$28 Billion In New Clean Energy Manufacturing Investments Announced Since Inflation Reduction Act Passed

Energy $28 Billion In New Clean Energy Manufacturing Investments Announced Since Inflation Reduction Act Passed Energy Innovation: Policy and Technology Contributor Opinions expressed by Forbes Contributors are their own. We are a nonpartisan climate policy think tank helping policymakers make informed energy policy choices and accelerate clean energy by supporting the policies that most effectively reduce greenhouse gas emissions. Silvio Marcacci Contributor Opinions expressed by Forbes Contributors are their own.

Communications Director Oct 10, 2022, 07:15am EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin The Inflation Reduction Act is the most important climate legislation in United States history , but will it actually generate private investment in new manufacturing? In a word, absolutely. Roughly $28 billion in new manufacturing investment has been announced in the weeks following the IRA’s signing. These investments have primarily happened in the electric vehicle, battery, and solar manufacturing sectors – but the trend is just getting started.

The economic upside is massive. Energy Innovation modeling projects the IRA will increase GDP nearly 1% in 2030, and the Blue Green Alliance predicts it could add 9 million jobs in the next ten years. But securing the IRA’s full economic development potential hinges upon state and utility implementation.

The legislation could become America’s most significant investment in clean manufacturing and build a 21 st century economy by leveraging tax dollars to generate roughly $1. 7 trillion in new investment within a decade, according to Credit Suisse . Side view of a female employee inspecting newly manufactured solar panels in company.

Woman quality . . .

[+] engineer examining solar panels in factory. getty Solar investments shining bright The IRA’s clean energy tax credits completely change the economics of electricity generation in the U. S.

, using long-term policy to efficiently leverage government funds to accelerate renewable energy and battery storage deployment for utilities and corporations. Recommended For You 1 Juan Soto Contract Rejection Could Make Orioles A Better Buy Than Nationals More stories like this Fewer stories like this 2 An Excellent ‘Star Fleet’ Exhibition Is Currently Underway In Tokyo More stories like this Fewer stories like this 3 16 Helpful Ways Company Leaders Can Support Their Tech Leader And Team More stories like this Fewer stories like this Renewable energy manufacturing investments are just starting, but the first announcements are a harbinger of things to come. Woods Mackenzie forecasts renewable energy investments will total $1.

2 trillion by 2035, substantially more than without the IRA, and solar energy investment will be two-thirds higher because of the law. Two of the largest U. S.

solar manufacturers have already increased their investments. FirstSolar announced it will spend $1. 2 billion to build a new solar panel manufacturing plant, its fourth in the U.

S. , and expand three existing Ohio plants. The manufacturing investments will create nearly 1,000 new jobs.

“In passing the Inflation Reduction Act of 2022, Congress and the Biden-Harris Administration has entrusted our industry with the responsibility of enabling America’s clean energy future and we must meet the moment in a manner that is both timely and sustainable,” said FirstSolar CEO Mark Widmar. ” We continue to evaluate further investments in incremental capacity and could announce further expansion plans in the future. ” And in the Southeast U.

S. , REC Silicon announced an agreement with Mississippi Solar to develop a low-carbon U. S.

-based solar supply chain from raw materials to fully assembled modules, noting “passage of the Inflation Reduction Act which includes SEMA (Solar Energy Manufacturing for America) legislation will drive increases in the U. S. production of polysilicon and metallurgical grade silicon.

” U. S. clean energy factor expansion since IRA John Smillie Electric vehicle manufacturers accelerate investments While almost every U.

S. automaker has announced EV model expansions, the future of consumer uptake was uncertain due to several popular EV automakers reaching the 200,000-vehicle cap on federal EV tax credit eligibility, with several more expected to reach that point as soon as 2023. Even though most EVs are cheaper than internal combustion engines on a monthly basis from the day they’re purchased, those economics depend upon the federal EV tax credit, and without them consumers may not choose to drive electric over fossil fuels.

The IRA removes that roadblock by extending the credit for ten years and lifting the manufacturer cap. While the IRS incentives are expected to modestly increase passenger EV sales, adding the new commercial EV incentives could have a powerful impact on that portion of the market. Automakers are already responding.

HAMTRAMCK, MI – OCTOBER 11: Chevy Volt electric vehicles and Opel Amperas go through assembly at the . . .

[+] General Motors Detroit Hamtramck Assembly Plant October 11, 2011 in Hamtramck, Michigan. Officials from the White House Council on Environmental Quality and the National Highway Traffic Safety Administration toured the plant today to highlight the Obama administrations fuel economy standards. (Photo by Bill Pugliano/Getty Images) Getty Images GM will invest $760 million at its existing Toledo Propulsion Systems plant to expand manufacturing to make drive units for planned EV models – the automaker’s first U.

S. EV-only powertrain or propulsion facility. It also recently said it will invest $491 million at an existing Indiana stamping plant to make various parts for future vehicles.

Foreign automakers are also focusing on the U. S. Kia announced it will shift some of its EV assembly to the U.

S. by 2024 to qualify for IRA incentives. Kia currently holds the second largest market share for U.

S. EVs, but only manufactures them in South Korea. EV investments are also expanding beyond just cars and trucks.

ABB ABB announced it will build a new EV charger manufacturing facility in South Carolina, capable of building up to 10,000 chargers per year targeting electric school bus and fleet charging, and creating more than 100 jobs. Battery manufacturers supercharge their U. S.

facilities But even with new EVs made in America, powering those vehicles on the road is another issue. Battery manufacturing and the associated supply chain is largely concentrated in other countries. Designing incentives to gradually require more and more domestic content alongside the IRA’s battery production tax credit will accelerate investments from domestic and international sources eager to power EVs in the world’s second largest auto market.

North American battery manufacturing capacity BloombergNEF/Evelina Stoikou Battery manufacturing investment announcements have quickly surged ahead. Honda and LG Energy Solutions announced a joint venture to build a $4. 4 billion battery factory in Ohio where Honda’s main U.

S. factory is located, aiming for 40 gigawatt-hours annual production capacity – enough to power more than 700,000 vehicles according to the companies. LG’s joint venture with Honda is part of its roughly $10 billion investment plan to open four new battery manufacturing plants in North America by 2025 to capture IRA-fueled consumer demand for EVs.

Panasonic, which supplies batteries to Tesla, is in discussions to build a new $4 billion battery plant in the U. S. , potentially in Oklahoma.

Panasonic already jointly operates a battery factor in Nevada with Tesla, and the new plant is being described as a “twin” plant with another $4 billion EV battery factory Panasonic announced in July for Kansas which could create up to 4,000 direct jobs. Toyota announced it will more than double a planned EV battery plant in North Carolina, adding $2. 5 billion in new investment to a previously announced $1.

3 billion plant construction project. The larger plant, which will total $3. 8 billion in investment, will create 2,100 new jobs.

Michigan will be home to two new battery manufacturing plants. Local startup Our Next Energy is planning a $1. 6 billion cell manufacturing facility that will eventually employ 2,100 people.

And Gotion Inc, the U. S. subsidiary of Chinese EV battery manufacturer Guoxuan High-Tech Co.

, is planning to develop a $3. 6 billion manufacturing plant in the state which will create 2,000 new jobs. That’s notable since Chinese companies control most of the world’s battery manufacturing.

U. S. -based companies are also expanding.

Mining company Piedmont Lithium announced a $600 million lithium processing and manufacturing plant for EV batteries, citing a need to reduce U. S. dependence on Chinese suppliers, creating 120 new jobs, and crediting recent legislation incentivizing the use of domestically sourced critical materials and providing tax credits for U.

S. producers. EV battery recycler Cirba Solutions announced a $200 million expansion of its existing Ohio facility and a new battery recycling facility in Arizona which will create 185 jobs, both part of the company’s plan to expand battery recycling 600%.

And not to be overlooked, Germany-based Bosch announced it will invest $200 million to expand existing South Carolina facilities to produce hydrogen fuel cell stacks to power electric heavy-duty vehicles, creating at least 350 new jobs along the way. IRA investments a starting gun in a race to the top While the true economic impact of the IRA won’t be known for years, or even decades, the early returns are impressive to say the least. In the words of Credit Suisse analysts, the IRA “definitively changes the narrative from risk mitigation to opportunity capture” for corporations.

$28 billion in new investment, in just a few weeks, could be the starting gun in a race to the top for corporations seeking to capture the massive market for clean energy technologies created by the IRA’s down payment. Energy Innovation: Policy and Technology Silvio Marcacci Editorial Standards Print Reprints & Permissions.