Manchin-Schumer Climate Deal Would Boost US Cleantech Makers

By Bloomberg

Jul 28, 2022

image is BloomburgMedia_RFQII0T1UM0Z01_29-07-2022_12-18-42_637946496000000000.jpg

A General Electric Co. wind turbine owned by Rural Electric Cooperative Inc. stands in Greenfield, Iowa, U.S., on Wednesday, Sept. 14, 2016. Wind energy, the fastest-growing source of electricity in the U.S., is transforming low-income rural areas in ways not seen since the federal government gave land to homesteaders 150 years ago. Photographer: Daniel Acker/Bloomberg

(Bloomberg) -- The landmark US Senate climate deal announced late Wednesday would boost cleantech manufacturing, a sector that’s struggled to compete with China.

If ultimately approved by Congress, the deal would introduce a tax credit over several years for solar-panel making, batteries, wind-power components and other domestically made goods. Companies poised to benefit include First Solar Inc., the biggest US panel maker, as well as TPI Composites Inc., a maker of wind-turbine blades.

Read: Landmark US climate deal spurs record gains for renewable stocks

“We are heavily reliant upon imported solar products and the supply chain that China’s taken control over,” said Jon Ossoff, a Democratic senator from Georgia, in an interview Thursday on Bloomberg TV. “Solar technology is now a matter of our strategic national interest. We need to be producing these products in the United States.” Ossoff has pushed for domestic manufacturing support.

Disruptive trade fights and supply-chain bottlenecks have underscored the need to diversify materials sources for solar and batteries. The US, after all, is dependent on international markets -- and especially Chinese companies -- for much of their cleantech goods. But manufacturers say they required support to build or expand within the US. That could change with the deal struck Wednesday by Democratic Senators Joe Manchin and Chuck Schumer.

“The bill creates the incentives that make it extremely attractive for developers to buy American,” Nat Kreamer, chief executive officer of Washington-based Advanced Energy Economy, said in an interview Thursday. “This is exactly the industrial policy to be an energy leader in the century.”

Last month, First Solar said it opted against building a new US factory. The reason: uncertainty over trade policy and tax incentives.

(Updates with quote in penultimate paragraph. An earlier version corrected the day of the week.)

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By Brian Eckhouse