The surprising winners — and losers — of America’s clean energy boom
Two years ago, Congress passed the biggest climate bill in U.S. history — the Inflation Reduction Act, which spurred growth in solar panels, batteries and electric vehicles across the country.Since then, money devoted to clean energy — initially estimated at $369 billion, but with the potential to reach up to $1 trillion — has flowed into almost every state, largely in the form of tax credits.But this gusher of cash has also created winners and losers, according to a Washington Post analysis of data from the Massachusetts Institute of Technology and the clean energy modeling think tank Rhodium Group.Here is how the Inflation Reduction Act has remade America over the past two years.A windfall for GOP districtsNot a single Republican lawmaker voted for the Inflation Reduction Act in 2022. Since then, many of them have voted to repeal its clean energy provisions and criticized the law as a waste of taxpayer money.But red districts have emerged as the climate law’s biggest winners. According to The Post’s analysis, congressional districts that favored Trump in the 2020 election received three times as much clean energy and manufacturing investments as those that leaned toward Biden.Search or tap a bubble for district informationDistricts where a plurality of voters backed Trump have claimed around $165 billion of the cash so far, compared with just $54 billion in areas where Biden came in first. Of the top 10 districts that have attracted the most clean energy investments, nine are led by Republican lawmakers.The data from MIT and Rhodium’s Clean Investment Monitor tracks company announcements, third-party data sources and financial filings. Projects are entered into the database only when they have broken ground; projects that were announced and later canceled are not included.Some of the biggest beneficiaries of the law have pushed back the hardest against cutting planet-warming pollution and developing renewable energy. Rep. Jodey Arrington (R-Texas), an outspoken critic of the law, called it “a failed liberal spending spree that crippled our economy” and last month introduced legislation to rename it the “Lied About Inflation and Energy Dependence Act.”Arrington’s office declined to comment on the record for this article. His district, which is ranked fifth in the country for clean energy and manufacturing investments, has received nearly $5 billion in investments since the law passed in mid-2022.Developers are drawn to red districts because land is plentiful and cheap, experts say.“Most of this can just be explained by population density,” said Trevor Houser, a partner at Rhodium Group. In rural areas, which are much more likely to vote Republican, ample land — at lower prices — can support giant battery manufacturing plants or large-scale wind farms.Others point to red states’ low taxes and tax incentives for developers. “It’s natural that investors and project developers are wanting to go into areas where they’ve got a predictable business environment,” said Jeremy Harrell, the CEO of ClearPath, a conservative clean energy advocacy group. States like Tennessee, Georgia and Ohio, he said, have less regulatory red tape that could slow big energy projects.Remaking the countryMap showing investments in battery manufacturing since Aug. 16, 2022.As money pours into Republican districts, it has also moved into specific regions — creating new centers of industry across the country.The South, for example, hosts around 38 percent of America’s population, but has received almost half of clean energy investments so far. In the Southeast, battery manufacturing companies have built factories alongside EV assembly lines, creating a so-called “Battery Belt” for electric vehicles that stretches from Alabama and Georgia to North Carolina and Tennessee.Derrick Flakoll, policy associate for BloombergNEF, an energy research firm, points to Southern politicians’ willingness to offer generous incentives to encourage manufacturing growth. In North Carolina, for example, state and local leaders offered Toyota more than $400 million in incentives to construct and operate a giant lithium-ion battery factory in the city of Liberty.Southern states are also more likely to be “right-to-work” states, where union labor has less power; many also have cheap, clean power for factories’ many electricity demands. In Georgia, where Hyundai opened a new, $7.5 billion EV plant, the state has recently opened two new nuclear reactors.Maps showing investments in solar power and energy storage.In the West, particularly in California, developers have built new solar and storage projects, taking advantage of the ample sun and the state’s mandate to produce all of its electricity with clean energy by 2045. Texas has gotten an outsize portion of new solar and storage, thanks to the state’s flexible permitting rules and wide-open spaces.The Midwest has also seen growth in battery manufacturing, piggybacking on the region’s automotive industry. Developers are also working on sustainable aviation fuels in the region, close to the Corn Belt, which can provide feedstocks for those fuels.But clean-energy companies have largely avoided one area: the Northeast. With dense city centers, the region — which has 17 percent of the United States’ population — has just 4 percent of the clean energy investments so far. While many Northeast states have opportunities for offshore wind, that sector has slowed in recent years.An uneven energy boomClean energy spending has skyrocketed since the IRA became law, up 85 percent compared with the preceding two years. Some technologies — like battery manufacturing, sustainable aviation fuels and carbon capture — have surged, going from almost no investment to tens of billions of dollars. Experts say that without the new funding, it’s difficult to imagine those sectors taking off.Where the IRA is creating momentumBattery manufacturingSustainable aviation fuelOthers, like solar power and large battery storage, have continued on a trajectory that started long before the IRA passed. Solar power installations, for example, more than doubled between 2017 and 2021, from around 10 gigawatts to 23 gigawatts. “Those were already on a takeoff trajectory because of pre-IRA cost declines,” Houser said.Where the IRA is accelerating existing trendsSolar powerEnergy storageStill, one technology has struggled. Wind power investment has halved in the past two years.“The IRA made wind investment more attractive,” Houser added. “But it hasn’t been sufficient to overcome the other headwinds wind power is facing.”Stagnating technologiesWind powerNuclear powerDevelopers of offshore wind have faced challenging supply chain bottlenecks, as companies struggle to build and ship the giant turbines. Grassroots opposition from beach towns across the Eastern Seaboard has also thrown a wrench in plans for wind farms. Many offshore wind projects planned by the Biden administration have been canceled.Onshore, in the wind-rich Midwest and Great Plains, developers are facing similar issues: locals who don’t want views obstructed by wind turbines, and difficulty getting permits and permission to connect to the larger electricity grid.Sandhya Ganapathy, chief executive of EDP Renewables North America, says that most of the “low-hanging fruit” — the best sites for wind power in the United States — have already been built out. Wind power had a significant head start compared with other renewables — by 2019, the United States already had over 100 gigawatts of wind, compared with just 76 gigawatts of solar.“The reality is also that wind requires almost seven, eight, nine times the land that you need when compared to solar,” Ganapathy added. That means developers have to acquire more land — and consult with many local residents who could be affected by the sight or sound of wind turbines.Without progress on wind, the United States will struggle to meet its climate goal to cut its greenhouse gas emissions at least in half by 2035, compared with 2005 levels.Despite its major economic impact, the law’s future remains in doubt. Most experts say it’s unlikely that a future Congress will repeal it outright, even under a Republican sweep. In August, 18 Republican lawmakers sent a letter to Speaker of the House Mike Johnson (R-Louisiana), urging him not to “prematurely” repeal any of the tax credits that companies have come to rely on.Some also worry that the struggle to get permits and access to the larger electricity grid is hampering the law, limiting the number of projects that can tap the law’s tax benefits. While lawmakers on both sides of the aisle have pushed for permitting reform, they have yet to reach an agreement.The next president and Congress might be tempted to divert unspent IRA funds to other priorities, warned James L. Connaughton, who led the White House Council on Environmental Quality under President George W. Bush.“The IRA, in my view, is at extreme risk,” he said in an interview.The law also includes grants that could be scaled back by a future administration. According to an analysis by Atlas Public Policy, the law has $33 billion in grants that have yet to be doled out, on top of hundreds of billions of dollars in potential tax credits.“The clean energy investments are not ‘Trump-proof,’” said Joanna Slaney, associate vice president of government affairs at the Environmental Defense Fund. “But it is an indication of how well it is working that we are seeing people step forward and say, ‘These are the benefits in my community.’”MethodologyThe Post’s analysis included only investments in the energy, industry and manufacturing sectors. It excluded retail investments in clean technologies, such as individuals purchasing EVs.Time series of quarterly investments and the bubble chart showing the partisan split in investments refer to estimated actual investments over time. The maps in the article show the size of announced investments with no adjustment for how these would be spread out over time.Eight percent of investments could not be tied to specific congressional districts by Rhodium and are excluded from the bubble chart showing the partisan split in investments.The Post analyzed precinct-level 2020 presidential election result data provided by Decision Desk HQ and assigned each precinct to a district of the 118th Congress based on its location. This analysis was done by Lenny Bronner.
Most of the clean investment since Biden’s landmark climate law has flowed to Republican districts.
Two years ago, Congress passed the biggest climate bill in U.S. history — the Inflation Reduction Act, which spurred growth in solar panels, batteries and electric vehicles across the country.
Since then, money devoted to clean energy — initially estimated at $369 billion, but with the potential to reach up to $1 trillion — has flowed into almost every state, largely in the form of tax credits.
But this gusher of cash has also created winners and losers, according to a Washington Post analysis of data from the Massachusetts Institute of Technology and the clean energy modeling think tank Rhodium Group.
Here is how the Inflation Reduction Act has remade America over the past two years.
A windfall for GOP districts
Not a single Republican lawmaker voted for the Inflation Reduction Act in 2022. Since then, many of them have voted to repeal its clean energy provisions and criticized the law as a waste of taxpayer money.
But red districts have emerged as the climate law’s biggest winners. According to The Post’s analysis, congressional districts that favored Trump in the 2020 election received three times as much clean energy and manufacturing investments as those that leaned toward Biden.
Search or tap a bubble for district information
Districts where a plurality of voters backed Trump have claimed around $165 billion of the cash so far, compared with just $54 billion in areas where Biden came in first. Of the top 10 districts that have attracted the most clean energy investments, nine are led by Republican lawmakers.
The data from MIT and Rhodium’s Clean Investment Monitor tracks company announcements, third-party data sources and financial filings. Projects are entered into the database only when they have broken ground; projects that were announced and later canceled are not included.
Some of the biggest beneficiaries of the law have pushed back the hardest against cutting planet-warming pollution and developing renewable energy. Rep. Jodey Arrington (R-Texas), an outspoken critic of the law, called it “a failed liberal spending spree that crippled our economy” and last month introduced legislation to rename it the “Lied About Inflation and Energy Dependence Act.”
Arrington’s office declined to comment on the record for this article. His district, which is ranked fifth in the country for clean energy and manufacturing investments, has received nearly $5 billion in investments since the law passed in mid-2022.
Developers are drawn to red districts because land is plentiful and cheap, experts say.
“Most of this can just be explained by population density,” said Trevor Houser, a partner at Rhodium Group. In rural areas, which are much more likely to vote Republican, ample land — at lower prices — can support giant battery manufacturing plants or large-scale wind farms.
Others point to red states’ low taxes and tax incentives for developers. “It’s natural that investors and project developers are wanting to go into areas where they’ve got a predictable business environment,” said Jeremy Harrell, the CEO of ClearPath, a conservative clean energy advocacy group. States like Tennessee, Georgia and Ohio, he said, have less regulatory red tape that could slow big energy projects.
Remaking the country
Map showing investments in battery manufacturing since Aug. 16, 2022.
As money pours into Republican districts, it has also moved into specific regions — creating new centers of industry across the country.
The South, for example, hosts around 38 percent of America’s population, but has received almost half of clean energy investments so far. In the Southeast, battery manufacturing companies have built factories alongside EV assembly lines, creating a so-called “Battery Belt” for electric vehicles that stretches from Alabama and Georgia to North Carolina and Tennessee.
Derrick Flakoll, policy associate for BloombergNEF, an energy research firm, points to Southern politicians’ willingness to offer generous incentives to encourage manufacturing growth. In North Carolina, for example, state and local leaders offered Toyota more than $400 million in incentives to construct and operate a giant lithium-ion battery factory in the city of Liberty.
Southern states are also more likely to be “right-to-work” states, where union labor has less power; many also have cheap, clean power for factories’ many electricity demands. In Georgia, where Hyundai opened a new, $7.5 billion EV plant, the state has recently opened two new nuclear reactors.
Maps showing investments in solar power and energy storage.
In the West, particularly in California, developers have built new solar and storage projects, taking advantage of the ample sun and the state’s mandate to produce all of its electricity with clean energy by 2045. Texas has gotten an outsize portion of new solar and storage, thanks to the state’s flexible permitting rules and wide-open spaces.
The Midwest has also seen growth in battery manufacturing, piggybacking on the region’s automotive industry. Developers are also working on sustainable aviation fuels in the region, close to the Corn Belt, which can provide feedstocks for those fuels.
But clean-energy companies have largely avoided one area: the Northeast. With dense city centers, the region — which has 17 percent of the United States’ population — has just 4 percent of the clean energy investments so far. While many Northeast states have opportunities for offshore wind, that sector has slowed in recent years.
An uneven energy boom
Clean energy spending has skyrocketed since the IRA became law, up 85 percent compared with the preceding two years. Some technologies — like battery manufacturing, sustainable aviation fuels and carbon capture — have surged, going from almost no investment to tens of billions of dollars. Experts say that without the new funding, it’s difficult to imagine those sectors taking off.
Where the IRA is creating momentum
Battery manufacturing
Sustainable aviation fuel
Others, like solar power and large battery storage, have continued on a trajectory that started long before the IRA passed. Solar power installations, for example, more than doubled between 2017 and 2021, from around 10 gigawatts to 23 gigawatts. “Those were already on a takeoff trajectory because of pre-IRA cost declines,” Houser said.
Where the IRA is accelerating existing trends
Solar power
Energy storage
Still, one technology has struggled. Wind power investment has halved in the past two years.
“The IRA made wind investment more attractive,” Houser added. “But it hasn’t been sufficient to overcome the other headwinds wind power is facing.”
Stagnating technologies
Wind power
Nuclear power
Developers of offshore wind have faced challenging supply chain bottlenecks, as companies struggle to build and ship the giant turbines. Grassroots opposition from beach towns across the Eastern Seaboard has also thrown a wrench in plans for wind farms. Many offshore wind projects planned by the Biden administration have been canceled.
Onshore, in the wind-rich Midwest and Great Plains, developers are facing similar issues: locals who don’t want views obstructed by wind turbines, and difficulty getting permits and permission to connect to the larger electricity grid.
Sandhya Ganapathy, chief executive of EDP Renewables North America, says that most of the “low-hanging fruit” — the best sites for wind power in the United States — have already been built out. Wind power had a significant head start compared with other renewables — by 2019, the United States already had over 100 gigawatts of wind, compared with just 76 gigawatts of solar.
“The reality is also that wind requires almost seven, eight, nine times the land that you need when compared to solar,” Ganapathy added. That means developers have to acquire more land — and consult with many local residents who could be affected by the sight or sound of wind turbines.
Without progress on wind, the United States will struggle to meet its climate goal to cut its greenhouse gas emissions at least in half by 2035, compared with 2005 levels.
Despite its major economic impact, the law’s future remains in doubt. Most experts say it’s unlikely that a future Congress will repeal it outright, even under a Republican sweep. In August, 18 Republican lawmakers sent a letter to Speaker of the House Mike Johnson (R-Louisiana), urging him not to “prematurely” repeal any of the tax credits that companies have come to rely on.
Some also worry that the struggle to get permits and access to the larger electricity grid is hampering the law, limiting the number of projects that can tap the law’s tax benefits. While lawmakers on both sides of the aisle have pushed for permitting reform, they have yet to reach an agreement.
The next president and Congress might be tempted to divert unspent IRA funds to other priorities, warned James L. Connaughton, who led the White House Council on Environmental Quality under President George W. Bush.
“The IRA, in my view, is at extreme risk,” he said in an interview.
The law also includes grants that could be scaled back by a future administration. According to an analysis by Atlas Public Policy, the law has $33 billion in grants that have yet to be doled out, on top of hundreds of billions of dollars in potential tax credits.
“The clean energy investments are not ‘Trump-proof,’” said Joanna Slaney, associate vice president of government affairs at the Environmental Defense Fund. “But it is an indication of how well it is working that we are seeing people step forward and say, ‘These are the benefits in my community.’”
Methodology
The Post’s analysis included only investments in the energy, industry and manufacturing sectors. It excluded retail investments in clean technologies, such as individuals purchasing EVs.
Time series of quarterly investments and the bubble chart showing the partisan split in investments refer to estimated actual investments over time. The maps in the article show the size of announced investments with no adjustment for how these would be spread out over time.
Eight percent of investments could not be tied to specific congressional districts by Rhodium and are excluded from the bubble chart showing the partisan split in investments.
The Post analyzed precinct-level 2020 presidential election result data provided by Decision Desk HQ and assigned each precinct to a district of the 118th Congress based on its location. This analysis was done by Lenny Bronner.