6 key takeaways about the US clean energy manufacturing boom

The U.S. energy transition is moving faster than ever — and it’s increasingly a Made-in-America affair.

Canary Media just published a series of in-depth articles digging into all aspects of the country’s clean energy manufacturing push, which was set into motion when President Biden signed the Inflation Reduction Act last August. You can read all of our reporting on the U.S. clean energy manufacturing boom here.

But for the TL;DR version of our coverage, here are six of the most important things to know about clean energy manufacturing in the U.S.

Clean energy manufacturing is no longer niche — it’s at the fore of the U.S. economy

For most of its existence, U.S. clean energy manufacturing has been marginal, as the country has historically leaned on imports to build out its clean energy capacity.

But that’s changed dramatically in the nine months since the Inflation Reduction Act went into effect. Motivated by the harsh lessons of Covid-era supply-chain disruptions and Russia’s invasion of Ukraine, as well as a rising desire to reduce reliance on China, Democrats passed the law last August and unleashed hundreds of billions of dollars to encourage the creation of a domestic clean energy supply chain.

Since then, private firms have announced nearly 100 clean energy manufacturing facilities across the U.S.

The Biden administration is now hoping the U.S. will ride this wave of activity into a leadership position for global clean energy manufacturing. Not only does the White House want to see ​“as much of this manufacturing in the United States as possible,” Energy Secretary Jennifer Granholm told Canary Media, but it will even push for exporting clean energy around the world.

For more, read Julian Spector’s in-depth look at the current state of U.S. clean energy manufacturing.

Clean energy manufacturing is surging in the U.S., but the country is far from self-sufficient

Depending on whom you ask, the Inflation Reduction Act is either a climate law or an energy security law — or some mix of both.

In fact, Senator Joe Manchin (D-WV) told our reporter Julian Spector that energy security is the reason he wound up giving the law his crucial ​“yes” vote.

But as of now, it’s unclear exactly when the U.S. will be able to produce the clean energy products it needs. Most of the factories announced since the Inflation Reduction Act passed aim to go online by the end of 2024, but those factories are not enough on their own to meet the country’s surging demand for solar panels, wind turbines, EVs and batteries.

Let’s take solar as a case in point: Even in the best-case scenario, in which manufacturers hit 100 percent of the production timelines and targets they’ve announced, the Solar Energy Industries Association estimates that the U.S. will still need to import 24 gigawatts of solar panels in 2030 alone. The country installed 17 gigawatts last year, for reference.

That means the U.S. will still have to rely on imports to reach its climate goals — even as it attempts to incubate a bustling, homegrown clean-manufacturing industry.

For more, read Eric Wesoff’s analysis of the country’s bid for solar self-sufficiency and check out our data-driven piece about the speed and scale of U.S. clean energy manufacturing.

The Inflation Reduction Act is reversing the yearslong slowdown in U.S. wind manufacturing

The U.S. wind energy manufacturing industry has in recent years vacillated between operating at gale force and screeching to a standstill. That’s because the federal government has occasionally allowed a key tax credit to lapse, hampering the industry’s ability to make a predictable return on its investments.

But now that the Inflation Reduction Act has firmed up the formerly fickle tax credits, multiple companies are reopening, expanding and even building brand-new wind manufacturing facilities across the U.S.

All of that has contributed to a ​“second renaissance” for wind manufacturing in the U.S., John Hensley, the vice president of research and analytics at the American Clean Power Association trade group, told Canary Media’s Maria Gallucci.

Read the full story on the revival of U.S. wind manufacturing here.

The Southeastern United States is emerging as a key hub for clean energy manufacturing

If you look at a map of the clean energy facilities announced since the Inflation Reduction Act (Canary Media has conveniently created one), you’ll quickly notice a cluster of activity concentrated in the lower right-hand corner of the country.

That’s because states in the Southeast — namely, Georgia, South Carolina and Tennessee — have attracted the majority of clean energy manufacturing announcements so far. In fact, Georgia and South Carolina are the two leading states in terms of cleantech manufacturing investment since the IRA went into effect.

In particular, the region has become a burgeoning ​“Battery Belt” as facilities spanning from lithium processing to battery fabrication to auto assembly to battery recycling have opened up, broken ground or been announced.

And while the Southeast’s surging influence in clean energy manufacturing may feel sudden, it’s actually been decades in the making, according to Julian Spector, who spent three days traveling across the region last month.

Read the full dispatch from the Southeastern Battery Belt, a critically important region in the U.S. bid to become a clean energy manufacturing powerhouse.

Tax credits, while byzantine, are the catalyst behind this manufacturing push

Terms like ​“remarkable” and ​“revolutionary” aren’t typically what come to mind when you think of taxes. And yet the dynamic new U.S. clean energy manufacturing sector is largely the result of innovative changes to the federal tax code.

The Inflation Reduction Act is stuffed with billions of dollars in tax credits for both clean energy manufacturers and consumers, most of which are available only for products that are at least partially made in the U.S. That’s created a straightforward incentive for companies: Produce clean energy products in the U.S. and the government will give you money.

Companies have responded to the signal. Private firms, both domestic and foreign, have announced over $70 billion in investment in clean energy facilities over the last nine months.

But behind this simple cause-and-effect are thorny debates over exactly who and what is eligible for these tax credits — and whether they’re enough to achieve domestic manufacturing ambitions.

Read Jeff St. John’s deeply reported pieces on the debate over one of the climate law’s key tax credits and whether EV tax credits can create a manufacturing base on par with U.S. demand.

None of this is going to succeed if the U.S. doesn’t quickly train a qualified workforce

Clean energy manufacturing is expected to create 900,000 jobs in the U.S. over the next 10 years.

Finding enough workers to fill those roles is the No. 1 challenge facing the U.S. clean energy manufacturing sector, execs told our reporter Julian Spector. The view is the same from the Department of Energy: ​“The big challenge is going to be workforce,” Secretary Granholm told Canary Media.

This is, in some ways, a good problem for the country to have. But it’s still a problem. 

A state-run program in Georgia, the country’s burgeoning cleantech manufacturing capital, may represent one solution.

The state’s decades-old Quick Start program provides free, customized job training for companies — and as the state has morphed into a cleantech hub, the program’s clients have begun to skew heavily toward clean energy manufacturing firms, Quick Start’s executive director told our staff writer Alison F. Takemura.

Read the full story on how Georgia is helping train clean-energy manufacturing workers.