Last week, the Inflation Reduction Act (IRA) was signed into law in the US. The Act has passed a $369 billion bill to reduce emissions through different measures, including the promotion of residential electrification upgrades across the US.
If the Act achieves its goals, the pace of electrification in US homes should accelerate. We believe companies in the electrification space will leverage the regulatory tailwinds to bring incremental innovation to the market and reach consumers faster.
One of the critical challenges to achieving full electrification in the US is the amperage capacity of electrical systems. Bloomberg recently published an article that conveys the problem with traditional electrical panels very well. As many as 48 million homes in the United States may need electrical panel upgrades to manage the increased power demands of an electrified future (see article).
Our portfolio company, SPAN, is the most advanced smart electrical panel in the market today, a component we believe will be critical in most fully electrified homes in the mid-term.
See some additional comments on the practical implications of the Act for the company: Span and the IRA...