Red States are Big Winners with Biden’s Clean Energy Projects

January 23, 2023

I’ve said before that when conservative people in red areas begin to see themselves as part of the solution to climate change, rather than the problem, suddenly the whole conversation becomes a lot less toxic.
Right now, despite our hyper polarized left and right, the discussion on clean energy is the most cordial, respectful, and productive conversation across the divide happening anywhere. I know, because I’m engaged in it.

Wall Street Journal:

Republican-leaning states are attracting most of the clean-energy investments spurred by the Biden administration’s signature Inflation Reduction Act, a bill that passed the U.S. Congress without any Republican votes. 

The act, which was signed into law in mid-August, offers beefy tax credits and other support for clean-energy projects ranging from wind farms to factories that make batteries, solar components or hydrogen. The incentives have improved the economics of those projects and helped spark a flood of investment announcements from companies including the solar manufacturing unit of South Korean conglomerate Hanwha Group and Norwegian startup Freyr BatteryFREY 2.16%increase; green up pointing triangle

Those announcements have so far clustered heavily in red states, where makers of components for electric vehicles, batteries, wind and solar equipment have proposed tens of billions of dollars of new investments in locations such as Georgia, Arizona and Texas, according to an analysis by The Wall Street Journal. 

The Journal monitored large manufacturing investments in batteries, solar and wind components announced after the law was passed. Of nearly 30 such announcements where locations were given, all but three had chosen to set up facilities in Republican-leaning states, as defined by the Cook Political Report based on voting during the past two presidential elections. Together, they represent more than $35 billion in potential investments, the Journal found.

Red-leaning areas are also hosting the bulk of clean-power generation projects currently poised to benefit from the new law’s subsidies. Republican-held congressional districts harbor 82% by capacity of all utility-scale wind or solar farms and battery-storage projects that are currently in late-stage development, according to an analysis by business lobby American Clean Power.

Many politicians in those districts have opposed the Biden administration’s renewable-energy and climate push, and none of their Congressional representatives voted for the law. Still, local lawmakers and communities in those districts are welcoming an inflow of green projects, company executives and industry experts say.

In many cases, red-leaning states and districts have attracted companies with conditions and policies seen as business friendly, industry experts say. Those include lower costs for everything from labor and electricity to taxes, as well as looser controls on permitting and the use of land, they say. 

“When it comes to these investments themselves, they tend to be nonpolitical. Everyone supports manufacturing in the United States,” said Scott Moskowitz, head of market strategy for Hanwha’s Qcells U.S. unit, which earlier this month announced it would spend $2.5 billion to expand its Georgia-based solar-panel factory and build a new set of facilities to produce components as well.

Qcells’ factory is in a district held by Rep. Marjorie Taylor Greene, a Republican who has been skeptical about the dangers of climate change and tweeted that the Inflation Reduction Act “forces Americans on the energy disaster Green New Deal.”

Qcells hasn’t spoken to Ms. Greene, but overall the elected officials of both parties welcome its investment, said Mr. Moskowitz: “They might not agree on some of the policy remedies, but they certainly all want us to succeed.” 

Ms. Greene’s office didn’t respond to requests for comment.

Georgia has attracted money “despite the Inflation Reduction Act, not because of it,” said the office of Republican Gov. Brian Kemp—a champion of the state’s clean-energy investment.

Wind and solar-power development has been strong in red-leaning Sun Belt states because many of them get larger amounts of sun and wind, and have more land available than more densely populated, blue-leaning areas such as the Northeast, industry experts say.

“Development follows the resource,” said JC Sandberg, American Clean Power’s chief advocacy officer.

Proximity to those development projects was one reason Qcells decided to expand its solar panel-making facilities in Georgia, said Mr. Moskowitz.

To be sure, other businesses where the new law is expected to spur a flood of investment—such as the deployment of battery-storage facilities or offshore wind—are growing in blue states as well as red. Both Democratic- and Republican-leaning regions are vying for federal support as well as tax credits in another buzzy area: the development of facilities to manufacture and distribute hydrogen, seen as a low-carbon alternative to fossil fuels.

Many of the recently announced manufacturing deals were likely planned before the Inflation Reduction Act became law, and their locations reflect economic and investment trends that have been years in the making, industry experts say. 

Workers and employers have been migrating to red states in the South and Central parts of the country from higher-cost and Democratic-leaning coastal areas, particularly after the pandemic. 

Many companies are expanding in states where they or related companies already had a foothold. In Georgia, recently a recipient of clean-energy deals, Qcells is building on an initial investment it made in the state in 2018. Meanwhile, a spate of battery-manufacturing investments have followed the announcement last May that Hyundai Motor Co. will build a $5.5 billion electric-vehicle factory in Bryan County.

A top concern of many manufacturers, particularly in energy-intensive industries such as battery-making, is the cost of power, said Didi Caldwell, president and founding principal of South Carolina-based project-siting consultancy Global Location Strategies.

Those costs tend to be lower in Southern and Central states such as Republican stronghold Tennessee, where industrial customers were paying an average of 6.89 cents per kilowatt-hour in October, compared with Democratic powerhouses such as California, where businesses were paying almost three times as much, according to the Energy Information Administration.

Manufacturers are also tending to locate in regions where the cost of living and salaries are relatively low, yet skilled employees are available. That has made Southern states popular, said Corinna Frye, head of the U.S. clean-energy team for hiring consultancy LVI Associates. 

Private-industry employers were paying an average of $35.65 per hour in the South—largely red-leaning states—in September, versus $43.84 in the generally Democratic-tending Northeast, according to figures from the U.S. Bureau of Labor Statistics.

The availability of skilled labor was the top reason battery-maker Freyr decided to put its factory in Georgia, said Jeremy Bezdek, the company’s executive vice president of global corporate development and president of the U.S. battery unit.


One Response to “Red States are Big Winners with Biden’s Clean Energy Projects”

  1. rhymeswithgoalie Says:

    “I know, because I’m engaged in it.”

    Thanks for doing this, Peter. I’d get pretty stabby if I had to spend much time around people who believe Red Rant Radio propaganda.

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