The Inflation Reduction Act (IRA) represented a milestone in U.S. industrial policy that transformed the clean energy manufacturing landscape in the United States. Two of the principal goals of the IRA were to onshore clean energy manufacturing and to make supply chains more resilient to geopolitical shocks. This article presents data for the solar and battery supply chains to assess what progress had been made toward these goals before the passage of the One Big Beautiful Bill Act called many IRA provisions into question. The results reveal significant successes, but also persistent challenges, in building these supply chains. While the U.S. was slated to produce 61% of expected solar module demand in 2025, it would have produced only 37% of the cells and 11% of the ingots and wafers needed for those modules. In batteries, the U.S. could have realistically produced 100% of expected cell demand in 2025, but announced projects accounted for only 47% of the cathode, 23% of the anode, and 24% of the precursors. U.S. supply would have slightly increased as a percent of expected demand in 2030, but the situation would have remained broadly the same. There are four implications of the analysis. First, it demonstrates the difficulties of onshoring, especially in upstream components. Second, it shows that expected U.S. production would have, rather than exclude other countries, created global demand-pull. Third, it reveals that Biden’s tariffs would have likely increased the cost of U.S.-made panels and cells. We propose an alternative policy instrument.

Read original article

Read original article