More than $2 trillion is currently sitting in Federal coffers. Between now and 2032, every penny will be invested in United States infrastructure. Ramping up domestic infrastructure construction will be challenging, but where there are challenges, there are opportunities for businesses to step in and capitalize on solving them.

The Biden administration had enjoyed two years of control of the White House, House, and Senate before the house was turned over to the Republicans in 2022. In that two-year period, the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) were passed. The lion’s share of the $1.2 trillion IIJA will be spent on updating America’s highways, bridges, public transit, and rail infrastructure, with about $153 billion also set aside for funding energy investments. The IRA significantly expanded federal energy funding, allocating $783 billion in direct spending, grants, and tax credits to “address domestic energy security and climate change.”

New investment in American infrastructure has been long overdue. The average age of infrastructure has crept up over the last two decades, with American waterworks topping the list with an average age of 49 years. The power grid is not much better: the average age is 40 years, with more than a quarter of installed infrastructure above 50 years. Based on the most recent Energy Administration data, the average customer experienced 7 hours of power interruption in 2021 – about double the hours of interruption experienced 10 years ago. Blackouts in California and Texas have captured headlines, but the data is clear that aging infrastructure across the country is a growing problem.

Some energy transmission infrastructure needs to be replaced, but much more needs to be built from the ground up. Hundreds of billions of dollars in incentives for renewable generation projects will increase overall U.S. energy production, and the best sites to produce renewable energy have little in common with the best sites for production when the grid was built in the 80’s.

Before an energy business can build a new generation facility, it must apply to be connected to the grid. Publicly available data shows that applications for new production have skyrocketed since the passage of the IIJA and the IRA. As of April of 2023, applications for transmission reveal over 2,000 gigawatts of production capacity waiting to be built. The current installed electrical capacity is about 1,250 gigawatts. Most of the proposals will never be built – from 2000 to 2017, only 14% of proposed capacity ever came online. Companies waiting for grid connection approval have seen connection request wait times spike from 18 months to almost four years. Even if the current backlog of proposals follows a similar trend of 14% completion, transmission is the bottleneck for energy companies seeking to capitalize on new federal funding.

Electrical component supply chains are still experiencing disruptions stemming from the onset of the pandemic. The nation-wide labor shortage continues to impact the industry, as the skilled tradespeople needed to complete these projects are in high demand and low supply. With the next decade’s flood of government spending inbound, demand-side pressure only looks to increase.

Improving infrastructure increases economic activity by facilitating the efficient movement of goods, services, and people, reducing transportation costs, attracting further investment, and promoting productivity and connectivity. But before any of that can happen, the $2 trillion in funding must be deployed. Uncertainty around long-term regulation and bureaucracy on the federal side is compounded by labor and supply chain issues on the private side. For American industry to get to work on giving our infrastructure the boost it needs, the government should continue to incentivize investment and ease needless friction. But in the meantime, businesses must rise to the occasion and bring new solutions to old problems, starting with the grid.