State-Level Analysis of Employment Risk Under a Repeal of Clean Manufacturing Tax Credits

Introduction

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Congressional Republicans are currently moving budget bills that repeal or restrict clean manufacturing tax credits through the reconciliation process. As of the drafting of this brief, the U.S. House has passed its version of the bill, and the U.S. Senate is in the process of drafting its version. Republicans in Congress and the administration have stated they hope to have a final bill on President Trump’s desk by July 4, though that deadline is subject to change.

The House bill is sweeping and impacts everything from health care to immigration as well as introducing provisions that would effectively kill tax credits for clean energy and advanced manufacturing by making them unusable and sunsetting them early.

The BlueGreen Alliance conducted an analysis of the potential impacts of the policies in the House bill on the employment footprint of manufacturing and found that repealing the clean manufacturing tax credits puts over two million jobs at risk.

The analysis also found that in several states the manufacturing sector is at the precipice of massive growth under the tax credits. With the tax credits in place, New Mexico, Nevada, and Georgia could all see manufacturing employment grow more than 10%. Arizona, Kentucky, Michigan, South Carolina, Tennessee, and West Virginia could all see at least a 5% boost. Without the credits, that future is uncertain.

These tax credits have a proven track record of creating jobs and driving private investment. They have given manufacturers and developers the market certainty they needed to break ground on billions of dollars’ worth of new or expanded manufacturing facilities, creating jobs across the nation.

Without the market certainty to drive investment in new U.S. manufacturing build out, the jobs that would come with that investment are also at risk.

This analysis looks at facilities that manufacture and assemble products in the wind, solar, battery, and zero emission vehicle supply chains. These likely benefit from the 45X Manufacturing Production Tax Credit, the 48C Qualifying Advanced Energy Project Tax Credit, or benefit from increased household demand thanks to the 30D New Clean Vehicle Consumer Tax Credit. Many of these facilities can also be assumed to benefit from the demand stimulated by the Clean Energy Investment and Production Tax Credits, though the construction and installation job creation associated with those clean energy tax credits are not included in the scope of this analysis.

Definitions

This analysis looks at the impacts of rolling back the clean manufacturing tax credits across the wind, solar, and battery manufacturing sectors as well as the zero emission vehicles industry—including vehicle assembly, parts manufacturing, and charger production.

These jobs totals include direct, indirect, and induced jobs, as defined below:

• Direct: Manufacturing employment generated at manufacturing facilities that are directly supported by clean manufacturing tax credits. This excludes construction jobs building or expanding facilities as well as all the other jobs associated with deploying clean technologies. These numbers are drawn directly from company announcements and exclude job creation connected to projects that have already been cancelled.
• Indirect: Estimated employment generated in economic sectors that supply direct beneficiaries. For example, this would include suppliers of materials and subcomponents for solar panels.
• Induced: Estimated employment resulting from the economic stimulus of direct and indirect employment. This would include, for example, restaurants in a town with a new manufacturing facility adding staff to meet the needs of larger crowds as employees of direct beneficiaries would be able to eat out more often.

Key Findings

Effectively repealing clean manufacturing tax credits—as proposed in the House budget bill—would put over two million jobs at risk. This total includes:

• Nearly 300,000 direct manufacturing jobs at facilities supported by clean manufacturing tax credits;
• Over 1 million indirect jobs down the supply chain; and
• Nearly 643,000 induced jobs created by the economic stimulus of the direct and indirect jobs.

Seven states have more than 100,000 jobs at risk if the clean manufacturing tax credits are repealed:

• California – 329,131
• Georgia – 258,517
• Michigan – 226,610
• Tennessee – 140,985
• Illinois – 138,214
• South Carolina – 135,510
• Arizona – 100,170

Threat to Burgeoning Manufacturing Renaissance

Since the tax credits were signed into law in 2022, different metrics have suggested that the nation is on the precipice of a manufacturing renaissance. For example, monthly construction spending on manufacturing facilities—an indicator of market certainty—accelerated in the last two years of the Biden administration. From a start of $76.8 billion spent on construction in May 2021, the country posted month-over-month gains for nearly two years, peaking at $238.4 billion in June 2024.  As the future of the clean manufacturing tax credits has become increasingly less certain with the change in administration, construction spending on manufacturing facilities has begun to decelerate, with $232.2 billion spent in April 2025.

Comparing the direct jobs totals for each state with average manufacturing employment for the decade prior to the tax credits being signed into law, we found that three states stand to increase manufacturing employment by more than 10%. This suggests that under the tax credits several states are on the verge of significant manufacturing sector growth. Without the credits, that future is uncertain.

For example, the 11,494 direct jobs in Nevada would represent a 22.87% increase in the state’s average manufacturing workforce. Likewise, in Georgia, 39,261 direct jobs represent a 10.17% increase in its manufacturing workforce, and in New Mexico, 3,500 direct jobs represent a 12.52% increase in the state’s manufacturing workforce. Arizona, Kentucky, Michigan, South Carolina, Tennessee, and West Virginia could all see a boost of at least 5%.

Conclusion

The House budget bill, if enacted, puts at risk more than two million U.S. jobs from the provisions to repeal manufacturing tax credits alone. If the provisions in this bill become law, workers will be the ones to pay the price. It sells them out to foot the bill for a massive tax break for billionaires.

Across the country, and in red states especially, this bill would spell the loss of massive job creation and economic stimulus. In several states, particularly those in the Southwest, the number of jobs directly tied to the clean manufacturing tax credits when compared with historic manufacturing employment trends signals that manufacturing revitalization is underway but could be snuffed out if the investment and certainty provided by these tax credits is removed.

As the Senate drafts their bill, Senators would be wise to consider the chilling effect that removing market certainty could have by undermining manufacturing businesses in their states, and ask themselves how many constituent jobs lost is a billionaire tax break worth.