Policy & Regulation

New report shows IRA benefiting red states most; Michigan leads in new projects

New report shows IRA benefiting red states most; Michigan leads in new projects
Two technicians walk through a Duke Energy solar installation in North Carolina (courtesy: Duke Energy)

A new report issued by the national nonpartisan business organization E2 indicates Southeast states and Republican congressional districts are benefiting the most from the Inflation Reduction Act (IRA), which turns two years old this month.

At least 118 new clean energy projects have been announced in the IRA’s second year, and they’re expected to generate more than $40 billion in new investments and create a minimum of 34,600 jobs. If completed, all 334 projects announced since the signing of the IRA would create nearly 110,000 new jobs and bring a minimum of $126 billion in direct private investment to 40 states, according to E2’s Clean Economy Works: IRA Two-Year Analysis.

Based on publicly available information analyzed by E2, more than 110 major clean energy and clean vehicle factories and other projects – 55 in South Carolina and Georgia alone – are in development or have already broken ground in the 10-state Southeastern region. About 60 percent of all IRA-related clean economy projects – and 85 percent of total private-sector investments announced so far – have gone to Republican congressional districts, despite the fact that no Republican member of Congress voted in favor of the IRA. 19 of the top 20 congressional districts for clean energy investments are held by Republicans.

States with the most announced projects include MI, GA, SC, TX, NC, OH, TN, CA, NY, IN, and AZ.

An overview of E2’s interactive, searchable map of renewable energy projects announced since the passage of the IRA (courtesy: E2)

According to the E2 analysis, Michigan leads the country in post-IRA clean economy announcements, with 30, including a dozen in the past year.

“Michigan has arguably benefited from the IRA more than any other state, and that’s certainly been our experience here in Jackson County. It feels like clean energy is at a tipping point – and the IRA is an accelerant,” said Lucas Olinyk, president of Jackson, Michigan-based Harvest Solar. “The IRA has been a strong tailwind for our business these past two years. As interest in solar has grown, we’ve expanded our customer base to include farm and agricultural projects, utility-scale projects as well as residential and some large commercial rooftops.”

Georgia, South Carolina, Texas, and North Carolina rounded out the rest of the top five, in order.

“What I’m seeing in my work is a broadening of the economic benefits of the energy transition,” noticed Ajulo Othow, founder and CEO of Oxford, North Carolina-based clean energy developer EnerWealth Solutions. “Whether it’s a minority landowner in the South who leverages a solar development to help keep her farm in the family for another generation, or a factory that creates thousands of jobs for young people, the IRA is helping generate real economic growth that improves lives, ties communities together and grows small businesses.”

40 states are home to at least one major new clean energy project and three-dozen states are home to at least two. Five states are home to 20 or more projects: Michigan, Georgia, South Carolina, Texas, and North Carolina. Six additional states are home to at least 10 projects: Ohio, Tennessee, California, New York, Indiana, and Arizona.

Clean vehicles accounted for more than a third of all projects announced within the past year, with 45 projects announced. Electric vehicle and battery companies shared the most announcements, amounting to $81 billion across 152 projects.

Foreign companies announced nearly half (160) of all projects, bringing overseas investments to the United States and creating new made-in-America jobs – a stark contrast to the historic trend of manufacturing and clean energy jobs leaving the country for foreign shores, says E2. South Korean companies announced the most projects – about three dozen in the past two years. Companies based in Michigan and California led announcements from U.S.-based companies, with 22 each.

Other highlights:

  • Manufacturing has accounted for 254 of the projects in the IRA’s two-year history, representing more than 90 percent of all investments and jobs announced.
  • The top congressional districts for clean energy investments are North Carolina’s 9th district with nearly $9.9 billion, represented by Republican Rep. Richard Hudson; Georgia’s 11th congressional district with $6.6 billion, represented by Republican Rep. Barry Loudermilk; and Nevada’s 2nd congressional district with $6.6 billion, represented by Republican Rep. Mark Amodei.
  • The top congressional districts that would see the largest clean energy employment growth from new clean energy projects are North Carolina’s 9th district with 5,660 estimated jobs, represented by Republican Rep. Barry Loudermilk; Nevada’s 2nd congressional district with 5,050 jobs, represented by Republican Rep. Mark Amodei; and South Carolina’s 2nd congressional district, represented by Republican Rep. Joe Wilson.
  • The congressional districts that are home to the most projects announced are: Ohio’s 9th congressional district with eight projects, represented by Democratic Rep. Marcy Kaptur; Georgia’s 1st congressional district with six projects, represented by Republican Rep. Earl Carter; North Carolina’s 9th congressional district with six projects, represented by Republican Rep. Richard Hudson; and South Carolina’s 5th congressional district with six projects, represented by Republican Rep. Ralph Norman.

But will it last?

Last week, the U.S. Department of the Treasury released new data from the IRS and a fresh analysis by the Office of Economic Policy demonstrating that more than 3.4 million American families benefited from $8.4 billion in Inflation Reduction Act tax credits in 2023. Despite its measured success, there have been more than 40 attempts in the U.S. House to roll back or reduce parts of the IRA, and there are fears a second Donald Trump presidency will unwind many of the benefits of the legislation. Those sentiments were echoed in a letter addressed to House Speaker Mike Johnson signed by 18 Republican members of Congress urging him not to repeal the IRA.

“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,” reads part of the letter. “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 would create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return.”

Bob Keefe, executive director of E2, warns against tampering with the legislation in his organization’s latest report.

“What the numbers show is that we’re at the advent of the biggest U.S. economic revolution in generations – and it’s all because America finally decided to do something about climate change and clean energy with the IRA,” he says.

“If clean energy opponents roll back or repeal the IRA, it’s not folks in San Francisco or New York City who are going to get hurt. It’s workers and communities in places like Michigan, Georgia, the Carolinas and other states.”