Article Summary –
The Inflation Reduction Act, Biden’s major climate policy, encourages green energy via $370 billion in tax credits. Despite Trump’s threats to repeal it, this would require congressional support, which is uncertain. Repeal could harm U.S. manufacturing and ongoing projects, facing GOP opposition.
How the Inflation Reduction Act is Transforming Solar Energy in Arizona
WASHINGTON – The massive $2 billion Sun Stream Complex in Maricopa County is becoming a key player in Arizona solar energy, soon powering over 200,000 homes. This solar farm has been converting sunlight into electricity for more than three years.
Spanning 6,000 acres, the solar facility will produce 973 megawatts of clean energy by 2026, generating $300 million in lease payments and taxes for Arizona’s schools and communities, according to Longroad Energy.
“The projects thrive thanks to the Inflation Reduction Act. It’s driving the economy,” said Longroad CEO Paul Gaynor. “In Arizona, $2 billion of investment, American-made components, and significant job creation. It’s a great story.”
However, changes might come as President-elect Donald Trump has pledged to repeal the IRA, potentially ending subsidies for renewable energy projects.
The IRA, approved in 2022, offers $370 billion in tax credits to boost clean energy projects, reducing dependence on fossil fuels. Goldman Sachs estimates incentives could reach $1.2 trillion by 2032.
Trump has vowed to overturn the IRA, calling it “the Green New Scam.” Such a move requires congressional approval, and some Republicans benefit significantly from the Act. Many are prepared to defend the law.
Longroad officials remain silent on how much Sun Stream Complex relies on IRA incentives. The project, about 40 miles west of Phoenix, aims to cut 1.3 million metric tons of carbon emissions.
Partnering with Phoenix-based First Solar, the top U.S. solar panel manufacturer, Longroad faces competition from China, which dominates the market with 80% of global sales. The U.S. counters this with tariffs, set to increase from 25% to 50% in May.
Arizona Gov. Katie Hobbs praised Sun Stream’s contribution to renewable energy in Arizona. Since 2010, solar installation costs have dropped over 40%, spurring 25% annual growth, per the Solar Energy Industries Association (SEIA).
Solar generates about 11% of Arizona’s electricity, ranking it fifth nationwide in solar capacity. The SEIA predicts Arizona to add 12 gigawatts in the next five years, doubling its current capacity.
Johns Hopkins University warns repealing the IRA could damage U.S. manufacturing. The battery industry’s growth relies on federal subsidies.
“If the goal is domestic manufacturing, then the IRA is essential,” said Autumn Johnson, SEIA’s Arizona director. “There’s little incentive for companies to return to the U.S. otherwise.”
Trump’s Congress dominance starting in January might test the IRA, but Senate Democrats can block repeals, and some Republicans support the law.
In August, 18 House Republicans urged Speaker Mike Johnson against repealing the IRA, citing fears of disrupted private investments and ongoing projects.
Trump’s proposed tariffs could affect solar panel costs. Most imports come from Vietnam, Thailand, Malaysia, and Cambodia. Recent U.S. tariffs target Chinese companies operating there.
Johnson stressed that repealing the IRA would undermine tariffs’ purpose of boosting domestic production. Building a local manufacturing ecosystem requires time and sustained incentives.
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