The Associated Press//July 25, 2023//

By Isabella O鈥橫alley and Michael Phillis
The Associated Press
FRANKFORT, Ky. 鈥 On a recent day under the July sun, three men heaved solar panels onto the roof of a roomy, two-story house near the banks of the Kentucky River, a few miles upstream from the state capitol where lawmakers have promoted coal for more than a century.
The that聽passed one year聽ago offers a 30 percent discount off this installation via a tax credit, and that鈥檚 helping push clean energy even into places where coal still provides cheap electricity. For Heather Baggett鈥檚 family in Frankfort, it was a good deal.
鈥淔or us, it鈥檚 not politically motivated,鈥 she said. 鈥淚t really came down to financially, it made sense.鈥
On Aug. 16, following the hottest June ever recorded聽in the U.S. and a scorching July, the nation鈥檚 long-sought response to climate change, the Inflation Reduction Act, will turn one year old. It has prompted investment in a massive build-out of battery and electric vehicle manufacturing across the states. Nearly 80 major clean energy manufacturing facilities have been announced 鈥 an investment equal to the previous seven years combined, according to the American Clean Power Association.
鈥淚t seems like every week there鈥檚 a new factory facility somewhere鈥 being announced, said Jesse Jenkins, a Princeton professor and leader of the REPEAT Project, which has been deeply involved in analysis of the law.
鈥淲e鈥檝e been talking about bringing manufacturing jobs back to America for my entire life,鈥 he said. 鈥淲e鈥檙e finally doing it, right? That鈥檚 pretty exciting.鈥
The IRA is the nation鈥檚 most significant response to climate change, after decades of lobbying by oil, gas and coal interests stalled action and carbon emissions climbed, creating a hotter, more dangerous world. It is designed to spur clean energy development on a scale that will bend the arc聽of U.S. greenhouse gas emissions. It also aims to build domestic supply chains to reverse early domination of this vital sector by China and other nations.
One target of the law is transportation 鈥 the largest source of climate pollution in the U.S. Siemens, one of the biggest tech companies in the world, produces charging stations for EVs. Executives say this alignment of U.S. policy on climate is driving higher demand for batteries.
鈥淲hen the federal government makes an investment, we get to the tipping point faster,鈥 Siemens USA CEO Barbara Humpton said, adding that the company has invested $260 million in battery or battery storage projects in recent years.
The law also encourages use of more such batteries that feed electricity to the grid when the wind is slack, or at night when the sun isn鈥檛 hitting solar panels. It could put the storage business on the same upward trajectory that solar blazed a decade ago, said Michael McGowan, head of North American infrastructure private markets for Mercer Alternatives, a consulting firm.

Derrick Flakoll, North America policy associate at Bloomberg NEF, pointed out that sales for the largest manufacturer of solar panels in the U.S., First Solar, skyrocketed after the law passed and created a big backlog of orders.
鈥淭his is years and years of manufacturing capacity that is already booked out because people are bullish about the U.S.-produced solar market,鈥 he said.
The IRA is also helping technologies that are expensive but promising for near-term decarbonization.
Jason Mortimer is senior vice president of global sales at EH2, which makes large, low-cost electrolyzers 鈥 machines that split hydrogen from water. is聽still in its infancy.
鈥淭he IRA accelerates the implementation of hydrogen at scale by about four to five years,鈥 making the U.S. competitive with Europe, he said.
But these changes, significant as they are, may just be the beginning, experts say.
鈥淚 think we鈥檙e about to see a quite a flood of investment in wind and solar-related manufacturing in the U.S.,鈥 Jenkins said, adding that 2026 to 2028 is when the country will see the law鈥檚 full impact.
Other countries, some of them ahead of the U.S. in addressing climate change, have enacted their own further efforts to speed the changeover to clean energy. Canada has announced a matching policy and Europe has its own measures 鈥 like those in the IRA 鈥 to attract manufacturing.
鈥淓uropean and Japanese automakers are trying to think about how to change supply chains in order to try and compete,鈥 said Neil Mehrotra, assistant vice president and policy advisor at the Federal Reserve Bank of Minneapolis and contributor to a report about the U.S. law published by the Brookings Institution.
The Congressional Budget Office initially estimated the IRA鈥檚 tax credits would cost about $270 billion over a decade, but Brookings says businesses might take advantage of the credits far more aggressively and the federal government could pay out three or four times more.
The law is supposed to reduce the emissions of the U.S. 鈥 the country most responsible for greenhouse gases historically 鈥 by as much as 41 percent by 2030, according to a new analysis by Princeton researchers. That鈥檚 not enough to hit U.S. goals, but it is a significant improvement.
But those crucial greenhouse gas cuts are partially at risk if the U.S. electric grid cannot grow enough to connect new wind and solar farms and handle new demands, like mass vehicle charging.
Despite the new investment in red states, not everyone likes it. Republicans recently proposed repealing major elements of the law. And Frankfort resident Jessie Decker, whose neighbor has solar panels, said he wouldn鈥檛 consider them, and doesn鈥檛 think the federal government should be 鈥渨asting money鈥 on dubious climate programs.
Nor does the law mean climate-warming oil and gas are going away.
鈥淔rankly, we are going to be using fossil fuels for many decades to come,鈥 said Fred Eames, a regulatory attorney with the law firm Hunton Andrews Kurth.
Up on Baggett鈥檚 roof, Nicholas Hartnett, owner of Pure Power Solar, is pleased that business is up, and homeowners are welcoming solar once they see how they can benefit financially.
鈥淵ou have the environmental side, which handles the left, and then you have the option to use your own tax money that the government would have otherwise taken, which gets the right checked off,鈥 he said.