Impact of the IRA on U.S. Renewable Energy Manufacturing and Supply Chains

The Inflation Reduction Act was designed to enhance domestic manufacturing and secure domestic supply chains...the bill extended the Clean Energy Tax Credit of up to 30% credit for qualifying investments in wind, solar, energy storage and other renewable projects that meet prevailing wage standards and employ a sufficient proportion of qualified apprentices from registered apprenticeship programs. Plus, a bonus credit of up to 10 percentage points for qualifying clean energy investments in energy communities. The federal tax credit stands at 30% until 2033, then 26% in 2034.

From the onset of the IRA, sections 48C and 45X were lacking in initial guidance and understanding. It took the entire FIRST YEAR for manufacturers to begin to understand if there would be any tax credits or other advantages derived from the legislation.

I [the author] worked with Alexandria Industries, a domestic manufacturer of custom aluminum extrusions, machining, stretch forming, bending, heatsinks, and injection molding...we assembled a team of manufacturing, financial and planning experts and began the process of writing proposals for qualification under 48C. We also leveraged a third-party consulting firm experienced in government programs who had been studying IRA 2022 and had developed an internal team of experts.

After MONTHS of gathering details and studying the proposal guidance, we submitted four individual proposals looking for approval to go to the next step in the process. It was strongly felt that all four proposals included sufficient detail supporting commercial viability, greenhouse gas emissions impacts; strengthening the U.S. supply chains and domestic manufacturing for a net-zero economy; and workforce and community engagement. MONTHS after submittal, we received a negative recommendation for all four proposals based on a “lack of detail.” By program design, the guidelines for submitting proposals limited space, potentially causing the proposals to lack specific detail for approvals.

Another paragraph from the article...

In closer studying Section 45X, the Solar Energy Technologies Office of DOE has issued an UNDERSTANDABLE VERSION of guidance on eligible components and tax credit calculation formulas. This spurred another round of working with a consulting firm to understand if any products Alexandria Industries manufactured could qualify for 45X tax credits.

It took a FULL YEAR for companies to figure out if there was anything in the IRA they could benefit from.

Author Mark W. Turley, MBA, "leads solar market development for Alexandria Industries and is owner of Projected Energy, LLC. He has 45 years of experience in helping manufacturing companies navigate the business landscape, and more than 20 years specializing in the renewable energy market."

He wrote this (I think) to claim the Inflation Reduction Act is a great thing for renewables, but he is damning with faint praise. But the parts I highlighted above show exactly why the federal government screws up EVERYTHING it does and touches. Imagine the tens of millions (hundreds of millions?) of dollars wasted doing the completely non-productive work Turley describes above. Teams of "manufacturing, financial and planning experts" were required to write the proposal. All of these experts are probably making north of $150k to $200k per year.

In the meantime, Musk, unencumbered by the GD government and this crap, working in the capitalist free market, builds the world's greatest space company and is launching rockets at unprecedented rates.

I posted this article to show how badly the FedGov wastes private sector money, how it skews the economy, how it drains precious and limited resources on nonproductive work, to show how many hoops you have to jump through to get some of the federal largess, how long it takes to get an answer from that Byzantine behemoth, how your first answer will be "NO!" and then how you have to repeat the whole process to get to "Yes."

As you might suspect, I had a couple of personal experiences with the Department of Energy in my career and I thoroughly HATED working with FedGov and seeing this clown show up front and personal.

“I posted this article to show how badly the FedGov wastes private sector money, how it skews the economy, how it drains precious and limited resources on nonproductive work”

That’s part of the problem. The other part of the problem is that the action of the bill, has absolutely nothing to do with the name of the bill. The inflation reduction act, was the ‘green new deal’ with no real target of helping American manufacturing or supply chains. Further, it dumped money into an inflation economy, making it worse. Frankly, it was a horrible idea that backfired and has critically hurt a young generations ability to get a house, buy food, or insurance. However, it did help out specific Democrat donors and the Chinese.

You got it! That statement you quoted is ludicrous and preposterous.

U.S. manufacturers should view the renewable market as a stable and promising opportunity. The sector, and individual company growth, will depend on expanding manufacturing capacity, improving efficiency, and maintaining high quality standards.

The sector depends on one thing only: federal money. The author is going to die from all the Kool Ade he drank. And to think how many millions of people make a living from this scam.

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