The Inflation Reduction Act devotes a historic amount of $369 billion to support energy and climate initiatives, such as expanding domestic manufacturing capacity. This includes an estimated amount30 billions of dollars in production tax credits aimed at accelerating U.S. manufacturing of batteries, solar panels, wind turbines and other clean energy technologies, plus tens of billions more in tax credits tax and investment loans.
Since the legislation was passed in August, a number of companies have announced major initiatives to expand renewable energy manufacturing in the United States. But how much of that is directly attributable to the Inflation Reduction Act?
It’s hard to quote most of those announcements and say with certainty that they were based on the major legislative package, said Harry Godfrey, chief executive of the Advanced Energy Economy trade group. “Making a decision about building a new facility or even expanding a facility does not happen overnight. »
But, Godfrey added, there was pent-up demand in the renewable energy market, and the Cut Inflation Act opened the floodgates. “This increases the scale of peak energy dollars and investments.
The law, according to Godfrey, will help reduce costs throughout the supply chain, from critical minerals to assembling the final product. Before, “there was no attractive side to the equation. Now, alongside tax breaks, he said, companies know there will be demand from domestic buyers all along the supply chain.
“It’s an incredibly optimistic environment. Everyone is bubbling with excitement,” said Michelle Davis, senior analyst at research firm Wood Mackenzie. The clean energy elements of the now defunct Build Back Better Bill were largely passed in the same form under the Cut Inflation Act, and the series of recent announcements are the result, she said.
Davis and Godfrey think more announcements are on the horizon. “There are a lot of companies that intend to make new investments because of these incentives,” Davis said. “I think we can look back in a year or two and say, ‘The IRA catalyzed this further development in many other projects.
Here are six companies that have announced plans to increase renewable energy generation in the United States since the bill was passed.
1. First Solar
In August, First Solar, the largest solar panel maker in the United States, announced plans to dramatically increase domestic production. This includes a $1 billion of investments in a new 3.5-gigawatt solar module in its Southeast factory, as well as a $185 million upgrade 0.9 gigawatts at its plant in Ohio. In total, the company expects to have a solar panel production capacity of ten gigawatts per year per 2025.
“By passing the Inflation Reduction Act of 2022Congress and the Biden-Harris administration [have] has entrusted our industry with the responsibility of enabling America’s clean energy future and we must respond to this moment in a way that is both timely and sustainable,” said CEO Mark Widmar, in a press release.
2. You’re here
Electric-vehicle maker Tesla could stall plans to make batteries in Germany, says The Wall Street Journal. The company has not made an official announcement, but is said to be discussing moving equipment for the production of battery cells originally intended for its German plant to the United States.
The Inflation Reduction Act stipulates that electric vehicles eligible for tax credits must be assembled in North America and have batteries made from components and materials largely sourced from the United States. Batteries from countries with which the United States has a trade agreement are also eligible. In particular, the law excludes battery materials from “foreign entities of concern,” potentially including China, which supplies most of the world’s lithium-ion battery cells and processed materials.