Republican-leaning states are attracting most of the clean-energy investments spurred by the Biden administration’s signature Inflation Reduction Act, a bill that passed the U.S. Congress without any Republican votes.
The act, which was signed into law in mid-August, offers beefy tax credits and other support for clean-energy projects ranging from wind farms to factories that make batteries, solar components or hydrogen. The incentives have improved the economics of those projects and helped spark a flood of investment announcements from companies including the solar manufacturing unit of South Korean conglomerate Hanwha Group and Norwegian startup Freyr Battery FREY -0.96%decrease; red down pointing triangle.
Those announcements have so far clustered heavily in red states, where makers of components for electric vehicles, batteries, wind and solar equipment have proposed tens of billions of dollars of new investments in locations such as Georgia, Arizona and Texas, according to an analysis by The Wall Street Journal.
[That may be because it’s easier to start businesses in red states than it is in blue states. If you want to open a business in California, as one example, that manufactures or assembles this kind of equipment — and all of the environmental challenges they pose — it takes years to get all of the approvals in place. Red states mostly streamline those processes in order to build their employer and tax bases. — Ed]
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