Federal tax credits from the Inflation Reduction Act are fueling big growth in Tennessee's battery supply chain.

The Volunteer State has become a major hub in battery production with 11 manufactures in the state. For example, in Clarksville, LG Chem is investing $1.7 billion in a facility to produce cathode materials for electric-vehicle batteries.

Xan Fishman, energy program senior managing director for the nonprofit think tank Bipartisan Policy Center, said clean energy tax credits are driving investments in Tennessee's battery industry.

"We've really seen a resurgence in battery manufacturing in the U.S., and in Tennessee in particular, with factories coming online," Fishman pointed out. "It's a sector that has been dominated by China."

The Volunteer State has attracted more than $5 billion in clean energy investments and created 6,700 jobs since 2022. Major developments include the McKellar Solar Farm in Madison County, which helps power Meta's Gallatin data center and the Sequoyah Nuclear Plant near Soddy-Daisy.

Fishman warned the "One Big Beautiful Bill" would gut key federal tax credits supporting the battery supply chain from EV incentives to energy storage and critical mineral processing. He noted electricity and energy needs are on the rise and the tax credits ensure the energy supply can keep up.

"If we don't keep up with that growing demand, the result is going to be that electricity prices go up," Fishman cautioned. "Preserving these tax credits is going to be really important for energy affordability and energy reliability, because we know we all need energy for our lives."

Fishman argued repealing clean energy tax credits could cost U.S. jobs and stop new manufacturing. He added China already controls more than 90% of critical minerals and could raise prices any time. He hopes Tennesseans will work with Congress to protect clean energy tax credits, jobs and U.S. battery manufacturing.

More than $7 billion in Colorado's GDP and 9,600 jobs are projected to be lost under President Donald Trump's signature tax and spending bill which cuts incentives for clean energy, according to a new report by the nonpartisan think tank Energy Innovation.

Solar and wind capacity is expected to drop by 340 gigawatts, raising home energy costs by an extra $170 per year.

Margaret Kran-Annexstein, director of the Colorado chapter of the Sierra Club, said the new law reverses years of work transitioning to a clean energy economy.

"We have seen how investments in clean energy programs can attract more jobs, and can help people lower their electricity costs," Kran-Annexstein pointed out.

Trump campaigned on promises to end climate mitigation efforts and to bring down energy costs by increasing the use of fossil fuels. Republicans critical of clean energy tax credits have argued they amount to the government picking industry winners and losers. According to a separate industry analysis, just 30% of U.S. solar and 57% of wind projects are expected to survive under the new GOP law.

Oil and gas companies have benefited from taxpayer subsidies for decades and currently receive $170 billion a year. Kran-Annexstein noted efforts to boost clean energy, to slow climate change and reduce air pollution, pale by comparison.

"This bill is going to be giving polluters an additional $15 billion tax break, while gutting clean energy programs," Kran-Annexstein explained. "We need to be investing in solutions, and we also need to not be giving tax breaks to the companies that are causing these problems."

The new GOP law cuts more than $1 trillion from Medicaid and SNAP to finance Trump administration priorities including extending 2017 tax cuts. Kran-Annexstein worries ramping up fossil fuel production and limiting health coverage will produce dire consequences.

"If we're revoking people's access to health care, and we're going to be seeing increases in the amount of pollution, people are going to be sick and people are going to die," Kran-Annexstein contended.

Despite last-minute concessions in the Trump administration's budget, which removes alternative energy tax incentives, rural Alaska power providers now face huge obstacles to distributing power to the most rural and isolated parts of the state.

Investments in wind and solar power now face an uphill battle. Alaska's extreme weather and challenging geography already make power generation difficult and expensive. Now, with fewer incentives to diversify, the state's most isolated places will be forced to continue relying on fossil fuels for their electricity.

Pierre Lonewolf, board member of the Kotzebue Electric Association, said the loss of tax incentives means critical alternative energy programs are dead in the water.

"That has put the kibosh on our wind projects, which we are partnering with the local tribe to install two more megawatt wind turbines, another megawatt or so of solar," Lonewolf explained.

Sen. Lisa Murkowski, R-Alaska, voted for the budget bill but only after she worked to secure some alternative energy tax incentives and funding for Native whale hunters back into the measure in the debate's eleventh hour.

Lonewolf added village and tribal members have worked to move away from diesel fuel for power generation and said a lack of incentives to diversify to wind and solar will fall directly on rural Alaska's consumers who need affordable power to heat their homes.

"We don't want to have to raise our prices on electricity but we have to cover our costs to pay our people," Lonewolf acknowledged.

Kotzebue is a gateway for the diesel fuel powering 10 villages in rural Alaska. What Lonewolf called a war on renewable energy will only cause prices to keep rising in parts of the state that can least afford it.


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Renewable energy got short shrift in the budget bill passed by Congress last week and a New Mexico trade association said companies and their employees will suffer.

The bill quickly phases out tax incentives and investments for wind and solar power passed under the Biden-era Inflation Reduction Act.

Jim DesJardins, executive director of the Renewable Energy Industries Association of New Mexico, said both consumers and businesses in the solar industry have made huge investments due to the incentives.

"There's people who've got loans on their homes, and overnight this bill is going to pull the rug out from underneath them," DesJardins asserted. "This will destroy thousands of businesses, will put tens of thousands of people out of work, for what? Why are we doing this?"

Since passage of the Inflation Reduction Act in 2022, a boom in renewable energy has led to more than $300 billion in spending. Another $500 billion dollars was allocated for clean energy projects but those could now be abandoned.

New Mexico is the second-largest crude oil producer in the U.S. and with more than 300 days of sunshine, it is considered among the top 10 states for potential solar development. Most experts are not predicting a collapse in the renewable energy industry but without federal subsidies and tax credits, solar and wind farms could become more expensive.

After signing a contract, DesJardins pointed out it can take years to get a solar project off the ground and Trump's new bill would let incentives expire before the end of 2027.

"There's just so much uncertainty for a large solar project you can't say, 'Oh, we're going to put it into operation on this day.' It just doesn't work like that," DesJardins stressed. "We need to stop this herky-jerky way of doing policy whether it's for farmers, whether it's for renewable energy, it's just very counterproductive."

Despite the setback to wind and solar, DesJardins believes renewable industries will persevere, one way or another.


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