On the Grid: Clean Energy Cash in Limbo 3/21/24

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Welcome back to On the Grid, Third Way’s bi-weekly newsletter, where we’ll recap how we’re working to deploy every clean energy technology as quickly and affordably as possible. We’re excited to have you join us!

GOP leadership has characterized the Inflation Reduction Act (IRA) as ‘wasteful’ and pledged to reverse some of the bill’s provisions to pay for new tax cuts. But leadership doesn’t speak for the caucus writ large: this month, a group of 21 House Republicans sent a letter to Ways and Means Committee chair Rep. Jason Smith (MO-08), asking him to preserve the IRA’s clean energy tax credits.

The letter’s authors argue that dismantling IRA tax credits is not simply bad for clean energy but will stifle economic growth and hinder the Trump Administration’s stated desire to achieve ‘energy dominance.’

The group is right to worry. Clean energy is bringing major investments and new jobs to Republican-led districts. And that’s before districts receive the bulk of committed funding: Two-thirds of all committed federal dollars for clean energy haven’t been spent yet. That’s billions of already-appropriated dollars for projects in Republican congressional districts, sitting in limbo as the House decides the fate of clean energy tax credits. Here’s a look at what’s at stake. 

What’s at Risk: Since the IRA, billions of dollars in clean energy investments have flowed into communities across the country. In 2024 alone, clean energy investments surged to over $272 billion nationwide. For every federal dollar spent on clean energy, the private sector spends $6. The IRA did its job–it spurs private-sector spending and will continue to do so. Take a look at this chart, showing outstanding investments in three GOP districts, whose members joined that pro-IRA letter earlier this month.

In just the three districts we highlight above, more than $10 billion in clean energy investments could evaporate if these clean energy tax credits are rolled back in reconciliation.

What We’re Doing: We know that repealing tax credits driving real investment into communities would be a mistake. As we've mapped before, these incentives are delivering billions in clean energy investment and jobs where they're needed most. We're working with a broad coalition–across NGOs and industry leaders–to defend these crucial tax credits and equip policymakers with the data they need to grasp the full picture.

This week, the Department of Energy (DOE) distributed a $57 million loan to help restart the Palisades Nuclear Plant in Michigan. This is the first installment of a $1.5 billion loan, approved by the Loan Programs Office (LPO) last year.

This marks the first time a mothballed US nuclear power plant has been saved from shutdown and returned to operation. It also represents the Trump Administration’s first financial commitment to nuclear, one of the few clean energy technologies slated to get a boost under the current administration

Why This Matters: Revitalizing existing nuclear plants is a critical piece of the clean energy puzzle. By extending the life of these plants, we keep reliable, affordable clean energy online longer and reduce the need for additional fossil fuels. Constellation Energy and NextEra are also planning to restart plants in the coming years, signaling broader industry momentum.

What We’re Hearing: While this announcement is undeniably positive, the nuclear sector largely remains in a period of uncertainty. Amid ongoing funding freezes, industry leaders are worried that ongoing efforts to cut government spending could target previously signed agreements or essential programs to advance nuclear technology deployment and strengthen fuel supply chains. The future of LPO is particularly uncertain.

As Rowen Price, Third Way’s senior nuclear energy policy adviser noted in E&E this week, “After a multiyear resurgence in support for reactor manufacturing and deployment, the federal government has been sending mixed signals on clean energy. Continued support for Palisades from [the Loan Programs Office] is unequivocally good news, and it’s a testament to how LPO spurs action in the private sector and boosts local economies.”

What We’re Doing: Since we started advocating for advanced nuclear in 2014, Third Way has worked with a bipartisan set of NGOs and policymaker partners to restore America’s nuclear leadership. We’re continuing that work under this Administration, pushing both the White House and Congress to uphold and expand vital nuclear initiatives, ensuring the US stays at the forefront of nuclear innovation and energy security.

• Rob Meyer and Jessie Jenkins, on Shift Key, discuss new research from the REPEAT Project and the impact that repealing EV tax credits will have on US manufacturing, climate, and consumers.
• Jeff Currie in The Carlyle examines evolving dynamics in global energy markets and outlines how a shift towards energy security is driving energy investment.
• Jeff St. John in Canary Media fact-checks the Trump Administration's claim that clean energy drives energy prices and outlines how repealing clean energy tax credits will cost jobs, risk hundreds of billions of dollars of investment, and significantly raise electricity prices for US businesses and households.