Immediately after the news broke that Donald Trump would once again be president, stocks in solar companies plummeted. Array Technologies, which has manufacturing facilities in Albuquerque, saw an approximately 20 percent drop in its stocks while Sunnova, which installs residential solar, saw more than 50 percent drop in stock.

One reason for this sudden drop in stock prices is the uncertainty around the future of the Inflation Reduction Act.

Jim DesJardins, executive director of Renewable Energy Industry Association of New Mexico, said the Inflation Reduction Act created a “10-year runway that provides an opportunity through incentives and other frameworks for the renewable energy (sector) to expand and grow.”

The law includes $365 billion of incentives, including the 30 percent federal tax credit for solar installations.

But it doesn’t stop there. DesJardins said it also provides incentives for apprenticeships and locating installations in low-income communities or places that have traditionally relied upon fossil fuel energy as an economic base.

Some Republicans have expressed interest in repealing all or part of the Inflation Reduction Act. Since it narrowly passed with Vice President Kamala Harris casting the tie-breaking vote about two years ago, Republicans have tried 54 times to repeal the law, including 29 votes on the floor and 25 votes in committees and subcommittees. Climate Power has been tracking these attempts.

At the same time, the Inflation Reduction Act quickly began doing what it was supposed to do: create new investment in the clean energy sector.

Inflation Reduction Act led to the ‘advent of economic revolution’

E2 Executive Director Bob Keefe and author of the book Clean Economy NOW said that repealing Inflation Reduction Act incentives like clean energy tax credits would hurt communities across the United States. E2 has been tracking investments that have been spurred by the Inflation Reduction Act.

Keefe said the Inflation Reduction Act and its tax credits, not just for renewable energy sources like wind and solar but also for electric vehicles and clean energy manufacturing, has brought the nation to the “advent of economic revolution, the likes of which we haven’t seen in this country in generations.”

Keefe said there have been more than 350 clean energy industry projects announced nationwide since the Inflation Reduction Act passed. Those projects have brought $130 billion worth of private investments and created approximately 113,000 jobs.

“The idea that we would roll back these policies these tax credits when we know that they’re creating jobs, driving economic growth, creating local and state revenues, just seems

like a big step in the wrong direction,” he said.

A lot of the 350 projects that E2 has tracked are located in areas that tend to vote Republican. Keefe said 60 percent of the projects announced are located within Republican congressional districts. Seven of the 350 projects are in New Mexico.

DesJardins said that just because a project is announced doesn’t mean that it will come to fruition. He said “things are definitely more uncertain than they were before Tuesday, Nov. 5.”

“I think President-elect Trump, in his first term in office, demonstrated that he was hard to predict,” DesJardins said.

He said in any business environment, certainty is better than uncertainty and, since the election, the renewable energy sector is facing more uncertainty.

Companies say the Inflation Reduction Act is integral to their business

It isn’t completely clear what would happen should the tax credits be repealed. Keefe said some companies are already beginning to scale back or are looking for other places to do business.

In August, E2 surveyed 900 clean energy companies from across the country and asked about the Inflation Reduction Act and what would happen if it got repealed or rolled back.

“The vast majority of clean energy companies said the IRA was integral to their business and to revenues, about a quarter of those companies surveyed said if the IRA is rolled back or reduced significantly, they’d have to lay off employees. Ten to 12 percent said if we go backward on this policy, they would either have to close their doors or move to other countries,” Keefe said.

That investment is one reason why the tax credit portion of the Inflation Reduction Act has garnered support from Republican politicians.

A group of 18 Republicans in the U.S. House of Representatives sent a letter to Speaker Mike Johnson in August urging him not to allow the clean energy tax credits from the Inflation Reduction Act to be repealed.

Those Republicans don’t necessarily support the full Inflation Reduction Act, but they recognize that the tax credits have benefited their communities.

“Today, many U.S. companies are already using sector-wide energy tax credits – many of which have enjoyed bipartisan support historically – to make major investments in new U.S. energy infrastructure,” the Republicans wrote. “We hear from industry and our constituents who fear the energy tax regime will once again be turned on its head due to Republican repeal efforts. Prematurely repealing energy tax credits, particularly those which were used to justify investments that already broke ground, would undermine private investments and stop development that is already ongoing. A full repeal (of the Inflation Reduction Act) would create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return.”

DesJardins said advocates will have to wait and see if those Republicans stand by the clean energy tax credits in the future, but he said the letter is a good sign that there is a real interest in keeping the tax credits in place.

It is that bipartisan support for the clean energy tax credits, including some that make it easier for people to afford rooftop solar, that makes DesJardins skeptical that they will be rolled back under a future Trump administration. He said he can see other parts of the Inflation Reduction Act that are not quite as visible and don’t impact as many people being repealed.

“I think there could be some parallels to this and the Affordable Care Act, also known as Obamacare, in that, you know, people were against it, but as they saw the benefits, there were some people who changed their perspectives,” he said.

He said as the Inflation Reduction Act’s impacts continue to grow, he anticipates the opposition will decline.

Keefe said that one of the top issues for voters this election was the economy.

“If (elected leaders) are interested in making America more competitive with the rest of the world if they’re interested in bringing jobs and opportunities to states and communities—including many that were bypassed by previous economic transitions, we’re talking about rural places in Georgia and New Mexico and North Carolina and Ohio, where these projects are going—then it would be crazy for them to roll back these policies,” he said. 

He said that if the tax credits are rolled back “it’s not going to hurt the hippies and environmentalists that live in San Francisco or New York. It’s going to hurt working class people in New Mexico. It’s going to hurt working class people in Georgia, North Carolina, Texas and all the other places that voted for these officials to take office in Washington.”

The energy transition is not going to stop, but could be slowed

Going forward, the renewable energy industry is facing the possibility of tariffs as well as the rollback of incentives. But that doesn’t mean that the clean energy transition will come to a halt.

“In the solar industry, we’ve been through lots of ups and downs over the almost 15 years that I’ve been involved in it,” DesJardins said.

He said companies that are resourceful, strong and agile are able to make adjustments. 

“Unfortunately, there will be some people that will be able to adjust better than others, but I think our industry in general is very resilient, and I think we’ll see you see that moving forward,” he said.

DesJardins pointed out that when Trump was campaigning in 2016 he said he would bring coal back. But no new coal plants are opening in the United States because they are no longer cost effective.

Keefe also said that the Trump administration is not going to halt the transition.

“I think it’s important to note that the clean economy today is not the clean economy of when Donald Trump was in office,” Keefe said. “The technology has gotten better. The momentum is clearly there. The demand is there. Nobody wants to pay more for energy than they have to. And right now, hands down, without doubt, the cheapest power available is solar and wind.”

He said the Inflation Reduction Act provided clarity around federal policies. He said the uncertainty around the future of the landmark legislation could lead companies to reevaluate where they’re investing their money or building factories. 

“I think that the new administration and the new Congress certainly has the opportunity, and has said that they will try to at least slow the growth of the clean economy,” Keefe said. “I don’t think they’ll stop it—I hope they don’t stop it—but they definitely have the opportunity to slow it. And that’s again, just bad news for the entire country, but especially the working people in many of them, in Republican states that elected them to represent them in Washington.”
In the end, Keefe said the tax credits should not be a partisan issue.

“There should be nothing political or partisan about creating jobs, driving economic growth, making America more competitive. And that’s what we’re talking about here,” he said.

Keefe said the Inflation Reduction Act gave the United States the chance to catch up with other countries when it comes to building a cleaner economy.

“America has been playing catch up to the rest of the world on clean energy for too long,” he said.

Prior to the Inflation Reduction Act, the majority of solar panels or batteries came from China. Now companies that manufacture solar panels or other components are moving to New Mexico and other parts of the United States. Ebon Solar announced in August that it will be building photovoltaic cells in Albuquerque.

“Since the IRA passed, we now have more than 50 solar panel factories being built in America,” Keefe said. “We have about 50 battery factories being built in America. And we’re finally being able to compete on the international market, or getting in the game in the international market.”