At the end of May, the U.S. House narrowly pushed through a budget and tax bill that took a sledgehammer to clean energy tax credits. These include the Section 45X Advanced Manufacturing Production Tax Credit, which encourages the domestic manufacturing of components for the clean energy supply chain, the Section 45Y Clean Electricity Production Credit and Section 48E Clean Electricity Investment Credit, which benefit solar and wind projects, the Section 30D Clean Vehicle Tax Credit, which connects consumers with lower costs for electric vehicles if their battery components are produced or sourced domestically, and the Section 25D Residential Clean Energy Property Credit, which helps households install solar and other technologies to lower their electricity bills. The Clean Economy Tracker has collected data about what the House reconciliation bill would mean for South Carolina if passed in its current form.
Section 45 X and Section 30D
Since 2022, South Carolina has welcomed more than $15.7 billion in clean manufacturing investments and created 19,246 associated jobs. These investments have bolstered South Carolina’s battery and electric vehicle sectors. For example, Redwood Materials is investing $3.5 billion to recycle, refine, and remanufacture batteries, the single largest investment in the state when it was announced in 2022. Currently under construction, the factory will create 1,500 jobs, accounting for one-third of the total unemployment in Berkeley County. AESC is building a $1.62 billion electric vehicle battery manufacturing plant and creating 1,620 new jobs, equivalent to one-quarter of the unemployment in Florence County. Scout Motors is constructing a $2 billion electric vehicle manufacturing facility, which will employ at least 4,000 people, covering more than half of the unemployment in Richland County, and will compensate 30% to 40% more than the average disposable income. Last year, EnerSys announced a $500 million investment in a battery manufacturing factory that will create 500 jobs, marking the biggest capital investment and job creation project in Greenville County. Meanwhile, Birla Carbon announced a $1 billion investment in a minerals processing facility, employing 124 people in Orangeburg County and providing them with training and childcare subsidies.
Other clean manufacturing sectors have also attracted investment in the state. Silfab Solar is building a $150 million solar manufacturing plant that will create 800 jobs with an annual payroll of over $48 million. It will also generate $4.7 million in property taxes for York County and $17 million in property taxes for Fort Mill Schools. This year, Eaton announced a $340 million investment in a transformer manufacturing plant that will create 700 jobs, and the company is currently working with readySC and regional schools to prepare for hiring and training.
The House reconciliation bill would phase out the Advanced Manufacturing Production Tax Credit for wind components after 2027 and all other components after 2031, and would repeal the Clean Vehicle Tax Credit after 2025. Many of the above facilities would qualify for the manufacturing credit or help meet demand for domestically-sourced critical minerals spurred by the clean vehicle credit. But, they may not proceed if these credits are scaled back, jeopardizing local job creation and community investments.
Photo Courtesy Scout Motors
Section 45Y and Section 48E
South Carolina currently has 13.49 GW of operating clean power capacity and 0.14 GW of solar photovoltaic capacity under construction. The state also has plans for an additional 2.16 GW of solar and battery projects. A highlight is the 249 MW Kingstree East 230 Solar Project in Williamsburg County, one of two Ingka Group-funded projects in the region that will generate $7.6 million in local property tax revenue. Silicon Ranch’s 250 MW Lambert Solar Farm in Georgetown County has already created 200 jobs and contributed $20,000 monthly to local businesses during construction, with another 200 jobs possible in the next phase. Meanwhile, May Renewables has invested $70 million to bring 100 MW of solar and 100 MW of battery storage to Orangeburg County.
The House reconciliation bill would phase out both the Clean Electricity Production Tax Credit and the Clean Electricity Investment Tax Credit after 2028, to be finished before 2032. However, eliminating the Section 45Y and Section 48E tax credits would diminish companies’ ability to build and produce clean energy, jeopardizing these projects and the associated construction and operations jobs. It would hurt Republican districts in particular, which are home to 79% of the clean energy projects in the state. It would also diminish the state’s ability to meet electricity demand, which is projected to rise by 25% by 2035.
Photo Courtesy Silicon Ranch Corporation
Section 25D
South Carolina’s more than 300 MW of installed rooftop solar, the twenty-second most in the country, is also a testament to its clean energy transition. With the Residential Clean Energy Credit, EnergySage expects the average South Carolinian to save $41,266 by installing solar panels over the next 25 years.
However, the House reconciliation bill would repeal this Section 25D credit after 2025. With the elimination of the credit that would help households adopt these upgrades, cost savings from technologies including battery storage, geothermal heat pumps, and solar water heaters are at risk.
Photo Courtesy EnergySage
South Carolina and the rest of the country will suffer without these tax credits. If the bill passes, Energy Innovation estimates 830,000 jobs lost nationwide, particularly impacting Republican districts, where 80% of domestic clean energy projects have been built. Consumers would see energy bills that are 50% higher and would pay $33 billion more per year. The Clean Energy Buyers Association estimates South Carolina residences, in particular, would pay $192 more per year on their energy bills by 2029. The national GDP would drop by $1.1 trillion by the decade’s end.
