New Study Finds the Inflation Reduction Act Makes a Game-Changing Business Case for Growing Domestic U.S. Wind and Solar Industry
Study Finds U.S.-Made Wind and Solar Components Will Be Cheaper Than Imports for the First Time Ever, Contributing to 1.6 Million New Wind and Solar Jobs
The topline findings of the report include:
• For the first time in U.S. history, using U.S.-made wind and solar components will be cheaper than importing them. Due to the 45X manufacturing tax credit alone, the cost of solar PV modules assembled in the U.S. and made from 100% domestically manufactured components will now be more than 30% less expensive to produce than imported modules. U.S.-manufactured onshore and offshore wind components (like towers, blades, and nacelles) will also be cheaper than imported products for the first time.
• It pays to pay workers well. Wind and solar developers can significantly cut costs by meeting prevailing wage and apprenticeship criteria to take advantage of the full value of the clean electricity tax credits. The new report finds that when a developer meets the prevailing wage and apprenticeship standards, the cost of producing solar or onshore wind power drops more than 60%, relative to deciding not to offer workers fair pay and career pathways. Any additional project costs associated with meeting these labor standards are more than offset by the full credit. Costs will likewise be roughly 20% cheaper for offshore wind projects that meet these labor standards than projects that do not.
• Together, the clean energy tax credits and the 45X manufacturing tax credit will induce demand for more than 1.6 million additional solar and wind jobs, compared to projected employment levels if the Inflation Reduction Act had not passed.
• The Inflation Reduction Act will significantly increase demand for U.S.-made aluminum, cement, and steel for use in solar and wind projects. The report finds the expansion of wind and solar power due to the Inflation Reduction Act will dramatically increase demand for aluminum—a primary material for solar panels—and cement and steel—significant materials for wind turbines. Expanding clean U.S. aluminum and steel production for clean energy will better support our climate goals than relying on emissions-intensive imports. The U.S. already produces cleaner steel on average than all of the world’s other major steel producers. By using Inflation Reduction Act funding to cut emissions in these industries while expanding production, the U.S. can meet the growing materials needs of the clean energy economy while supporting a livable climate.