The US is set to become the cleantech superpower, from wind and solar energy to hydrogen and nuclear power emerging and developing across the country.
This transformation is being stimulated by the Biden administration, which is accelerating a plan to decarbonise the US power generation sector and reduce emissions. Last year’s Inflation Reduction Act (IRA) and its hundreds of billions of dollars in cleantech subsidies are designed to encourage the private-sector investment and accelerate the country’s decarbonisation effort. The tax incentives have made the US very attractive to investors, say cleantech developers, and are funnelling money away from other countries. Since the passage of the IRA last year, $90 billion of capital has already been committed to new ventures, according to Climate Power.
The IRA offers $369 billion of tax credits, grants, loans, and subsidies, many of them guaranteed past 2030. The credits can lso be sold which allows deep-pocketed investors with enough tax liability to buy the credit—a way to quickly increase the amount of capital developers have. Credit Suisse thinks the public spending enabled by the IRA could eventually reach $800 billion, and $1.7 trillion if private-sector investment is accounted for.
The clean energy revolution is already creating jobs and revitalising industries. An example of this would be in Turtle Creek, Pennsylvania, a line of workers is assembling batteries based on zinc, an alternative to lithium-ion that offers competitively priced, non-flammable, dispatchable energy for hospitals, schools, and other stationary users. The goal for the factory is to double its total capacity to 3 gigawatt-hours in 2024, producing a battery every 90 seconds once the plant is fully automated. The workforce is also set to double to a total of 500.
However, the US clean energy revolution is not without its challenges. The ring of protectionism, and the sheer scale of the state intervention, has alarmed some other countries, even those who once implored the US to rejoin the global climate fight. France’s President Emmanuel Macron says the IRA could “fragment the West.” Ursula von der Leyen, the European Commission’s president, has suggested it would bring “unfair competition” and “close markets.”
Furthermore, there are doubts about the US’s ability to break the dependence on cheap Asian components that have boosted the advance of renewables over the last few years. At a time when the White House is also contending with high inflation and Russia, it remains to be seen whether the US can reset the global energy order, create high-paying cleantech jobs at home, and cut emissions—all simultaneously.
Nonetheless, the clean energy revolution in the US is a massive undertaking, and it is already having a hugely positive impact. It is industrial policy on a macro scale, aiming to revamp the country’s broken-down infrastructure and create advanced manufacturing jobs in Rust Belt regions like Western Pennsylvania, once the heart of the country’s steelmaking industry. The US is now the most opportunity-rich, most aggressive growth clean energy country.