President Biden signed the Inflation Reduction Act into law on August 16, 2022. In the almost-year since the historic climate bill was passed, 270 new clean energy projects have been announced with investments totaling $130 billion, according to a tally from Bank of America.
Companies that build clean technology and their suppliers will be big winners as energy infrastructure goes through the transition from depending on fossil fuels to decarbonized sources of energy, a recent BofA research note said.
In that research note, BofA identified stocks that stand to benefit from the IRA, organized by themes. The list includes only stocks that BofA has rated as "buy," and this list includes only those that have a climate tie-in. (The IRA also included some reforms to prescription drugs, but stocks related to those provisions are excluded here.) Some stocks cross multiple sectors, so are listed more than once.
Renewable energy
The Inflation Reduction Act provides production and investment tax credits for electricity generation and capital investments made in renewable projects. These companies manufacture parts that are used in renewable power construction, like wind blades or the semiconductors used in solar panels, or are in businesses related to the operation and management of these renewable power systems.
Array Technologies: Electric equipment company
Cummins: Machinery company
Eaton Corp.: Electric equipment company
FTCI Solar: Electric equipment company
General Electric: Industrial conglomerate
Honeywell International: Industrial conglomerate
ON Semiconductor: Information technology company working in semiconductors
Public Service Enterprise Group: Utility
Sunnova Energy International: Independent power and renewable electricity production company
Sunrun: Solar installation company
TPI Composites: Electrical equipment company that makes wind blades
Vistra Corp: Independent power and renewable electricity producer
Batteries and energy storage
The IRA includes tax credits for energy storage systems and these companies that make or supply energy storage systems, like batteries.
Bloom Energy Corp.: Electrical equipment company
Caterpillar: Machinery company
Cummins: Machinery company
Eaton Corp.: Electric equipment company
General Electric: Industrial conglomerate
Honeywell International: Industrial conglomerate
KBR Inc: Industrial professional services
ON Semiconductor: Information technology company working in semiconductors
Teledyne Technologies:Â Information technology company in the electric equipment space
Vistra Corp: Independent power and renewable electricity producer
Improvements to the electric grid
The IRA includes $5 billion in loans for building and improving transmission grid infrastructure, which is needed to continue to deploy clean energy. These companies are either utility grid operators, or create software or parts for operating the electric grid.
Ameren Corp: Utility grid operator
Aspen Technology: Information technology company that makes software for operating the grid
Bloom Energy Corp.: Electrical equipment company
Eaton Corp.: Electric equipment company
General Electric: Industrial conglomerate
Honeywell International: Industrial conglomerate
Xcel Energy: Electric utility grid operator
Clean fuels and biofuels
The IRA includes tax credits for the production of hydrogen fuel, biofuels, and sustainable aviation fuel. These companies manufacture either fuels, or products to make, store and transport these fuels.
Bloom Energy Corp.: Electrical equipment company
Bunge Ltd: Consumer staples business
Cameco Corp: Oil and gas and consumable fuels company
Caterpillar: Machinery company
Dover Corp.: Machinery company
Green Plains Inc.: Oil and gas and consumable fuels company
Honeywell International: Industrial conglomerate
KBR Inc: Professional services company
Teledyne Technologies: Information technology company
Carbon capture
The IRA boosts the 45Q tax credit for carbon capture and storage technology. These companies make equipment or parts that are used in carbon capture technologies.
Bloom Energy Corp.: Electrical equipment company
CF Industrial Holdings: Chemicals company
Honeywell International: Industrial conglomerate
KBR Inc: Professional services company
Linde PLC: Chemicals company
Nutrien Ltd: Chemicals company
Teledyne Technologies: Information technology company
Weyehaeuser: Real estate company
Clean vehicles
The IRA includes tax credits for electric vehicles and provisions designed to boost the production of batteries that go in electric vehicles and the raw materials that go into those batteries. These companies make electric vehicles or component parts for those electric vehicles and their charging infrastructure.
Cummins: Machinery company business
Eaton Corp.: Electric equipment company
Ford Motor Company: Manufacturer of electric vehicles
General Motors: Manufacturer of electric vehicles
Honeywell International: Industrial conglomerate
ON Semiconductor: Information technology company in the semiconductor space
Rivian Automotive: Manufacturer of electric vehicles
Materials, metals and mining
Electric vehicles and renewable energy generation both need specific raw materials. The IRA includes provisions that support production of both electric vehicles and renewable energy sources and also of steel which is used in the production of wind and solar production.
Livent Corp.: Chemical materials company
MP Materials: Metals and mining company
Nucor Corp.: Metals and mining company
Sigma Lithium: Metals and mining company
Industrial companies with building efficiency solutions
The IRA includes provisions to improve 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.
Dover Corp.: Machinery company
Eaton Corp.: Electric equipment company
Honeywell International: Industrial conglomerate
KBR Inc: Professional services company
Agriculture and forestry
The IRA includes $19.5 billion for agriculture conservation programs, $5 billion for forest management and restoration and provisions designed to support underserved farmers and landowners. These companies have programs designed to help farmers sequester carbon in the soil or forest management technology.
Nutrien Ltd: Chemicals company
Weyehaeuser: Real estate company
