by Liam Niemeyer, Kentucky Lantern
A solar industry group is warning that Kentucky stands to lose out on thousands of jobs in manufacturing solar energy components and batteries if clean energy tax credits are cut short under a mega-bill moving through Congress.
An analysis published in late May by the nationwide Solar Energy Industries Association (SEIA) says Republican-led efforts to curtail or sunset tax credits would cost more than 300,000 jobs across the country and sacrifice hundreds of billions of dollars of investment through the end of the decade. Some of the credits are technology neutral but benefit solar and battery manufacturing industries.
The U.S. House has approved the spending and tax bill, dubbed the “big, beautiful bill” by President Donald Trump. It is now under consideration by the U.S. Senate. Republicans are using a process called reconciliation to move the bill with a simple majority of votes in the Senate, rather than the three-fifths majority usually required in the upper chamber. That means the package could become law without any Democrats’ votes.
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The bill as it came out of the House would accelerate the phase down of tax credits benefiting clean energy production, low-emission hydrogen fuel production, components for renewable energy, carbon capture technologies and the purchase of electric vehicles. These tax credits were created under the Inflation Reduction Act in 2022 and championed by the former Biden administration. A States Newsroom analysis found the tax credits primarily benefitRepublican-controlled states.
In Kentucky, where solar and battery manufacturing industries are growing though at a slower pace than in other states, the Solar Energy Industries Association estimates about 3,300 existing and potential jobs could be lost.
Brenden Frazier, a board member for the advocacy organization Kentucky Solar Energy Society, said the sunsetting of tax credits could hamper the residential solar industry in the state. He said recent “Solarize” campaigns, in which cities encourage residents to adopt solar energy in their homes and businesses, show the incentives are having a “big impact” in terms of growing the industry in Kentucky.
He said he worries about sustaining the business without the incentives. Frazier serves as the director of product and technology for the Puerto Rico-based solar panel manufacturer SOLX.
Frazier said the loss of tax credits would set back solar and battery manufacturing as Kentucky, like much of the rest of the country, faces growing energy demands from prospective data centers coming onto the electricity grid.
While the amount of electricity generated through solar energy in Kentucky is miniscule, the state has seen an influx of solar developers interested in setting up utility-scale solar installations. A Canadian company also announced last year it was investing over $700 million in a Shelby County manufacturing plant to build utility-scale battery storage systems.
Republicans supportive of ending the tax credits have argued they are too expensive and that incentives give renewable energy an unfair advantage over fossil fuel production.
Republican Kentucky U.S. Rep. Brett Guthrie in a Wall Street Journal op-ed in May said the reconciliation legislation would end spending on “Green New Deal-style waste” and “reverse the most reckless parts of the engorged climate spending in the misnamed Inflation Reduction Act.”
Matt Partymiller, the president of the Kentucky Solar Energy Industries Association, told the Lantern the accelerated phase down of the tax credits is a “real threat to manufacturing jobs” and to the United States’ ability to compete with China on solar energy.
“We just started onshoring U.S, manufacturing of solar in earnest in the past couple of years,” Partymiller said. “A lot of these incentives are really tied to that, and if they go away, I think this whole manufacturing industry that was just created largely stops with it.”
Solar panel manufacturers across the country have significantly ramped up production in recent years to meet a boom in utility-scale solar energy development, producing enough solar panels to generate nearly 52 gigawatts of electricity. China has historically controlled much of the world’s solar panel production as the country has subsidized production.
The U.S. Senate will likely change the version of the reconciliation bill that passed the U.S. House in May.
Kentucky Lantern is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: [email protected].
