An optimistic view of clean energy post-election
There are plenty of acute threats for the industry. But the IRA has changed the federal policy environment.
A semiconductor megafactory under construction in Arizona (Photo credit: Wirestock Creators / Shutterstock)
A semiconductor megafactory under construction in Arizona (Photo credit: Wirestock Creators / Shutterstock)
This election day, I can’t get a statistic out of my head: 39%.
That’s how many voters say they’ve heard about the Inflation Reduction Act, a law that has supported nearly 300 factories, tens of thousands of jobs, and leveraged hundreds of billions of dollars in domestic clean energy investment over the last two years.
A majority of those manufacturing investments in batteries, electric vehicles, solar, wind, and other components are headed to red states, in communities that have suffered most from Chinese competition.
And yet, the IRA is barely an election story. Even Vice President Kamala Harris, who cast the tie-breaking vote to pass the IRA in 2022, hasn’t made it a major part of her campaign.
But there’s a positive story buried in the IRA polling — one that could influence the policy trajectory for clean energy, even under a second Trump administration.
That survey, conducted by Yale and George Mason University, found that after reading a description of the law, 94% of moderate Democrats and 70% of moderate Republicans said they supported it.
Of course, Harris and Trump could not be more different on this issue. Harris has made domestic clean energy a pillar of her economic plan, while Trump continues to call renewables and EVs a “scam.” He has promised to claw back unspent IRA funding — even though his supporters have long told pollsters they want more government spending on clean energy.
The former president’s disdain for clean energy has not changed in eight years. But the political environment around him has evolved considerably.
Republican politicians continue to moderate their messaging about the IRA, and Tanya Das, director of the energy program at the Bipartisan Policy Center, said there has been a “huge shift” in the energy policy conversation more broadly.
“I think I'm a lot more optimistic than most people when it comes to what the future will hold for energy and climate policy,” Das told me in an interview at the Mintz Energy Transition Summit, when I asked her about possible policy outcomes of the election.
Republicans, like their constituents, warm to the IRA the more they hear about it, she explained: “Republicans are hearing a lot from businesses who are investing in their districts about how they are seeing the benefits.”
I also spoke with Christina Baworowsky, vice president of policy and advocacy at Citizens for Responsible Energy Solutions, a Republican think tank focused on clean energy policy. She sees a similar shift underway.
“I think this is kind of one of those areas politically [where] there's no clear line in the sand,” Baworowsky said.
Das and Baworowsky walked me through possible outcomes after the election. There’s plenty of risk for companies ahead, they acknowledged — but there are also lots of areas of legislative compromise.
Here are some of the highlights on the IRA, areas of common ground, and shifts of the policy landscape. Our conversations have been edited for brevity and clarity.
What could happen with the IRA?
Tanya Das: We know there's definitely going to be a tax discussion in Congress next year. Several provisions are going to expire next year.
Some have said that they think [repealing] the IRA is going to pay for that bill, but the IRA would just be a very small percentage of the cost of that bill. So from a pure numbers perspective, I'm skeptical. But I think Republicans are hearing a lot from businesses who are investing in their districts about how they are seeing the benefits of the IRA and how those tax credits are really a lot of the reason why they're making investments in their districts. And so I think we're going to see some continuation of the IRA, [even in the case of a Republican sweep].
We've heard this phrase ‘scalpel, not sledgehammer,’ — scalpel being let's make tweaks, let's make adjustments, let's improve the tax credits to make it function better instead of ‘let's just completely dismantle it.’ We've heard the Speaker of the House use that phrase. So I'm pretty optimistic that we're going to land in a good spot.
Christina Baworowsky: You're never going to get a Republican sweep where you get a supermajority in the Senate. And I think that's fundamentally important for everyday Americans to understand, because it decreases your ability to append macro legislation.
Now that doesn't mean you can't do mischief. So where are the areas for mischief? Well, things that require executive orders or administrative types of deference, like how you actually implement the Inflation Reduction Act and all of these tax credits.
If you don't have a check in hand on January 1st, you should really wonder whether or not you're ever going to get a check in hand. But that being said, I see a lot of litigation happening. There’s ways that industry can potentially force their hand a little bit, but it will be a timely and costly process if they want to do that.
Now, I see legislatively some areas for mischief when we look at the Tax Cuts and Jobs Act, because Congress is going to have to negotiate a macro package. I see a world where consumer tax credits — for example, the 30C or 30D tax credit — would be very difficult to protect. They'll probably be able to protect the bigger pieces like 45X, 45E, 45Q, 45Y because when I start looking at those 78% of districts where IRA money is going, they're helping Republicans.
In the Garbarino letter [from conservative lawmakers to the Speaker of the House supporting tax credits], so many of those signatures were from places in Middle America, and from conservatives that traditionally would not be upfront about this. But for them it's about jobs — it's real jobs in their district, and it's the economic well-being of companies who have invested billions of dollars.
You'll probably be able to protect a lot of it, but a couple of those might fall off because you'll have other tax provisions that are going to be more important for members, and they can only use so much political capital at the end of the day.
Areas of bipartisan support
Tanya Das: I'll flag two major things. So one, supply chains and manufacturing. We are seeing the conversation start with critical minerals. There's a lot of recognition on both sides of the aisle that critical minerals are an essential input for a lot of our technologies in the energy sector and that we need secure supply chains. And so we've been seeing members of Congress talk about implementing some kind of reserve of minerals, and we at the BPC have been focusing on what that could look like — providing price support for minerals to have stable and secure markets to make it attractive for investors to invest in domestic critical minerals processing projects.
I think that's going to grow into a broader set of policy discussions around manufacturing. We've already seen a lot of investments in batteries and EVs in the U.S., but I think that's going to expand to other types of clean energy technologies.
And the other issue I'll flag is AI and energy from all angles. I think there's a ton of interest in using AI to accelerate energy innovation, and a ton of interest in using AI to speed up permitting and assist with grid operations and power management, in addition to the load growth issue.
Members of Congress on both sides of the aisle are very interested in tackling this set of issues, and I think we're going to see more going into next year.
Christina Baworowsky: I think both sides of the aisle are starting to realize that the United States is falling behind the world in our ability to domestically mine, process, and refine minerals and use them for technologies of the future. I see that as an area of a bipartisan compromise.
You have Senator [Catherine] Cortez Masto in the Senate being a pretty big champion about reforms to unlock items like lithium on federal lands. You have the Louisiana delegation championing offshore wind. Why? Because it helps diversify offshore oil and gas jobs and gives their constituents a second potential livelihood via offshore wind deployments. You have people in Texas excited about geothermal technology because it's drilling. It's these traditional resources that, due to innovation and technologies, have now garnered support with audiences that maybe five years ago would've been like, ‘Oh, no, that's cleantech. I'm an oil and gas kind of guy.’
So I see permitting being a great area, offshore wind being a great area, geothermal being a great area, in addition to things like nuclear.
The shifting policy landscape
Tanya Das: Broadly, I think I'm a lot more optimistic than most people when it comes to what the future will hold for energy and climate policy. In the time that I've been working in DC on energy and climate policy, I have seen a huge shift in the conversation where, when we started, there were members of Congress who were not shy about being climate deniers. And today that's no longer the case.
By and large, the Republican Party is full of members of Congress who very much believe climate change is happening and is happening for reasons caused by humans. And now our set of discussions are around how do we solve the issue; and the places where there's disagreement is, how do we move forward and how do we address this issue?
We also have a case where businesses are really leading the way right now. Businesses are the ones who are building renewable energy projects and other clean firm energy projects, and they want policy certainty from the government right now. They want long-term signals on what's going to happen with tax credits and what's going to happen with financing available. And a lot of the investments that those businesses are making on the manufacturing side as well as on the deployment side are happening in red states. And so I am fairly optimistic that regardless of what happens with the election in November, that there’s really strong incentives on both sides of the aisle.
Christina Baworowsky: Fundamentally, Republicans and Democrats understand that the status quo isn't livable. What they'll disagree on is how to fix it.
When you're elected to Congress, you still have to govern. So how do you get enough votes in order to make meaningful, tangible progress on some of these very pressing issues? The answer is unlikely bedfellows. It's finding people who will work with you on very serious policy discussions and then getting a big enough coalition of stakeholders, both in Congress, but also with industry to kind of push forward these macro fixes.
Yes, Republicans don't deny climate on television to the same degree that they used to, but there are Democrats now who also go out and say they oppose permitting reforms that help clean energy projects.
And so I think this is one of those areas that there's no clear line in the sand on what either party really believes in, because it's a little bit more opaque. Both extremes are no longer winning the reality game. I feel optimistic about progress because I think that there is a lot of middle ground.
