Cuts to clean energy tax credits will harm North Carolina, advocates say

As the legal fight continues over whether the Trump administration can ignore climate spending laws passed by Congress, North Carolina advocates are preparing for the next brewing federal threat.

A Republican-led budget bill working its way through Congress aims to cut $2 trillion in programs to instead help pay for increased spending on the military and border security as well as tax cuts for corporations and higher-income earners. U.S. House Budget Committee Chair Jodey Arrington, R-Texas, recently referred to clean energy programs under the 2022 Inflation Reduction Act as ​“low-hanging fruit” for budget cuts.

Convincing Republicans in Congress that those programs are worth defending will be a critical priority in the coming weeks, advocates said in a call with reporters last week.

“We’re trying to remind representatives who have a stake in this, most of whom are Republicans, that real harm may come to their constituents if these tax credits are taken away,” said Stan Cross, electric transportation director with the Southern Alliance for Clean Energy.

Cross pointed to data from Atlas Public Policy and Utah State University showing that nearly three-quarters of the nation’s $276 billion in clean energy manufacturing investments are in districts represented by Republicans.

Climate Power, a nonprofit communications group that organized the call, estimates the Inflation Reduction Act has already spurred over $20 billion in climatetech investments and created more than 17,000 jobs in North Carolina, most in Republican areas. That includes developments like Toyota’s massive new EV battery plant in Randolph County.

But a web of tax incentives established by the 2022 law — helping to entice Toyota to manufacture electric vehicles in the United States and consumers to buy them — hangs in the balance before the Republican-controlled Congress, even if the courts decide the Trump administration can’t unilaterally scrap other climate spending.

Cuts to those tax credits could slow North Carolina’s shift to renewable energy, said Alex Campbell, public policy analyst with the N.C. Budget and Tax Center, during the Climate Power call. That would harm the environment and raise energy costs for Tar Heels, he said.

“It’s worth emphasizing why these cuts are being pursued,” Campbell added. ​“It’s about funding tax cuts for the ultra-wealthy by destroying our public programs.”

Still, there’s little indication so far that North Carolina’s congressional delegation is poised to stand up for clean energy incentives. Among the 18 Republicans who last year urged House Speaker Mike Johnson to preserve the credits, none are from the Tar Heel State, and only one, Rep. Buddy Carter of Georgia, is from the Southeast.

Sen. Thom Tillis, generally regarded as the Republican who’s friendliest to clean energy in Congress, voted against the Inflation Reduction Act. So did Republican Rep. Richard Hudson, whose district includes the Toyota plant, saying in a statement that the law would ​“throw money at woke climate and social programs that won’t work.”

Newly minted congressional Rep. Tim Moore, also a Republican, supported a bipartisan state law forcing Duke Energy to zero out its carbon pollution by 2050 when he was speaker of the North Carolina House of Representatives. His district has three new clean energy developments, including a lithium-processing plant in Kings Mountain. But Moore may end up as a foe of the Inflation Reduction Act in Congress: He criticized it in a 2022 social media post for not effectively driving down inflation and last year urged a U.S. senator from his state to address ​“problems” that he said the climate law created.

With Republicans retaining an extremely narrow majority in Washington, even a single vote could tip the scales, Cross said. 

“Some of the votes are going to be fifty-fifty votes,” he said. ​“So, there are points at which an individual representative going one way or another could be meaningful.”

While Congress debates the future of clean energy incentives, North Carolina House Democratic Leader Robert Reives said on the Climate Power call that he hopes the Republican majority in the state’s General Assembly will help preserve the state’s clean energy investments — but he’s also concerned about ​“negative” energy legislation.

“I’m worried,” he said, ​“because over the last month, there’s been a troubling tendency to follow whatever the federal government states instead of looking at what the effects are going to be for North Carolina.”