc. for professional services; Linde PLC for chemicals; Nutrien Ltd for chemicals; Teledyne Technologies for information technology; Weyehaeuser for real estate.
The IRA contains incentives for electric cars and regulations created to stimulate the manufacturing of batteries utilized in electric vehicles and the materials included in said batteries. Enterprises that create electric vehicles or components for them and associated charging systems are benefitting from this.
Cummins: Machinery businessEaton Corp.: Electric equipmentFord Motor Company: Producer of electric vehiclesGeneral Motors: Producer of electric vehiclesHoneywell International: Industrial conglomerate ON Semiconductor: Information technology firm in the semiconductor industryRivian Automotive: Maker of electric vehicles
IRA provisions are in place to back up the production of electric vehicles and renewable energy sources, as well as that of steel, which is essential for wind and solar energy production. Livent Corp., a chemical materials firm, and metals and mining companies MP Materials, Nucor Corp., and Sigma Lithium are among the stakeholders involved.
The IRA contains measures designed to enhance the energy efficiency of residential and commercial structures, and these businesses supply either energy efficiency apparatus or technology to enhance the performance of those energy efficiency systems.
Dover Corporation is a machinery firm, Eaton Corporation deals in electrical gear, Honeywell International is a diversified industrial corporation and KBR Inc. provides professional services.
The IRA includes $19.5 billion for agriculture conservation programs, $5 billion for forest management and restoration and provisions meant to back underserved farmers and landowners. These companies have initiatives in place to aid farmers capture carbon in the soil or forestry management technology.Nutrien Ltd: Chemicals corporation Weyehaeuser: Real estate corporation
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