Solar, EV firms say Republicans’ debt limit a ‘stunt’ that could cost jobs

Solar and EV industries worry that a Republican plan to cut federal spending in exchange for a debt ceiling increase might cripple the tax incentives that spurred billions of dollars in green investment and tens of thousands of employment in Republican districts last year.

On Wednesday, the Republican-controlled U.S. House of Representatives passed a bill to revoke tax breaks and other clean-energy and manufacturing incentives in Democratic President Joe Biden’s Inflation Reduction Act of 2022, which has spurred investment in battery plants, electric vehicles, solar-panel factories, and other businesses.

The proposal has no chance of passing the Democratic-controlled Senate and Biden has promised to veto it if it reaches his desk, but executives in the sector are concerned.

“What I am concerned about is why this type of thinking is coming from the party that is supposed to be for American working people and small businesses and energy security,” said Republican Tony Frisone, CEO of CZAR-Power, an Ohio startup developing fast-charging devices for electric cars.

As Republicans have relied less on corporate financing and become more prepared to criticize liberal social policy-advancing firms, the backlash is another symptom of growing tensions between U.S. businesses and their longtime friends.

Biden’s centerpiece Inflation Reduction Act, which passed last year without a Republican vote, invests $369 billion on climate change. Tax benefits total $270 billion.

On Wednesday, the Chamber of Commerce’s top energy lobbyist Marty Durbin told the Senate energy committee that the tax incentives should not be repealed, even though it opposed the IRA last year.

Business groups opposed the Republican package’s corporate tax hikes and pharmaceutical price limits.

The nonpartisan Congressional Budget Office estimates that repealing the law’s tax credits would save $570 billion over 10 years, 12% of the bill’s $4.8 trillion budget savings.

However, Climate Power, an advocacy group, reports 191 new projects since August, creating 142,000 jobs.

‘NOT THE TIME TO REVERSE’
If tax incentives were rescinded, insulation producer CleanFiber’s expansion plans—involving hundreds of new employment and hundreds of millions of dollars—would be imperiled.

“Now is not the time to go backwards,” CEO Jonathan Strimling stated.

Republicans say tax credits corrupt the free market and favor clean energy over fossil fuels. Their plan includes oil and gas production incentives.

Climate Power reports that over half of the green energy projects announced since the bill’s passing are in House Republican districts and will create 77,261 jobs.

Biden’s 2024 campaign centers on those additional jobs.

This month, Vice President Kamala Harris visited a Hanwha Solutions Corp (009830.KS) Hanwha Q Cells solar panel factory in Dalton, Georgia, a district held by hardline Republican Representative Marjorie Taylor Greene. Though she praised QCell’s investment in her district, Greene did not attend.

Representative Nancy Mace, whose coastal South Carolina district has received $3.5 billion in clean-energy investment since August, acknowledged the risk.

“Solar is really big across the state of South Carolina, so looking at the way small businesses are treated in that proposal gives me concern,” Mace told Reuters. She supported the bill Wednesday.

Industry officials said the House bill sends a worrying message that incentives are not generally supported.

“It’s destabilizing. “You are influencing capital decisions in Korea and Europe,” said Peter Davidson, CEO of investment firm Aligned Climate financial.