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E&E News
24-07-2025
- Business
- E&E News
Lobbyists spent millions to save green energy. Wins were few.
Renewable energy lobbyists dumped millions of dollars over the past few months in a frenzied push to save green energy priorities. In the end, they didn't get much bang for their buck. As Republicans ramped up their efforts to roll back tax credits, the top renewable energy advocacy organization in the country, the American Clean Power Association, spent a record $3.8 million lobbying federal officials for the second quarter that ended in June. That's more than six times as much that they spent a year ago in the same time period, new disclosures show. The GOP ended up slashing the incentives anyway in the One Big Beautiful Bill Act, the tax and spending budget reconciliation bill. Advertisement 'We all failed to appreciate just the intensity of the desire to undo any fraction of any figment of any remaining Biden policy,' Jason Grumet, the group's CEO, said of former President Joe Biden's green agenda on POLITICO's Energy podcast. 'The [Trump] administration really prioritized the narrative around ending the Biden program, above an assessment of what the benefits were.' ACP was far from the only group that significantly boosted its advocacy work in the period from April to June. Congressional lobbying disclosures due this week show that dozens of companies and associations in wind, solar, batteries, electric vehicles and related fields went all out in trying to persuade lawmakers not to quickly halt their tax subsidies. Other sizable increases came from the Solar Energy Industries Association, which more than doubled its spending to $950,000 for the quarter. The Zero Emission Transportation Association's spending was more than four times the level a year prior, at $130,000. While much of the spending by lobbyists was aimed at preserving green energy tax credits, advocates also spent money on other renewable energy priorities and legislation. The lobbyists were, for the most part, unsuccessful in pushing back at what President Donald Trump and many Republicans had long promised: to end the incentives from the Democrats' Inflation Reduction Act that the GOP has labeled the 'Green New Scam.' The new law sets a quick timetable to end incentives for wind and solar, as well as batteries, electric vehicles and vehicle charging infrastructure, while repealing other pro-clean-energy policies. 'Was it a failure? No, absolutely not.' Yet, as they reflect on the fight, some advocates say they are proud of their efforts. 'I've seen some armchair quarterbacks saying the industry failed, sure, but those people weren't involved in the actual work, don't know what they are talking about, or both,' said Colin Hayes, founding partner at Lot Sixteen, which has a number of clients in clean energy and batteries. 'Was it a failure? No, absolutely not. Every single Republican voted against the IRA in the first place, so anything north of complete repeal was a win.' Indeed, industry advocates did notch some accomplishments. The tax credits do not end immediately, and a last-minute push by some Senate Republicans gave developers one year to start their wind and solar projects and get the credits. And they defeated an earlier Senate proposal to impose a new excise tax on wind and solar projects based on the amount of equipment they use from China and other adversaries. Renewable energy lobbyists and their allies also softened supply chain mandates and preserved a practice allowing companies to transfer credits to third parties. The Kayenta Solar Plant in Arizona. |Not all industry fared the same. Individual solar manufacturing, nuclear, and biofuel companies saw more success after they sent their CEOs to the Capitol, said Jeff Navin, founder of the firm Boundary Stone, which represents solar manufacturers, battery companies and similar clients. But advocates representing solar and wind energy developers 'ran into headwinds of Donald Trump, who has strong opinions about wind in particular,' he said. 'They did change some minds of Republicans, not enough to overcome Trump's tweets and the political disaster of cutting Medicaid.' Ultimately, he said, 'I think it's easy to write the story that says they spent a lot of money and they lost,' Navin said. 'That's true and you don't want to lose. [But] it's not like they didn't get anything for it. We just have more work to do to build and broaden the coalition.' Conservatives celebrate Conservatives and fossil fuel advocates acknowledge they didn't get everything they wanted — but they did get one thing: 'One of the highest priorities was to get these things phased out before President Trump left office because in the past they've always sunset and then the political climate changed,' said American Energy Alliance President Tom Pyle. Renewable energy companies' strategies to save the credits largely focused on hiring Republican lobbyists, flooding congressional offices and trying to appeal to moderates with big investments in their districts. They emphasized forecasts of job losses if the credits were repealed; SEIA, for instance, repeatedly cited research it commissioned saying that repeal threatened 330,000 solar jobs. SEIA and other groups even passed out stickers with Trump's signature 'energy dominance' catchphrase on Capitol Hill. But observers noted it was too little, too late. 'Their entire strategy was to build relationships with the Democratic Party and green groups,' Pyle said of solar and wind lobbies. 'They ran into a brick wall in the name of President Donald Trump.' Even before the last election, groups like ACP have made a point of increasing their outreach to Republicans but their efforts have not softened the president's animosity to renewable energy. And many GOP solar and wind allies on the Hill seem to feel they can only do so much to buck Trump's agenda. In a recent interview with POLITICO's E&E News, SEIA CEO Abigail Ross Hopper highlighted the sector's accomplishments in the budget legislation. 'We have emerged from this legislative battle with the tax credits certainly curtailed, but not eliminated, and with some paths forward that are super important,' she said. 'I don't know that there's anything at the moment I can think of that we would have done differently.' Abigail Ross Hopper, CEO of the Solar Energy Industries Association, speaking last year in Washington during the group's 50th anniversary celebration. | Eric Kayne/AP Big spending elsewhere Grumet, the American Clean Power Association CEO, said he and others misjudged how far Republicans would go in rolling back the policies that had been enacted or expanded in the Inflation Reduction Act. 'I think we have become, as an industry, almost a political football in which both sides exaggerate either our glory or our dismay and use us as a talking point for their larger political ambitions. I think that the Congress misread the bipartisan support for clean energy,' Grumet said. A number of individual clean energy companies also boosted their advocacy work in the second quarter. Rooftop solar firm SunRun spent $320,000 in the quarter, up more than 500 percent from a year prior. Solar manufacturer First Solar's $520,000 in lobbying was more than double the same period in 2024. In wind, Vestas North America put $100,000 into lobbying, up from $30,000 a year before. Tesla doubled its expenditures to $320,000. Many of the companies hired new lobbying firms during the reconciliation fight, or retained their first firms. Advantage Capital, an investment firm in renewable energy, hired Barker Leavitt and Patel Partners in June, contributing to a 600 percent increase in its lobbying expenditures. T1 Energy, a solar and battery manufacturer, signed with Continental Strategy and Checkmate Government Relations in June and spent $260,000 in the quarter, after not having any lobbyists before November 2024. The clean energy industry similarly carried out an intense lobbying campaign in 2022 in the lead-up to the passage of the Inflation Reduction Act. But the sharp increase in lobbying expenditures in 2025 was unprecedented. ACP, for instance, had never exceeded $700,000 in one quarter since it launched in 2021. Its predecessor, the American Wind Energy Association, spent a record $1.8 million in the second quarter of 2009, at the peak of debate over climate change legislation. SEIA's previous quarterly record was $710,000, set in the first quarter of 2025. Reporter Nico Portuondo contributed. This story also appears in Climatewire.
Axios
02-07-2025
- Business
- Axios
Key renewables official looks forward to permitting overhaul
A top renewables industry official is looking ahead to overhauling permitting and having wind and solar meet fast-rising demand, even as the House is weighing the Senate bill that would ax incentives. Why it matters: Absent a dramatic plot twist on Capitol Hill, the industry faces a much tougher future, with the GOP yanking unprecedented Biden-era support. There's no sugarcoating it: analysts now see much slower renewables growth. The body blow could have been even worse. But GOP moderates forced the removal of new taxes on wind and solar projects and softened some deadlines. The intrigue: With the "polarizing" reconciliation fight in the rearview, American Clean Power Association CEO Jason Grumet hopes for a revival of permitting legislation that made progress last year. (ACP's criticism of the reconciliation bill is here.) He told me he sees an opening for the wider energy industry to get back to "advocating for shared interests," noting a "shared frustration we have with the inability to modernize the country." "The administration has expressed significant interest in permitting reform. It's going to require the good old-fashioned, 60-vote, bipartisan legislative process," Grumet said. Friction point: The budget bill pares back tax credits just as U.S. power demand is rising quickly after roughly 15 static years. That means renewables will remain needed resources in a country that needs more electricity — and fast, he said. The big picture:"We're not competing with natural gas because every single electron is needed. And we're certainly not competing with future technologies like geothermal or advanced nuclear," Grumet said of renewables. "The incredible economic demand and the fact that electricity is not a nice-to-have, but it's a must-have commodity, gives us confidence that we're going to continue to see clean power be the fastest to market, and in many parts of the country, the lowest-cost resource." Threat level: The increased U.S. demand — fueled in no small part by AI — has changed the landscape, he said. "When we had no real growth in demand, the country could tolerate bad federal policy, because, you know, you could screw up this side of the economy, you could screw up that side of the economy, but there was enough energy going around to kind of cover the gaps," Grumet said. "Going forward, we do not have that luxury. Skyrocketing demand that strains reliability and increases prices focuses the mind." That creates an opportunity to "build upon the closure of this chapter" and begin building more durable policy. Between the lines: I asked Grumet about a theme running through the budget fight: how IRA red state investments and jobs didn't deter major rollbacks. "It's true that the intense polarization actually overwhelmed the rational self-interests of the majority of the Republican members of the Senate," he said. But Grumet sees shared interests exerting more sway going forward — he was quick to note that senators including John Curtis and Lisa Murkowski helped strip some of the harshest provisions even as they backed the broader bill. The bottom line: "That coalition of the pragmatic has actually just started to reassert itself," he said, "and we're going to, certainly with the permitting reform debate and others, try to now grow that ballast in the system."
Japan Times
01-07-2025
- Business
- Japan Times
Solar and wind industries see existential threat in U.S. tax bill
As Senate Republicans debate President Donald Trump's tax and spending bill, renewable energy companies are reeling at what looks like a worst-case scenario for the industry. The latest version of the Senate bill includes a new excise tax on wind and solar projects with certain Chinese components, a late addition that stunned renewable advocates. Given China's dominance of the solar supply chain, developers would struggle to find ample equipment, including wafers, from other countries. The bill would also roll back clean energy tax credits sooner than the House version of the package. It would require wind and solar projects to be fully operational by the end of 2027 to qualify for incentives. Many observers had expected the Senate to ease the phaseout — not accelerate it. The moves by the Senate, as it seeks to cut spending to offset trillions of dollars in tax cuts, "came out of left field' and shocked the industry, according to Ben King, an associate director with research group Rhodium Group's Energy & Climate practice. If passed in its current form, the "One Big, Beautiful Bill' would threaten billions of dollars of investments, hobbling energy development at a time of skyrocketing power demand. It would also risk causing household energy bills to spike higher. "The willingness of the Senate to suggest policy changes that will dramatically increase cost of energy to their consumers and sacrifice significant job growth is very surprising,' said Jason Grumet, chief executive officer of the American Clean Power Association, or ACP, an industry trade group. "It suggests that the effort to repolarize this debate is now taking precedence over their actual constituent interests.' Republican Senators Joni Ernst and Chuck Grassley of Iowa, along with Lisa Murkowski of Alaska, worked Monday to advance an amendment to soften the clean electricity tax credit phaseout and jettison the proposed excise tax. The tax is "unprecedented,' and "the extremity of the proposal may motivate key Senators to support excise tax repeal,' analysts for research provider Capstone wrote in a note Monday. ACP estimates the new tax would raise costs on American clean energy companies by $4 billion to $7 billion in the next 10 years, while Rhodium projects it will result in a 10% to 20% increase in the cost of building wind and solar. Solar panels at the Cascadilla Community Solar Farm, owned by Cornell University, in Dryden, New York on April 10, 2023. | Bloomberg That cost increase would "drive down deployment' and, for some new solar and wind facilities that would otherwise be economically competitive with natural gas, push them "out of the sweet spot,' said King. Because this kind of policy has never been implemented before, the uncertainty it introduces would have a "chilling effect' on investment in renewables, he added. The current proposal would also prevent 300 gigawatts of wind and solar — on par with the output of 300 nuclear reactors — from being brought online within the next 15 years, ACP estimates, which Grumet called a "dramatic interruption' of bringing power to the grid as demand soars. Natural gas couldn't easily fill the gap, due to a shortage of turbines, while nuclear power plants take years to bring online. Industry wasn't alone in its dismay over the changes. On his platform X, Elon Musk called the bill "political suicide for the Republican Party' and "utterly insane and destructive' in its impact on energy. Labor groups assailed the potential for job losses, with North America's Building Trades Unions President Sean McGarvey calling the legislation "the biggest job-killing bill in the history of this country.' "The president has demanded that renewable energy credits for wind and solar be terminated as soon as humanly possible, and the Senate bill meets that request,' White House spokeswoman Abigail Jackson said in an email. Asked earlier Monday to respond to an allegation the excise tax would be tantamount to terminating more than a thousand Keystone XL pipeline projects, White House spokeswoman Karoline Leavitt said the president understands "legislators want to protect jobs in their communities and in their districts, and so he understands why some of them are against this provision, but he also understands why people want the provision.' The Trump administration has made a concerted push to shift federal policy to favor fossil fuels over renewables. Agencies have moved to strip $3.7 billion in loan support for low— and zero-emission power projects and unexpectedly paused construction of an offshore wind farm for weeks, both unprecedented moves. But the clean energy incentives in the Inflation Reduction Act have spurred investment predominantly in red states and districts, giving some congressional Republicans reason to think twice about nixing them. As lawmakers debate the bill, one thing is clear: Its current iteration would "signal a real step back' on the energy transition, according to Rhodium's King. "Decarbonization effectively flatlines from where we are today,' he said.
The Hill
28-06-2025
- Business
- The Hill
Updated Senate bill slashes wind and solar incentives – and adds a new tax
An updated draft of the Senate's megabill text slashes tax incentives for wind and solar energy – and adds a new tax on future wind and solar projects. The initial draft released by Senate Republicans earlier this month cut the credit for any wind and solar projects that did not 'begin construction' by certain dates, while the latest version bases incentives on when projects actually begin producing electricity — a much higher bar to clear. The first draft gave any project that began construction this year full credit, any project that began construction next year 60 percent credit and any project that began construction in 2027 20 percent of the credit, before they were phased out thereafter. The new legislation instead says that the credits will only apply to facilities that begin producing electricity before the end of 2027. In addition, it imposes a new tax on some wind and solar projects that are placed in service after 2027. The projects that will be taxed if a certain percentage of the value of their components come from China. The Democrats' 2022 Inflation Reduction Act included hundreds of billions of dollars in tax credits for low-carbon energy sources, including renewable energy. These subsidies were expected to massively reduce the U.S.' planet warming emissions. The GOP's cuts to the credits are expected to severely curtail those gains. If they pass, the cuts represent a win for the party's right flank, which has pushed for major cuts to the credits, and a loss for it's more moderate wing which has called for a slower phaseout. The renewables lobby slammed the changes as hampering the sector. 'In what can only be described as 'midnight dumping,' the Senate has proposed a punitive tax hike targeting the fastest-growing sectors of our energy industry. It is astounding that the Senate would intentionally raise prices on consumers rather than encouraging economic growth and addressing the affordability crisis facing American households,' Jason Grumet, CEO of the American Clean Power Association, said in a written statement. 'These new taxes will strand hundreds of billions of dollars in current investments, threaten energy security, and undermine growth in domestic manufacturing and land hardest on rural communities who would have been the greatest beneficiaries of clean energy investment,' he added.
Yahoo
13-05-2025
- Business
- Yahoo
Amid tariff uncertainty, US grid battery industry faces an uphill climb
Companies making and deploying lithium-ion batteries in the U.S. recently gathered in Washington, D.C., to ask the federal government for the policy support they say they need. Their request came alongside a big promise: to cumulatively spend $100 billion by 2030 to build a self-sufficient, all-American grid battery industry. 'Within five years, and with $100 billion in investment, we can satisfy 100% of U.S. demand for battery storage,' said Jason Grumet, CEO of the American Clean Power Association, a trade group. 'This is unquestionably an ambitious commitment, but it is absolutely achievable if the private and public sectors work together,' he said. The $100 billion promise represents a major increase in the $10 billion to $15 billion that the American Clean Power Association estimates was invested in U.S. grid battery manufacturing and deployment last year. As recently as a few months ago, industry analysts largely agreed that a domestic ramp-up on the scale of what Grumet proposes was at least possible, if not inevitable. Lucrative federal tax credits for companies that build and deploy clean energy technology within the nation's borders have helped close the price gap between U.S.-made batteries and those made in China, the world's main supplier of lithium-ion battery modules, cells, and materials. These tax incentives, created by the 2022 Inflation Reduction Act, have also helped bolster the economics of installing large-scale batteries alongside solar power. Solar and batteries are by far the fastest-to-deploy option for utilities seeking to meet rising electricity demand from data centers, factories, electric vehicles, and broader economic growth. The two energy sources have dominated new additions to the U.S. grid in recent years. But that's changing under the Trump administration. Republicans in Congress may kill the Biden-era tax credits that make domestic battery manufacturing possible. The Department of Energy Loan Programs Office, which has lent huge sums to battery manufacturers like Eos and Kore Power, could soon be shuttered or radically scaled back. And President Donald Trump's aggressive and ever-shifting tariffs are making it more expensive for manufacturers to produce batteries in the U.S., since the duties raise the costs of everything from cells imported from China to general-purpose materials like steel and aluminum. On Monday, China and the U.S. announced they'd temporarily ease tariffs on one another, but the situation has not been permanently resolved and leaves tariffs on Chinese imports at 30%. Manufacturers and developers still lack clarity about what the underlying economics of their business will look like months from today. As Grumet conceded in a briefing with reporters before the American Clean Power Association's D.C. media event in April, 'there is a remarkable tension right now between probably the best fundamentals for investment in the energy sector that we've seen in a generation and the greatest amount of uncertainty that we've seen in a generation.' When it comes to plugging batteries into the U.S. power grid, tariffs are the most immediate threat by far. The impacts are already showing up in sagging forecasts and postponed projects. In February, the U.S. Energy Information Administration predicted the country would deploy more than 18 gigawatts of batteries in 2025, up from 11 gigawatts in 2024, continuing what's been a meteoric increase over the past several years. But the forecast for 2025 grid battery additions has fallen in recent months, at least according to the latest analysis from the American Clean Power Association and consultancy Wood Mackenzie, which is tucked into the end of the clean energy industry group's fact sheet for its $100 billion-by-2030 investment pledge. They predict that a little over 13 GW of energy storage will be plugged into the nation's grid this year. Several factors play into that drop-off, but the primary one is that nearly 70% of lithium-ion batteries in the U.S. came from China last year — and that tariffs on Chinese lithium-ion batteries and components had spiked to 156% as of last month, according to BloombergNEF. Monday's news that the U.S. and China had agreed to a 90-day pause on their dueling tariffs means that the blanket 145% tariffs that the Trump administration had imposed on China in April will fall to 30% as of Wednesday — at least if the deal holds. Now, once again, energy storage companies will be recalibrating the economics of their projects, almost all of which currently rely on battery materials or components from China. 'For the next five to seven years, there is no cost-effective, time-critical alternative to battery storage to meet domestic electricity demand,' said David Fernandes, chief financial officer of OnEnergy, a grid storage and microgrid developer with 120 megawatt-hours of projects in operation and 3 gigawatt-hours in development across the U.S. and Latin America. 'That means cells from China.' Tariffs on Chinese imports simply mean the batteries that the U.S. grid needs 'will just be more expensive,' he said, which will in turn drive up electricity prices. Regardless of where tariffs settle, they have already disrupted some grid storage projects. Take Fluence, a major U.S.-based energy storage provider that's made more than $700 million in commitments to manufacture battery cells and modules in the U.S. to date, according to John Zahurancik, Fluence's president of the Americas. In its second-quarter earnings call last week, the company reported a significant downward revision in its 2025 revenue forecasts, driven by decisions to 'pause U.S. projects under existing contracts' and 'defer entry into pending contracts until there exists better visibility and certainty on the tariff environment.' More delays are on their way, according to Ravi Manghani, senior director of strategic sourcing at Anza Renewables, a data analytics firm focused on solar and energy storage. Of the batteries bound for grid storage deployments in the U.S. in 2025, roughly half are 'at risk of getting delayed or renegotiated to make the economics work in 2026 and beyond,' he said. Some larger-scale projects scheduled to come online this year have likely already brought their batteries into the country, escaping the tariff premium, Manghani said. But many that are procuring batteries now for delivery from late 2025 to early 2026 'are indefinitely postponed until we get more clarity around where the tariffs end up, and what happens to non-Chinese manufacturing at large,' he said. Projects that are being built as part of state-regulated utilities' broader generation and grid plans may be able to absorb cost increases, he said. But 'merchant projects' that are operated by independent power producers in competitive energy markets are 'still figuring out if they can pencil out,' he said. In a Monday email, Manghani updated his view based on the latest news of a U.S.-China trade rapprochement. 'We will have to see if suppliers can actually ship out within this 90-day window,' he wrote. The determination of which countries end up having the most affordable battery components in the long run 'will depend not only on which countries have tariffs, but where the tariff percentages exactly land.' Trump's seesawing on tariffs 'just adds another layer of complexity for long-term investments,' Manghani added. Those dynamics could crimp the rapid pace of development in the competitive energy market of Texas, the country's grid energy storage leader. Stephanie Smith, chief operating officer at grid battery developer Eolian, said during the American Clean Power Association's April briefing that Texas has been well-served by its fleet of grid batteries, which have helped the state ride through summer heat waves while avoiding grid emergencies that have plagued it in the past. But it's going to be harder for Texas, and the rest of the country, to keep rapidly installing grid batteries in the face of rising prices for Chinese batteries. Eolian is scrambling to 'source as much outside of China as possible right now' to deal with the tariffs, Smith said. But 'obviously, there are some limitations on that.' Despite the uncertainty and rising prices, utilities and grid operators desperate to meet rising electricity demand have little choice but to build more batteries, said Gary Dorris, CEO and cofounder of clean energy-focused consultancy Ascend Analytics. That's because the alternative — new gas-fired power plants — takes much, much longer to build. Manufacturers of the turbines used in gas power plants are reporting up to four-year wait times for customers seeking to build power plants not already in the works, Dorris told Canary Media in an email. Solar panels and batteries, by contrast, can be ordered, shipped, and deployed in less than a year. While the specifics of Trump's tariffs matter — there is, after all, an enormous difference between 156% and 30% tariffs on China — at this point the hardest thing for manufacturers is 'the confusion surrounding' trade policy, Dorris said. Firms are asking, 'What are the goals? Will they stay in place? How will other countries react?' he said. 'This has created a lot of uncertainty, which suppresses appetite for making large, irreversible capital investment decisions.' This unpredictability, paired with the immediate price hikes on imported materials and equipment needed to build and expand factories, has hurt the U.S. manufacturers that the Trump administration's tariffs are ostensibly meant to help. These impacts are particularly dangerous for the still-nascent U.S. battery manufacturing sector. The American Clean Power Association is tracking 25 major projects to build or expand grid-scale energy storage factories in the U.S., of which 11 are in operation or under construction. Much of this manufacturing capacity is for battery modules, meaning it continues to rely on Chinese battery cells and materials. 'The domestic supply chain is unfortunately going to be at the receiving end of the tariff,' Manghani said. 'A lot of the raw materials that would go into domestic batteries, as well as the manufacturing equipment you need to build these cell factories, are still slated to come from China. We don't have a lot of alternatives yet.' That dependence on Chinese-made cells underscores just how vulnerable today's battery-manufacturing industry is to tariffs, Grumet said. Some domestic facilities are also starting to make those cells and refine and manufacture battery materials. Those include the facilities that Fluence has invested in that are making battery modules, cells, and associated equipment in Utah and Tennessee. It also includes Tesla's expanding cell-manufacturing capacity from its factories in Nevada and Texas, and its lithium-refining facility in Texas. Speaking at the American Clean Power Association's D.C. event, Michael Snyder, Tesla's vice president of energy and charging, highlighted the EV and grid battery manufacturer's advances in lithium iron phosphate cells. These cells are safer and easier to source materials for than nickel manganese cobalt cells and have become the favored technology for EV batteries and grid batteries alike. Today, Chinese companies make 99% of the world's lithium iron phosphate cells, according to Benchmark. 'We think we're going to be the first non-Chinese company making these cells at scale, and we know there are a lot of other companies working on that as well,' Snyder said. South Korea-based LG Energy Solution in February announced plans to invest $1.4 billion in U.S. lithium iron phosphate cell production for grid storage, which will take place at the firm's existing factory in Holland, Michigan. But those efforts are in their early stages, and they'll only succeed if they have customers to buy their products — a prospect made less certain by the chill settling in over grid battery deployment. The Trump administration's hostility to Biden-era climate policy and its broad support for fossil fuels is undermining investor confidence in the continued growth of U.S. grid battery markets, with consequences for the domestic manufacturing projects that would aim to supply them. The first three months of 2025 saw cancellations of billions of dollars in planned battery cell-manufacturing investment from Freyr Battery (now T1 Energy) in Georgia and Kore Power in Arizona. But the bigger threat to U.S. clean energy deployment and manufacturing is the possibility that Republicans in Congress will undo the tax credits created by the 2022 Inflation Reduction Act to benefit companies that build and deploy lithium-ion batteries and many other clean energy technologies. Republicans in Congress have pledged to extend tax cuts passed during the first Trump administration that will add trillions of dollars to the federal deficit, and they are hunting for federal spending cuts to make that possible. The estimated $780 billion in clean-energy tax credits is a tempting target. Some Republicans are arguing to keep the tax credits that undergird major investments in factories and power projects in their districts, while others have called for eliminating them completely. These incentives currently boost the economics for grid battery projects with a 30% base credit on the cost of the up-front investment, but developers can get more if the projects obtain a certain amount of materials from domestic suppliers or if they are built in 'energy communities' that face losses in jobs and economic activity due to closures of fossil fuel infrastructure. The tax credits have accelerated storage deployments — and boosted demand for batteries from U.S. manufacturers. But for battery manufacturers, the most vital piece of policy is the 45X Advanced Manufacturing Production tax credit. That credit is tied to every unit of battery module, cell, component, and material produced domestically, at a level designed to make them cost-competitive with Chinese products. 45X has been the primary spur for investors committing hundreds of billions of dollars to U.S. clean technology manufacturing. It's hard to see how those investors could keep their commitments if that support went away — and harder still to see how any new factories will be planned now, while the fate of that incentive is up in the air.
