The megabill passed last week has sent shockwaves through Washington’s clean energy and manufacturing sectors, with officials warning that it will likely raise electricity costs for households and eliminate thousands of jobs.
While the federal legislation does not directly override Washington’s goal to transition all electric utilities to clean energy by 2045, it makes the work more challenging.
Challenges Ahead
- The new law increases the requirements for developers to claim tax breaks for wind, solar, and other renewable energy projects, and fully eliminates those incentives by 2028.
- New projects must be under construction by the end of the year to qualify for lucrative credits.
- The tax credits, passed by Congress in 2022, have generated $978 million in new private-led investment across seven energy manufacturing facilities in Washington.
Due to the phase-out of these tax credits, an additional $8.75 billion in outstanding investments to 27 facilities in Washington is at risk.
“We have these great programs that are working, and now’s a great time to double down on those absent federal leadership so that we truly are getting to these goals, which we think we can still do,” said James Hove, the Washington state director of Climate Solutions.
Impact on Jobs and Costs
| Year | Estimated Increase in Electricity Costs |
|---|---|
| 2029 | $115 per year |
| 2030 | 21,800 jobs lost in the clean energy and manufacturing sectors |
| 2035 | 9,500 jobs lost in the clean energy and manufacturing sectors |
Homeowners can still qualify for credits of up to 30% of the cost of clean energy home improvement projects through December 31, but making use of those credits will be difficult for Washingtonians who haven’t already started their projects.
“You don’t just on a dime switch things and have those things be reversed,” said Hove. “It’s cheaper … and more sustainable and more resilient to have a grid that’s based around those types of resources.”
Expert Opinions
“This bill is anything but beautiful for Washington. It’s a fossil fuel wish list that penalizes clean energy and favors pollution,” said Washington Gov. Bob Ferguson.
“Clean energy is our greatest opportunity to build an affordable economy in Washington State, with good union jobs for workers and a stronger, more reliable electrical grid. That doesn’t stop today, even if federal leaders strip away support for this vision,” said Climate Jobs Washington, a coalition of labor unions.
Conclusion
The megabill passed last week has sent shockwaves through Washington’s clean energy and manufacturing sectors, with officials warning that it will likely raise electricity costs for households and eliminate thousands of jobs.
While the federal legislation does not directly override Washington’s goal to transition all electric utilities to clean energy by 2045, it makes the work more challenging.
“We’re incredibly grateful to have such a resilient state, and we’re well positioned to still lead on this,” said Hove. “But it certainly does not help to have this bill go through like it did.”
As the situation unfolds, it remains to be seen how Washington will respond to this challenge.
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