The United States is experiencing the largest-ever boom in investment in clean energy production, driven by laws corresponding to the bipartisan bill Act on infrastructure investments and employment and Act on reducing inflation.
They have these rights used billions of dollars government support to drive private sector investment in clean energy supply chains across the country.
For several years, one of us, Jay Turner, and his students at Wellesley College have been tracking clean energy investments in the U.S. and sharing the data on the website The big green machine website. This study shows that since the Inflation Control Act went into effect in 2022, firms have announced 225 projects with a complete investment of $127 billion and the creation of greater than 131,000 recent jobs.
You can have seen on the news that these projects are in danger of failure or significant delays. In August 2024, the Financial Times reported this. 40% of over 100 projects he assessed that they were delayed. These include battery production, renewable energy and metals and hydrogen projects, in addition to semiconductor manufacturing plants. The technology industry magazine The Information recently warned of this 1 in 4 firms left from government subsidies for investment in batteries.
We checked all 23 battery cell factories announced or prolonged since the Inflation Reduction Act was signed into law – just about all of them are gigafactories that are expected to supply greater than 1 gigawatt-hour of battery cell capability. These factories have one of the highest employment potentials of all the projects supported by the Act.
We wanted to search out out whether the U.S. clean energy production boom was about to fizzle out. Most of what we learned is reassuring.
The largest battery factories are on the right track
While exact investment amounts are difficult to find out, our study shows that planned capital expenditure will likely be $52 billion, which would supply 490 gigawatt-hours of battery production capability per yr – enough to place about 5 million recent electric vehicles on the road.
While not all 23 firms have announced hiring plans, the facilities are expected to create nearly 30,000 recent jobs, with projects primarily in the U.S. Southeast, Midwest and Southwest.
We desired to know whether these projects were progressing as planned or whether there have been delays or problems.
To do that, we first contacted local and state economic development agencies. In many cases, local and state tax incentives support these projects. Where possible, we’ve got tried to substantiate the status of the project through public data Or formal announcements. In other cases, we looked for messages to see in the event that they existed construction proof Or hiring.
Our study shows that 13 of 23 projects are on track, with total planned capital investment exceeding $40 billion and production capability of nearly 352 gigawatt hours per yr. Importantly, they include most of the largest projects with the largest investments and expected production.
Our calculations show that 77% of total planned capital investment, 79% of proposed jobs, and 72% of planned battery production are on track, meaning the project is more likely to be accomplished roughly on time and overall as expected. result. level of investment and employment.
Three projects are on the bubble. These have shown progress but have experienced delays in construction or financing.
Five others show deeper signs of distress. We do not yet have enough information to attract conclusions about the two projects.
An example of an ongoing project is the Envision AESC battery plant in Florence, South Carolina. His the scale has been enlarged twice because it was first announced in December 2022. It is now a $3 billion investment with the goal of producing 30 gigawatt-hours of batteries per yr supplies the BMW factory in Woodruff, South Carolina.
In early October 2024, South Carolina Secretary of Commerce Harry Lightsey visited the Envision i facility published a video. Construction of the plant began in February 2024, and 850 employees are working six days every week to finish the 1.4 million square foot facility by August 2025. Once full production begins, the project will likely be accomplished expected to rent 2,700 people.
The 2024 elections could end or speed up the boom
However, much depends on what’s going to occur in the upcoming elections.
Our data suggests that the real risk facing these projects and projects like them is not sluggish demand for electric vehicles, as some suggest – in fact demand continues to grow. It’s not the local opposition that did it either it only slowed down just a few projects.
The the biggest risk is policy change. Many of these projects are counting on advanced manufacturing tax credits approved by the Inflation Reduction Act through 2032.
During the campaign, Republicans are promising to repeal key laws under Biden, including the Inflation Reduction Act, which incorporates funding for grants and loans to support clean energy, in addition to tax incentives to support domestic manufacturing.
While an entire repeal of the Act could also be unlikely, an an administration hostile to scrub energy redirect unspent funds to other purposes, slow the pace of grants or loans by slow project approvals, or find other ways to make tax incentives tougher to acquire. Although our research focused on the battery industry, concerns concern investments in wind energy AND solar energy too.
So will the great U.S. boom in clean energy production soon come to an end? Our data is optimistic, but the policy is uncertain.