Green power surges in the US

Over 100,000 new jobs and 334 major renewable energy projects are the results of the Inflation Reduction Act (IRA), according to a new report. 

It has been about two years since the IRA was made into law. A recent report by E2, an industry consulting firm, documents the IRA legislation effect on the renewable energy industry and society in general. 

The E2 report suggests that every dollar of public funding spent by the IRA has generated nearly $3 in private investment.

A separate report by the Massachusetts Institute of Technology (MIT) indicates the benefit was close to $5 or more of private investment for every $1 of public funds spent. 

The largest recipients of this money from the IRA are Michigan, followed by Georgia, South Carolina, Texas, North Carolina, Ohio and Tennessee. 

Republican hypocrisy regarding renewables

According to the report, about 60 percent of all of the public funds benefited red (Republican) districts. Eighty-five percent of all private Investments have gone to congressional districts that are held by Republicans – although not a single Republican voted for the IRA. 

There has been a movement among a number of GOP legislators to try and repeal the IRA. However a group of 18 Republican Congressmen sent a letter to house Speaker Mike Johnson asking him to preserve the Act. 

In a letter to Speaker Johnson, they said, “prematurely repealing energy tax credits, particularly those used to justify Investments for projects that have already broken ground, would undermine private investment and stop development that is already ongoing. A full repeal would create a worst case scenario where we would have spent billions of taxpayer dollars and would receive next to nothing in return.”

Solar cell imports and production

Last week, President Biden more than doubled the amount of solar cells that can be imported into the United States without incurring tariffs. He raised the limit from five gigawatts to 12½ gigawatts (GW). 

These tariffs were put in place in 2018, originally setting the limitation at about 2½ GW but that was exceeded. The Biden Administration increased it to 5 GW and in June 2024 the imports exceeded the 5 GW threshold so they raised it to 12½ gigawatts. 

The justification for this is this: the IRA and its provisions for domestic manufacturing increased domestic production of solar modules dramatically – but solar cell production has not kept up. Solar cells are required in order to make the modules. They're trying to increase the import of cells so that it will support the domestic module manufacturing process. 

China manufactures 80 percent of the world's solar cells.

Roughly 78 GW of US manufacturing capacity have been announced to come online by 2027, the result of IRA provisions. This increases capacity sevenfold from the time prior to the IRA. 

However, Clean Energy Associates, an industry consulting group, projects that about 40 GW of manufacturing capacity will actually come online, about 7 GW less than what will be needed for domestic installations. With this shortfall they're projecting only about half of those projects that have been announced will actually come to fruition.

Renewable surpassing coal

The US wind industry hit record generation in April, surpassing coal as the second leading fuel for generating electricity. Currently wind is exceeded only by natural gas. Wind installed capacity grew from 2.4 GW in 2000 to over 150 GW in April 2024. 

Coal generation during that same time period fell from 315 GW capacity of generation to about 177 GW. 

Renewable energy, including wind, solar and hydro, surpass coal as the second largest source of electricity in 2020. This year wind and solar without hydro is expected to exceed coal as the second largest generating source. 

There's a lot of competition entering into the energy storage market. This is one of the fastest growing sectors within the industry and it is about to become a bit more competitive. In 2022, there were five firms that controlled approximately 62 percent of all global manufacturing capacity of battery energy storage systems (BESS). In 2023, those company shares fell from 62 percent down to 47 percent. 

Of the top 10 vendors, six are Chinese firms. China actually installed most of the BESS systems of any nation globally in 2023. Tesla overtook industry leader Sungrow to take the number one position with about a 15 percent market share. Chinese firm Sungrow is now the second largest producer of BESS systems, followed by the Chinese state-owned organization the CRRC and US manufacturer Fluence is following in fourth place and Chinese manufacturer Hyperstrong in fifth place.