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Tina Casey headshot

New Federal Climate Laws Are Bringing U.S. Manufacturing Back

By Tina Casey
Joe Biden stops at North Carolina semiconductor factory as part of Investing in America tour to promote U.S. manufacturing

U.S. President Joe Biden arrives at the Wolfspeed semiconductor manufacturing plant in Durham, North Carolina, for the kickoff of his “Investing in America” tour last month. (Image credit: Official White House Photo by Adam Schultz)

The Joe Biden administration fought tooth and nail to pass new laws that transform the carbon-heavy U.S. economy into a climate action hero. The results are beginning to show. Both the Inflation Reduction Act and the CHIPS and Science Act provide federal tax credits for manufacturers to onshore their operations in the U.S. Red states are benefitting from the renewed U.S. manufacturing boom as well as blue states, further undercutting the anti-ESG movement promoted by high-profile Republican office holders.

U.S. drops the ball on climate action

Ironically, the U.S. sparked the solar technology revolution back in the 1950s when the National Aeronautics and Space Administration (NASA) was searching for energy to power operations in orbit. The U.S. continued to dominate the global solar industry for decades.

Unfortunately, by the time former President Barack Obama took office in 2009, overseas manufacturers had caught up and raced ahead. In addition, the mainstream market for renewable energy was only beginning to take shape. The overall, installed (aka levelized) cost of solar panels and wind turbines remained high relative to fossil energy during President Obama’s time in office. Blowback against his Clean Power Plan and ongoing competition from overseas manufacturers provided two additional obstacles.

The clean power manufacturing situation worsened under former President Donald Trump. He took office as a strong supporter of fossil energy and pulled the U.S. out of the 2015 Paris Agreement on climate change. Though he talked a big game about bringing back U.S. manufacturing jobs, he disengaged with the job-creating, global decarbonization movement. His U.S. manufacturing policy was failing long before the COVID-19 pandemic struck in March of 2020.

The Biden administration picks up the ball and runs with it, spurring billions in U.S. manufacturing commitments 

The new Biden-supported legislation provide a sharp contrast in both policy and circumstances. In addition to substantial tax breaks, the Biden administration is benefitting from the continuation of Obama-era initiatives that fostered a drop in the cost of renewable energy hardware while addressing obstacles in the “soft” area of costs related to inspections, permits, marketing and other administrative areas. Leading U.S. corporations also continued to raise the demand for renewable energy by leveraging their buying power throughout the Trump administration.

The results have been striking. On Jan. 11, for example, the South Korean Firm Hanwha Solutions Corp. announced a $2.5 billion plan to construct a solar manufacturing campus in Georgia. The soup-to-nuts campus will include facilities to manufacture solar ingots, wafers, cells and modules.

That’s just one example. Last week, the Financial Times credited the Biden administration with attracting new corporate manufacturing commitments totaling more than $200 billion since the Infrastructure and CHIPS bills passed last year. “The investment in semiconductor and clean tech investments is almost double the commitments made in the same sectors in the whole of 2021, and nearly 20 times the amount in 2019,” reported Amanda Chu and Oliver Roeder of the Financial Times, citing data the paper compiled on U.S. manufacturing deals.

“While the FT identified four projects worth at least $1 billion each in these sectors in 2019, there were 31 of that size after August 2022,” they added. The Financial Times also took note of 75 other new clean tech manufacturing projects in the U.S. of $100 million or more.

Who’s afraid of the ESG?

Chu and Roeder of the Times concluded by observing that additional guidance on the tax credits is forthcoming from the Biden administration, leading to the announcement of even more projects in the near future.

Red states are already jostling with blue states for a share of the action, regardless of state-level Republican officials who have been railing against "woke" capitalism and ESG (environmental, social and governance) factors being used in investing. The anti-ESG movement purports to protect public pension funds, but it is nothing more than a thinly disguised effort to protect fossil energy stakeholders. 

Georgia is a case in point. The Republican-led state never enacted a renewable energy portfolio standard or even set voluntary renewable energy targets. It has lagged behind other states in terms of increasing access to renewable energy within its borders. However, Georgia policymakers seem to have no problem with enticing clean energy industries to set up shop in the Peach State.

Hanwha company Qcells opened its first solar panel factory in Dalton, Georgia, in 2019. That put the state on the map as host to the largest factory of its kind in the Western Hemisphere, and Republican Gov. Brian Kemp has been effusive in his praise for the company’s decision to add another $2.5 billion to the state’s economy.

“Qcells will build a new facility in Cartersville and add a third facility to its Dalton location, creating more than 2,500 new jobs in northwest Georgia. These investments are expected to bring Qcells' total solar panel production capacity in Georgia to 8.4 gigawatts by 2024,” the governor’s office reported in January.

"With a focus on innovation and technology, Georgia continues to set itself apart as the No. 1 state for business,” Gov. Kemp stated. “Georgia provides a business-friendly environment that means jobs for hardworking Georgians in every corner of the state and success for both existing and new companies. We're excited for Qcells' continued success in the Peach State."

Those “business-friendly” words are at odds with Kemp’s support for anti-LGBTQ legislation, but the point has been made. Georgia and other red states don’t care if their new Biden-enabled, home-grown industries export technologies that shrink the fossil energy profile of the US. Regardless of their political posturing, they just want the jobs.  

Tina Casey headshot

Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes.

Read more stories by Tina Casey