Disincentivizing Solar, Battery Sectors In US Can Cost Billions: Report

Disincentivizing Solar, Battery Sectors In US Can Cost Billions: Report

A special report from Net Zero Industrial Policy Lab said that the elevation of Donald Trump as the new President of the United States (US) may affect the solar and battery manufacturing sectors. The report said that disincentivising US solar and battery manufacturing could cost billions and open new supply chain markets for the competitors.

The report said that the Biden Administration’s investments in climate leadership across the  CHIPS Act, the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) have shifted the landscape of US and global clean energy supply Chains.

“The US election results —a trifecta with a Trump administration, a Republican-held Senate and a Republican-held House—point towards increased trade protectionism, removal of environmental regulations, and fossil fuel handouts. Yet the irony today is that a repeal of the climate portions of IRA, BIL, and CHIPS would harm the United States and create tens of billions of dollars in opportunities for other countries. These laws give the US a foothold in the clean technology race,” the report said.

The report said that its scenario analysis shows that a US repeal of the IRA would, in the most likely scenario, harm US manufacturing and trade. “The nation would forego significant factory investment, meaning it would also lose jobs, tax revenues, exports, and more. These lost factories and jobs will create $80 billion in investment opportunities for other countries, including US competitors like China as well as allies such as the EU, Japan and Korea,” it said.

“In this study, we quantify both export loss and opportunity cost to US business: an IRA repeal could also cost the US $50 billion in annual export revenues, worsening the US trade balance. The cancellation of US projects would create an $80 billion investment opportunity for other countries, creating new factories, jobs, and tax revenue in those countries, by 2030,” it added.