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After President Biden's withdrawal from the race on July 21st, Vice President Kamala Harris is now the new Democratic Party standard-bearer and as of today is extremely likely to receive the Party's nomination at next month's convention. Such a late shift at the top of a major party ticket - much less the incumbent ticket - is unprecedented, and a lot will evolve over the coming weeks as more of Harris' policy stances are made clear. Until then, we can look at Harris' efforts as Vice President and her stances in the 2020 election as a leading indicator of solar policy under a potential Harris Administration.
“Since taking office, our administration has made the largest investment in solar energy in our nation’s history.’' - Vice President Kamala Harris, Atlanta, 2023
It's important to remember that the IRA would not have been passed without an active Harris. As the President of the Senate (part of her duties as Vice President), Harris lodged the decisive, tie-breaking vote that resulted in the 51-50 Senate vote that passed the Inflation Reduction Act. She has since praised the Inflation Reduction Act repeatedly and in many places including Washington and New York and touted it as one of the landmark successes of the current Administration. Simply put, it is highly unlikely she would come out against the law.
Rather, in Harris, climate supporters may find an even stronger champion than Biden. Looking at her stances during the 2020 Presidential cycle, it's clear that Harris viewed climate as one of her tentpole issues. Her background as California Attorney General saw her investigate and sue companies like BP, Phillips 66/ConocoPhillips, and ExxonMobil. She has been an advocate for and the original co-sponsor (while in the Senate) of the Green New Deal, a 10-year blueprint for 100% clean energy, and she has previously called for a "climate pollution fee" and the creation of an independent Office of Climate and Environmental Justice Accountability. When Harris ran for office in 2020, her climate plan called for a $10 trillion increase in spending over a decade as well as a price on carbon. Harris also supports the Paris Climate Agreement and has said she will make the climate crisis a top national security priority, which suggests that if Congress supports her priorities - and that's a big if - climate may even see a boost.
Again, such a late change is unprecedented and reduces the amount of time in which deeper discovery of her stances and differences from the current Administration's policies can be exposed, but as of today, it seems safe to say that a Harris Administration would be a supporter of the IRA and other climate initiatives.
Solar has been on a tear, adding a record-breaking 32.4 GW and holding its place as the incremental market share winner in new installations in 2023. Solar now accounts for 53% of all new electricity generation capacity due to both lower prices and federal incentives. During a fresh presidential cycle, federal incentives, in particular, can become headline news.
“The Inflation Reduction Act is supercharging solar deployment and having a material impact on our economy, helping America’s solar module manufacturing base grow 89% in 2023. We must protect and optimize the policies that are driving these investments and creating jobs, and the stakes in the upcoming election couldn’t be higher,” said SEIA president and CEO Abigail Ross Hopper in a March 2024 press release.
As of today, the 2024 U.S. presidential election is a toss-up, with former President Donald Trump holding a slight lead over President Joseph Biden. With only a few months until the November election, it is important to lay out what’s at stake for solar under the next administration.
Biden directly supported solar and renewables via the 2022 passing of the Inflation Reduction Act (IRA), which pledged $369 billion in tax breaks and subsidies for promoting clean energy, reducing greenhouse gas emissions, and investing in sustainable infrastructure. Read our extensive article on what the IRA means for solar and how you can benefit.
Trump was largely uninvolved with solar during his time as president, though he did introduce a four-year, 30% tariff on imported solar modules in 2018 to encourage domestic manufacturing. This tariff was extended by the Biden administration in 2021, indicating bipartisan support.
This fall, the lines could be redrawn. What might a change in administration mean for the IRA and tariffs, and how could it affect solar adoption in the U.S.?
Though Trump largely left solar unaddressed during his administration, on the campaign trail, he and his supporters have become critics of aspects of the IRA. “Some of the price tags involved with some of these credits seem to be wildly understated,” a senior Trump campaign official told the Financial Times. “We’d be looking to cut a lot of that spending.”
Trump has indicated that he would seek to dismantle many of the policies and programs established under the IRA and cut those budgets significantly if reelected. However, he has primarily attacked tax credits for EVs and batteries as well as wind farms, which he incorrectly claims kill birds and whales. Tom Pyle, a Project 2025 contributor who was on Trump’s Department of Energy transition team, also said the former president is not as opposed to solar energy as he is to wind projects.
Consequently, while the IRA is frequently in the headlines, only certain parts of the bill are hot topic issues. For instance, a second Trump administration could hinder EV growth by rolling back pollution regulations or changing Treasury Department rules around EV tax credit eligibility, but a full repeal of the IRA seems unlikely.
U.S. solar tariffs began in 2012 with duties on Chinese solar cells to counter unfair trade practices. The tariffs expanded in 2015 to include solar modules from China and solar cells from Taiwan. In 2018, the U.S. implemented a 30% tariff on all foreign module imports, decreasing annually at 5% for four years.
By 2021, less than 1% of direct imports of solar cells were from China due to Chinese companies shifting manufacturing to Southeast Asian countries (Cambodia, Malaysia, Thailand, and Vietnam) to circumvent tariffs. Local Southeast Asian companies also set up solar module production to capitalize on a market opportunity, resulting in the majority of U.S. solar modules being sourced from this region at similarly low prices.
The Biden administration has been caught between two conflicting priorities: continue importing cheap solar modules to enable the U.S. solar transition or double down on tariffs to accelerate domestic production. So far, Biden has pursued a delicate balance. After extending the Trump-era tariffs on imported solar modules in 2021, he issued a two-year pause on new tariffs the following year to support adoption of the clean energy source.
Since the pause ended in June 2024, tariffs have risen to 50% for modules from China. Additional tariffs on various Southeast Asian manufacturers are also under consideration as domestic companies continue to compete with a flood of Chinese and Southeast Asian panels in the global market. It is unclear whether Chinese companies that have set up manufacturing in Southeast Asia will incur additional tariffs.
“In the 21 years I’ve been at the company, as we’ve changed administrations and we’ve seen changes in Congress, we’ve never seen a change or a repeal of tax credits, no matter what form they’ve taken,” said John Ketchum, CEO of renewable-focused utility company NextEra Energy, in an earnings call in January 2024.
The IRA is an act of Congress and is law.
To repeal the IRA completely is an uphill battle, as both the House and Senate would need to expend significant political capital to roll it back. Current projections from the Hill show a toss-up between the parties in the House and a likely majority for Republicans in the Senate. But inertia and precedent are powerful tools. Although no Republicans voted for the IRA, many of its provisions have GOP support, as noted by Rep. Andrew Garbarino (R-N.Y.), co-chair of the bipartisan Climate Solutions Caucus. As of now, both parties also have higher-priority topics to address.
Given this electoral uncertainty, it is important to remember the IRA’s merits. Reports indicate that the IRA has catalyzed hundreds of billions of dollars in private investments, potentially creating nearly 200,000 jobs. Notably, Republican states account for 58% of the projects announced under the IRA, Democrat states 32%, and swing states 10%, according to Fidelity.
When looking at congressional districts that have invested the most in solar since the passage of the IRA, eight of the top 10 are Republican, ranging from $721 million to $1.1 billion in estimated actual investments each. Announced investments also mirror this trend. According to Ketchum, much of the investment driven by the IRA has benefited Republican districts, which means unpicking the legislation would risk harming GOP constituencies.
Without full congressional support, and given the aforementioned investment considerations, a change in administration will likely only stymie and delay certain parts of the IRA's implementation through bureaucratic obstacles rather than guarantee a repeal.
Scrapping the IRA would imperil significant investments and jobs. And Republicans don’t appear particularly opposed to solar tax credits, indicating a nuanced stance on clean energy incentives. Moreover, for solar developers, IRS rules dictate that the credits would remain available for projects that start construction by 2030, reducing the risk of uncertainty.
The IRA has been wildly successful for solar so far — domestic production is skyrocketing, and installations are at an all-time high and accelerating. As we approach the November elections, given the uncertainty around future policy changes, now is the most opportune time to take advantage of current policies, lock in significant cost savings, and boost property values.
Navigating the solar transition can be a daunting process. It involves selecting the ideal location, picking the right vendor, understanding all the tax incentives, and following federal and state-specific regulations. SolarKal has the necessary experience and expertise in the commercial solar energy space to deliver the best returns for our clients and optimize their outcomes. If you’re interested in learning more about how your organization can leverage solar to make progress on its sustainability goals while saving thousands of dollars annually, get in touch with a SolarKal solar advisor today.
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