The Republican spending bill, signed into law Friday, will reset the course for the U.S. energy sector, analyses show. The law rapidly phases out tax credits for wind, solar, and electric cars, while making it cheaper to drill and mine for fossil fuels on federal lands.
The loss of federal support is expected to curb the buildout of wind and solar by more than 70 gigawatts by 2030, driving up household energy costs by $165 per year, according to a new analysis from Princeton University. The loss of the EV tax credit could lead to roughly 8 million fewer plug-in cars sold this decade, according to an earlier Princeton analysis.
Even before the law was passed, the U.S. was already seeing a drop in renewable investment, owing to fears about the future of tax credits. In the first five months of this year, companies canceled more than two dozen projects, with Republican districts losing some 10,000 expected jobs, according to data from E2.
The gutting of federal support for renewable energy defied the predictions of many experts, who believed that Republicans in Congress would preserve tax credits that supported thousands of new clean-tech jobs, mostly in GOP strongholds. In the end, nearly every Republican voted to eliminate the tax credits, with some driving hundreds of miles to Washington to approve the bill after severe weather grounded flights.
With the law’s passage, the U.S. can now expect emissions to drop by just 3 percent by the end of this decade, according to an analysis from CarbonBrief. The U.S. had previously aimed to cut emissions by 40 percent, under the Paris Agreement, though that goal is now defunct. On his first day back in office, President Trump directed the U.S. to exit the climate pact.
The U.S. now finds itself further at odds with the rest of the world. A new report from energy think tank Ember shows that China, Vietnam, Bangladesh, and other Asian nations are electrifying far faster than the U.S., meaning they are increasingly relying on electricity, rather than oil, gas, and coal, to fuel cars and supply heat. Since 2000, China has doubled the share of electricity meeting its energy needs, while the U.S. has remained stagnant.
Last year, China installed more than half of all new wind and solar globally while attracting three out of every four dollars invested in clean-tech manufacturing. “China will be the world’s first electro-state, the global clean tech hegemon,” said Jesse Jenkins, an energy expert at Princeton. “Especially as the Republican Party forces the U.S. to leave the field of competition uncontested and dig into our role as petro-state.”
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