Repeal the IRA? Most clean energy companies would prefer you didn’t

Clean energy companies say the federal Inflation Reduction Act (IRA) has improved their businesses, and that repealing or rolling back the landmark climate and clean energy law would result in considerable losses, layoffs, and closures, according to a “first-of-its-kind” survey of more than 900 businesses. 

The survey comes as a new analysis on the IRA’s impact finds large-scale clean energy projects announced in the first two years of the law will support over 600,000 jobs, generate hundreds of billions of dollars in new wages, tax revenues, and economic growth, and continue producing tens of billions more in economic benefits each year after they open. 

Conducted by BW Research Partnership for the national nonpartisan business group E2 and partners Chambers for Innovation and Clean Energy (CICE) and the Clean Energy Leadership Institute (CELI), the nationwide poll of clean energy business owners found:

• 85 percent of respondents said the IRA was “very important” or “somewhat important” to the growth of their companies. 
• The majority of respondents (53%) said they would lose business or revenue as a direct result of an IRA repeal.
• About 21% of respondents said they would have to lay off workers if the IRA is repealed, with 13% of firms saying they would have to lay off at least 25 workers
•  About 13% of firms said they would have to freeze wages or rescind offers to prospective employees
• About 11% of firms said they would close their business entirely, while 9% said they would have to relocate to another country.
• Rural America, which has seen the largest influx of clean energy and clean vehicle projects spurred by the IRA, would suffer the most from a repeal of the law. 

The survey was conducted in August concurrent with the second anniversary of the landmark climate and clean energy law, and was released in conjunction with a new economic analysis by E2 and BW Research modeling how far the economic benefits from the policy extend.

According to that separate report, Clean Economy Works: An Economic Impact Analysis of Major Clean Energy Projects Announced In Year Two of the Inflation Reduction Act, the nearly 340 large-scale projects announced by companies in the first two years after the IRA are expected to:

• Create or support 467,000 jobs during the construction phase and 154,000 jobs after the projects are up and running;
• Add $238 billion to U.S. GDP during construction and $20 billion annually to the GDP over their operational lifetime;
• Generate $50 billion in federal, state, and local tax revenues during the construction phase and another $4 billion annually after they’re up and running; and
• Pay $169 billion in wages during construction and another $12 billion annually during their operational lifetime

The analysis also includes information on jobs, tax revenues, wages, and overall economic impacts for projects announced in rural counties and the 82 projects announced in the three states benefitting most from the projects announced since the IRA – Michigan, Georgia, and North Carolina.

“The impacts of this landmark policy are now crystal clear – as are the consequences if it’s repealed or rolled back,” said Bob Keefe, executive director of E2. We now know the IRA is driving the creation of hundreds of thousands of jobs and generating billions in new wages and tax revenues for workers and communities in parts of our country that need it the most. And we now also know that if it goes away, businesses will lose money, workers will lose jobs and our economy will lose steam.”

In addition to the survey of stakeholders at 930 companies, BW Research conducted interviews with executives across the clean energy, electric vehicle, and energy efficiency industries. Those interviews showed that the IRA has had a “major” role in reducing the risk of developing clean energy projects; driving innovation, and fostering market competition, BW Research said. Repealing the law would dramatically weaken investor confidence, increase project timelines, and set back emerging technologies, the interviewed executives said.

In August, the U.S. Department of the Treasury released new data from the IRS and a fresh analysis by the Office of Economic Policy demonstrating that more than 3.4 million American families benefitted from $8.4 billion in Inflation Reduction Act tax credits in 2023. The announcement marked the first public release of data from 2023 tax filings showing the benefit of the IRA’s clean energy tax incentives for consumers. It indicated the number of families taking advantage of the credits increased by almost one-third compared to the tax year 2021. The aggregate value of the credits increased by nearly two-thirds.

The Inflation Reduction Act is quickly becoming a focal point in the United States’ impending presidential election, despite its apparent impact. There are fears a second Donald Trump presidency will unwind many of the benefits of the legislation. Those sentiments were echoed in a letter addressed to House Speaker Mike Johnson, signed by 18 Republican members of Congress urging him not to repeal the IRA.

Democratic Vice Presidential candidate Tim Walz has been a consistent advocate of clean energy, as demonstrated over the course of his two terms as Minnesota Governor. In February of last year, Walz signed one of the strongest green energy bills in the country, requiring his state to entirely eliminate carbon from its electricity generation by 2040. The only states with the same timeline are Michigan, Connecticut, New York, and Oregon; Rhode Island wants to get to 100% renewables by 2033.

The Republican choice for Vice President, Ohio Senator J.D. Vance, has taken an opposite stance. According to Politico, Vance has championed fracking and spoken out against clean energy since he was elected in a campaign partially funded by fossil fuel companies. Watchdog OpenSecrets indicates the oil and gas lobby has donated more than $340,000 to Vance’s campaigns since 2019.