In this episode of Energy Matters, Claire and Dan discuss the Big Beautiful Bill Act. They explain changes to the Inflation Reduction Act's tax credits and cover the ups and downs of solar and new timelines for wind, solar, and energy storage projects. Claire and Dan break down what these changes mean for developers, jobs, and U.S. competitiveness in the global energy market.
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00:00:03 --> 00:00:05 The one big, beautiful bill act.
00:00:05 --> 00:00:08 The good, the bad, and what this means for the future of energy.
00:00:09 --> 00:00:10 Thank you for joining us.
00:00:10 --> 00:00:11 This is Energy Matters World.
00:00:11 --> 00:00:13 With Dan and Claire
00:00:19 --> 00:00:23 and today, we'll be talking about the bill and the ways that modifies the
00:00:23 --> 00:00:28 tax provisions in particular relating to the 2022 inflation reduction.
00:00:28 --> 00:00:28 Act.
00:00:29 --> 00:00:35 So let's just start by saying that solar batteries and wind made up 96%
00:00:35 --> 00:00:40 of new capacity to US grids last year, and solar is a primary option for new
00:00:40 --> 00:00:43 power, given that there are five to seven year wait times for new gas turbines
00:00:43 --> 00:00:49 and even longer for nuclear geothermal, given the increases in demand across
00:00:49 --> 00:00:54 the country from AI data centers, crypto, there's a lot to unpack during
00:00:54 --> 00:00:55 this conversation, isn't there, Dan?
00:00:56 --> 00:00:57 There sure is.
00:00:57 --> 00:01:00 And what we talk about domestically, of course, has reverberations
00:01:00 --> 00:01:04 internationally, the US China energy backstory is critical.
00:01:05 --> 00:01:09 The global demand for energy has swung strongly towards renewables.
00:01:09 --> 00:01:10 And so if.
00:01:10 --> 00:01:14 This bill and I hesitate to put the beautiful part in there, but
00:01:14 --> 00:01:16 uh, you are more optimistic than I.
00:01:16 --> 00:01:21 So depending how things go, it has a dramatic impact on both US
00:01:21 --> 00:01:25 jobs and exports, but also on how we're facing climate change and
00:01:25 --> 00:01:27 also how competitive the US is.
00:01:27 --> 00:01:32 So there are enough domestic issues to fill many programs, and we probably
00:01:32 --> 00:01:35 will, but there's a reverberation effect around the planet that will
00:01:35 --> 00:01:39 come to maybe not today so much, but in later episodes for sure.
00:01:39 --> 00:01:40 Yep.
00:01:40 --> 00:01:43 So let's talk about the basics just to get everybody on the same page.
00:01:43 --> 00:01:48 So the investment tax credit, or the ITC is a dollar for dollar credit for expenses
00:01:48 --> 00:01:50 invested in renewable energy properties.
00:01:50 --> 00:01:55 Most often solar developments during the inflation reduction act that extended
00:01:55 --> 00:02:02 the ITC from 2022 through 2032 as a 30% tax credit for qualified expenses.
00:02:03 --> 00:02:06 The way to determine a project's eligibility for most tax credits
00:02:06 --> 00:02:11 is the time a project or facility begins construction and accelerating
00:02:11 --> 00:02:16 the phase out of how you define when construction starts is forcing everybody
00:02:16 --> 00:02:18 in the solar industry to reevaluate.
00:02:19 --> 00:02:20 Everything, literally.
00:02:20 --> 00:02:25 And so this gets pretty wonky, pretty darn quick, but we know that the big
00:02:25 --> 00:02:33 beautiful Bill Act or the O-B-B-B-A was passed in July of 2025, but.
00:02:34 --> 00:02:38 And, and in that BBB Act, it accelerated the phase out of tax
00:02:38 --> 00:02:42 credits added by the IRA for wind and solar projects that are placed in
00:02:42 --> 00:02:47 service after 2027, with an exception for projects on which construction
00:02:47 --> 00:02:51 begins on or before July 4th, 2026.
00:02:51 --> 00:02:58 So that's a mouthful, but then add on August 15th, the Treasury Department
00:02:58 --> 00:03:02 issued updated guidance related to the beginning of construction requirements
00:03:02 --> 00:03:05 for solar and wind facilities that clarified new standards and deadlines.
00:03:06 --> 00:03:10 So the solar industry has gone up and down and up and down with a,
00:03:10 --> 00:03:13 just an extraordinary amount of drama we call it in the industry.
00:03:13 --> 00:03:13 This.
00:03:14 --> 00:03:15 Solar coaster.
00:03:15 --> 00:03:19 Um, and this is the most nauseating solar coaster that I've been on in
00:03:19 --> 00:03:21 my 20 year solar career for sure.
00:03:22 --> 00:03:25 However, where I'm excited about talking with you, Dan, where we're probably gonna
00:03:25 --> 00:03:33 disagree is that this isn't as bad as we feared for projects less than 1.5 megs ac.
00:03:33 --> 00:03:37 But let's dive into the, the details of that.
00:03:38 --> 00:03:43 And so maybe just to preface, the reason why I'm gonna say it's bad is that the
00:03:43 --> 00:03:48 solar coaster and the wind coaster and the storage coaster, um, that we've seen in
00:03:48 --> 00:03:53 the past where projects get planned and we know all plans are good to make, but
00:03:53 --> 00:03:55 not all plans get, get carried through.
00:03:55 --> 00:03:59 And so there's delays, there's financing issues, there's getting land,
00:03:59 --> 00:04:00 there's all these things that happen.
00:04:00 --> 00:04:04 So what we've seen in the past, up until the Inflation reduction
00:04:04 --> 00:04:07 Act was literally projects get.
00:04:08 --> 00:04:11 Clogged up at the end of a period of time, and so you see this rush to
00:04:11 --> 00:04:13 get things in before the deadline.
00:04:13 --> 00:04:18 One of the features that the industry, from my perspective as kind of on
00:04:18 --> 00:04:22 the science and policy side, maybe less on the business side that you're
00:04:22 --> 00:04:26 doing, is that the Inflation reduction Act gave a much longer runway.
00:04:26 --> 00:04:28 It allowed for thoughtful planning.
00:04:28 --> 00:04:33 It allowed for really this to become a mature industry without this kind of
00:04:33 --> 00:04:36 stop, start, run, stop, start process.
00:04:37 --> 00:04:42 This, what we're now seeing under the, uh, the big beautiful bill is a
00:04:42 --> 00:04:45 return, at least to these uglier days.
00:04:45 --> 00:04:47 And I have multiple worries.
00:04:47 --> 00:04:50 One of which, just to kind of highlight something here at the
00:04:50 --> 00:04:54 beginning of the show is that we're already seeing forecast.
00:04:54 --> 00:04:58 Bloomberg New Energy Finance, for example, just came out and said, well.
00:04:58 --> 00:05:02 A huge bulk of new projects that were planned in the US
00:05:02 --> 00:05:03 were going to be solar and wind.
00:05:03 --> 00:05:07 And now we're starting to see discussions of major shortfalls,
00:05:07 --> 00:05:11 and we're talking shortfalls in the five to seven gigawatt range.
00:05:11 --> 00:05:13 So these are not, you know, individual projects.
00:05:13 --> 00:05:15 These are the large, large changes.
00:05:15 --> 00:05:20 And so as you describe it, and I really want you to dig in and say why you
00:05:20 --> 00:05:22 think it's not as bad as you thought.
00:05:22 --> 00:05:26 To me, it is returning to a model at best.
00:05:27 --> 00:05:30 That we know is not good for steady, well-planned development.
00:05:31 --> 00:05:32 Oh, for sure.
00:05:32 --> 00:05:32 Yeah.
00:05:32 --> 00:05:35 I mean, I'm not saying any of this is any good, but, but from
00:05:35 --> 00:05:39 a business perspective, at least we know what the rules are.
00:05:39 --> 00:05:41 I mean, one of the things that's that's been so hard during the Trump
00:05:41 --> 00:05:45 administration is not knowing the uncertainty is what drives people crazy.
00:05:46 --> 00:05:49 Now, that uncertainty is something that happened in 2012.
00:05:49 --> 00:05:51 There was a solar cliff in 2012.
00:05:51 --> 00:05:54 There was a solar cliff in 2017.
00:05:54 --> 00:05:58 And through it all, as we talk about in a different episode, solar continues to
00:05:58 --> 00:06:01 exceed expectations in terms of growth.
00:06:01 --> 00:06:06 It is becoming a mature industry, which is why so many Republicans and
00:06:06 --> 00:06:09 lot lots of folks are saying, do you really need this federal tax credit?
00:06:09 --> 00:06:10 Right.
00:06:10 --> 00:06:15 We could then go down the rabbit hole of, well, fossil fuel industry is massively
00:06:15 --> 00:06:18 subsidized and let's just get rid of everybody's subsidies and level the
00:06:18 --> 00:06:20 playing field and dollars to donuts.
00:06:20 --> 00:06:25 Solar will always, always win, especially in light of our aging
00:06:25 --> 00:06:26 transmission and distribution grid.
00:06:27 --> 00:06:30 But right now, at least we know what the rules are.
00:06:30 --> 00:06:31 Now let me just stop and so I
00:06:31 --> 00:06:35 gotta, I gotta stop you there because I like that as the positive side.
00:06:35 --> 00:06:39 I, I feel like I'm rarely the pessimist in the room, but I'm gonna be the
00:06:39 --> 00:06:42 pessimist in this, uh, in this Trump room.
00:06:42 --> 00:06:48 And it's largely because what you described is a process that.
00:06:49 --> 00:06:52 If the money is ready and if a project can go ahead.
00:06:52 --> 00:06:57 But the other side of the story is that the, at the EPA and the Department
00:06:57 --> 00:07:00 of Energy, and particularly in the White House, they're talking about
00:07:00 --> 00:07:03 putting much more control of project permitting in the hands of Yes.
00:07:03 --> 00:07:06 Judges and governors who have.
00:07:06 --> 00:07:07 Very little.
00:07:07 --> 00:07:12 Forget renewable energy expertise, but expertise on energy in general.
00:07:12 --> 00:07:17 And my worry is that this is really being done in a very direct way to
00:07:17 --> 00:07:21 give legal means to block projects that the White House doesn't like.
00:07:21 --> 00:07:25 Not because some projects are well planned and others are not as well planned.
00:07:25 --> 00:07:28 This is really a political push into what hopefully would've.
00:07:28 --> 00:07:31 Otherwise been illegal and a financial dialogue?
00:07:32 --> 00:07:36 Well, absolutely, and I think it, the permits are a huge issue and getting
00:07:36 --> 00:07:39 permits in different states and different counties and different authorities,
00:07:39 --> 00:07:41 having jurisdiction is very hard.
00:07:41 --> 00:07:45 But don't forget, interconnection approval can sometimes take years depending
00:07:45 --> 00:07:46 on the utility we're talking with.
00:07:46 --> 00:07:48 Yeah, I mean, that can be the five
00:07:48 --> 00:07:49 to seven year monster.
00:07:49 --> 00:07:50 A hundred percent.
00:07:51 --> 00:07:51 Right.
00:07:51 --> 00:07:55 And that goes back to another episode we've gone through, which is, you know,
00:07:55 --> 00:07:57 how do utilities make their money?
00:07:57 --> 00:08:01 Utilities make their money by selling kilowatt hours to humans.
00:08:01 --> 00:08:04 They don't really want us to have more solar because that means
00:08:04 --> 00:08:05 they're reducing their revenue.
00:08:05 --> 00:08:06 But that's a story.
00:08:06 --> 00:08:06 So do so do
00:08:06 --> 00:08:11 me a favor and un unpack what is gonna sound initially like a weird detail,
00:08:11 --> 00:08:15 but in practice for projects that I've seen you do, it's, it's far from it.
00:08:16 --> 00:08:17 This whole issue about.
00:08:17 --> 00:08:23 When is a project actually broken ground and what does it mean in terms of delays?
00:08:23 --> 00:08:28 I mean, for example, if there's a bad, you know, a a, a bad weather season or
00:08:28 --> 00:08:32 a bank has to refinance something, talk about maybe even a particular project and
00:08:32 --> 00:08:38 how you see this new language affecting the ability to pull permits or to pull
00:08:38 --> 00:08:42 credits for a project that doesn't seem to be hitting its milestones.
00:08:42 --> 00:08:44 So let's unpack that and that's a great segue.
00:08:44 --> 00:08:48 So let's talk about what happened after the Treasury Department issued
00:08:48 --> 00:08:51 updated guidance re get related to the beginning of construction.
00:08:51 --> 00:08:55 So this is something that the whole solar industry has, has been massively impacted
00:08:55 --> 00:09:02 by, and as of, of as of speaking with you today, the stocks of Sunrun Endphase
00:09:02 --> 00:09:07 Solar Edge went up by 30% because of what came out about this definition of.
00:09:08 --> 00:09:09 Start of construction.
00:09:09 --> 00:09:12 So there's three different ways that the commencement of
00:09:12 --> 00:09:14 construction date can be defined.
00:09:14 --> 00:09:20 Number one, onsite physical work of a significant nature, which may include
00:09:20 --> 00:09:24 the installation of racking or other structures to a fixed P PV panels or
00:09:24 --> 00:09:27 collectors or solar STAs cells to a site.
00:09:27 --> 00:09:29 And there's no specific cost for for that.
00:09:29 --> 00:09:30 So that's number one.
00:09:30 --> 00:09:31 Onsite physical work.
00:09:32 --> 00:09:35 So that's what I call regular construction, where there's no weird
00:09:35 --> 00:09:39 broke brakes and you had to get a new permit because you discovered a gas line
00:09:39 --> 00:09:41 or a water line, or you didn't have full.
00:09:42 --> 00:09:45 Um, by, you didn't have full access to a piece of land, you had to transit.
00:09:45 --> 00:09:47 That's kind of the regular process.
00:09:47 --> 00:09:48 Exactly.
00:09:48 --> 00:09:52 Number two, about how the, how construction date could be defined is
00:09:53 --> 00:09:57 offsite work of a significant nature, which may include the manufacturer
00:09:57 --> 00:09:59 of non-inventory components.
00:10:00 --> 00:10:05 Like you spend time making a special transformer or inverter or racking system,
00:10:05 --> 00:10:10 this work must be done under a binding written contract, and it must be uniquely
00:10:10 --> 00:10:15 identified for a project because a lot of people have been, you know, stockpiling,
00:10:15 --> 00:10:17 solar panels, all sorts of stuff.
00:10:17 --> 00:10:18 So number two is offsite.
00:10:19 --> 00:10:25 And then number three is what we call safe harbor, or the 5% test, meaning you have
00:10:25 --> 00:10:30 to spend at least 5% of the total cost of the project by whatever the deadline is.
00:10:30 --> 00:10:34 And as we've said earlier, if you've started construction before
00:10:34 --> 00:10:40 July 4th, 2026, or you're placing in service by 2027, so that still
00:10:40 --> 00:10:44 works for projects that are less than 1.5 megs ac, which is of
00:10:45 --> 00:10:45 course, that's tiny.
00:10:45 --> 00:10:46 Tiny
00:10:46 --> 00:10:47 well.
00:10:47 --> 00:10:48 Tiny.
00:10:48 --> 00:10:52 I mean, you know, full disclosure, that is Sun Rock's, most of Sun Rock's business.
00:10:52 --> 00:10:58 But absolutely it does not mean large scale community solar utility scale solar.
00:10:58 --> 00:11:02 There was a concern that that 5% test would be increased to 20%.
00:11:03 --> 00:11:05 Or 50%, but that didn't happen.
00:11:06 --> 00:11:07 So yes, and that was due to some
00:11:07 --> 00:11:12 interesting pushback for a lot of elected officials who saw the ways
00:11:12 --> 00:11:16 this could negatively infect jobs and projects in their district.
00:11:16 --> 00:11:18 So there's an interesting dialogue behind the scenes.
00:11:18 --> 00:11:21 It's just, in my view, nowhere near strong enough.
00:11:21 --> 00:11:25 And we didn't see high profile members of the House or Senate stand up and say,
00:11:25 --> 00:11:27 oh, we've really gotta defend this more.
00:11:28 --> 00:11:31 I'll disagree briefly with Tom Tillis from North Carolina.
00:11:31 --> 00:11:35 So Tom Tillis, we went to a fundraiser for Tom Tillis with Sunrock.
00:11:35 --> 00:11:36 Full disclosure.
00:11:36 --> 00:11:40 He knows his energy policy and he knew that the big, beautiful bill was gonna
00:11:40 --> 00:11:43 negatively impact his constituents.
00:11:43 --> 00:11:44 So let's be real.
00:11:44 --> 00:11:48 I mean, essentially by getting rid of the 30% federal tax credit for residential.
00:11:48 --> 00:11:51 We've been focusing on commercial, this conversation, but basically
00:11:51 --> 00:11:53 there's a cliff at the end of the year.
00:11:54 --> 00:11:59 You will not get a 30% federal tax credit that literally across the country is going
00:11:59 --> 00:12:02 to remove 250 jobs close to overnight.
00:12:02 --> 00:12:02 Yeah.
00:12:02 --> 00:12:02 This
00:12:03 --> 00:12:04 is and top to us
00:12:04 --> 00:12:04 understood that.
00:12:05 --> 00:12:05 Yeah.
00:12:05 --> 00:12:05 Yeah.
00:12:05 --> 00:12:08 And I think this is a critical thing that's reverberating.
00:12:08 --> 00:12:13 So again, full disclosure, there's a analytics group in Oakland, California.
00:12:13 --> 00:12:14 A number of my students are employed.
00:12:14 --> 00:12:16 They're now called the Rhodium Group.
00:12:16 --> 00:12:17 That is mm-hmm.
00:12:17 --> 00:12:21 I think one of the best analytics groups, and we'll put a link, um, in,
00:12:21 --> 00:12:23 in the material to their latest report.
00:12:23 --> 00:12:24 They.
00:12:25 --> 00:12:29 Come up with not only that number, but they're worried about with the push to do
00:12:29 --> 00:12:36 clean energy projects overseas, that US companies will lose critical capacity to
00:12:36 --> 00:12:38 overseas places where there are real jobs.
00:12:38 --> 00:12:42 And then if and when, hopefully when, but not if we get to
00:12:42 --> 00:12:43 repeal or move back on parts of.
00:12:44 --> 00:12:46 Some of the best talent will be gone.
00:12:47 --> 00:12:48 Oh, a hundred percent.
00:12:48 --> 00:12:53 Because let's be honest, like for over 1.5 meg AC solar projects, you must
00:12:53 --> 00:12:58 demonstrate that you're undertaking onsite physical work or offsite physical work
00:12:58 --> 00:13:04 on a continuous basis by July 5th of 26th, that's not very much time to get.
00:13:04 --> 00:13:07 A permit to get not at all interconnection approval, all of that.
00:13:07 --> 00:13:12 So for any projects that do begin construction by July 4th of 26,
00:13:12 --> 00:13:16 you have four years to finish after the construction year starts.
00:13:16 --> 00:13:19 And then you also have to show continuous construction.
00:13:20 --> 00:13:26 Um, so the over 1.5 meg AC solar projects have a, you know, a lot of
00:13:26 --> 00:13:28 heartbreak ahead, a lot of heartbreak.
00:13:29 --> 00:13:32 Let me throw in the other piece, which you know, we'll talk more about in
00:13:32 --> 00:13:36 episodes on China and the international scene, and that is, I know a lot of large
00:13:36 --> 00:13:40 projects in the west, some that I worked with in Washington State, two in New
00:13:40 --> 00:13:45 Mexico, and quite a number in California where they did not have all of their
00:13:45 --> 00:13:47 inverters and solar materials stockpiled.
00:13:47 --> 00:13:51 As they began, began, they were gonna be buying these on the market.
00:13:51 --> 00:13:56 And they were assuming they would be buying from China and Vietnam
00:13:56 --> 00:13:58 and Malaysia and Canada and places.
00:13:58 --> 00:14:01 And now with this other layer of debate about tariffs.
00:14:02 --> 00:14:05 There's real questions about where that inventory is gonna come from.
00:14:05 --> 00:14:08 Maybe not for some of the small projects in the coming months, but
00:14:08 --> 00:14:14 in the longer term, if this becomes a pivotal piece of the trade war or the
00:14:14 --> 00:14:18 tariff war, or the tariff insanity, whatever it might you want to call
00:14:18 --> 00:14:20 it, there's a worry that that process.
00:14:21 --> 00:14:25 Finding lease cost materials, building 'em into projects really could be thrown
00:14:25 --> 00:14:30 out the window and project costs could escalate, which will unwittingly then
00:14:30 --> 00:14:34 play into the argument that renewables are not as cheap as we, you and I and uh,
00:14:34 --> 00:14:37 people, developers know they actually are.
00:14:37 --> 00:14:38 Right.
00:14:38 --> 00:14:39 That's exactly right.
00:14:39 --> 00:14:43 And so we haven't even talked about Fi o or the foreign entities of concern
00:14:43 --> 00:14:50 restriction, but that what essentially what fi o means is that, especially for
00:14:51 --> 00:14:56 larger projects, we need to consider safe harboring by the end of 2025.
00:14:56 --> 00:14:59 And so there's gonna be a huge spike in costs associated
00:14:59 --> 00:15:00 with, and that's right around
00:15:00 --> 00:15:01 the corner for any big project.
00:15:02 --> 00:15:03 Absolutely.
00:15:03 --> 00:15:03 In the rear view
00:15:03 --> 00:15:04 mirror for some.
00:15:05 --> 00:15:06 Oh, for sure.
00:15:06 --> 00:15:06 Yeah.
00:15:06 --> 00:15:10 So you asked about a specific project that I've worked on recently, and
00:15:10 --> 00:15:15 this is with Sunrock, where you know what's happening with domestic content
00:15:15 --> 00:15:16 tariffs, how that's all impacted.
00:15:17 --> 00:15:22 So, you know, earlier in 2025, we bought a battery.
00:15:23 --> 00:15:28 We then heard from the battery manufacturer that it is cons, it,
00:15:28 --> 00:15:29 it constitutes domestic content.
00:15:29 --> 00:15:33 Then we heard that it wasn't, then there was a tariff that was imposed
00:15:33 --> 00:15:36 on it, and that tariff was huge.
00:15:36 --> 00:15:38 It would have, you know, almost doubled the cost of the battery.
00:15:39 --> 00:15:43 Then we heard psych, we're not really honest about that.
00:15:43 --> 00:15:45 The, the tariff isn't quite as bad as we thought it was.
00:15:46 --> 00:15:51 But we needed to get a tax opinion and we weren't allowed to use our tax lawyer.
00:15:51 --> 00:15:55 We had to use their very expensive tax lawyer in edit in order to
00:15:55 --> 00:16:00 get the ruling that this was in fact considered domestic content.
00:16:00 --> 00:16:03 And the time of all each of these steps, I mean, which you
00:16:03 --> 00:16:04 closer to the deadline did not.
00:16:05 --> 00:16:06 Absolutely.
00:16:06 --> 00:16:10 So the tariff rigamarole has been, you know, incredibly dramatic.
00:16:10 --> 00:16:16 Now, one good thing is other projects like storage, gas fired power plants
00:16:16 --> 00:16:21 with carbon capture, geothermal, hydropower, biomass, they all have.
00:16:22 --> 00:16:26 Till the end of 2033 to start construction and qualify for
00:16:26 --> 00:16:28 tax credits at the full rate.
00:16:28 --> 00:16:34 Any project that starts construction in 2034 or 35 will qualify for
00:16:34 --> 00:16:35 tax credits at reduced rates.
00:16:35 --> 00:16:40 So there's, you know, that means companies like a full disclosure,
00:16:40 --> 00:16:45 I'm an investor, but Canaan Energy, which turns waste heat to power.
00:16:45 --> 00:16:45 You're an
00:16:45 --> 00:16:46 investor in everything.
00:16:46 --> 00:16:48 Claire, so I, I, no, I'm not
00:16:48 --> 00:16:48 abs.
00:16:48 --> 00:16:51 I wish I were, but no, Canan Energy is, is a fantastic company.
00:16:51 --> 00:16:56 Will definitely have, uh, links to their website, uh, K-A-N-I-N, energy,
00:16:56 --> 00:17:00 waste, heat to energy, you know, they're gonna shine in this era.
00:17:00 --> 00:17:01 Um.
00:17:01 --> 00:17:07 But it, it, you know, foc, the foreign entities of concern has been massively
00:17:07 --> 00:17:09 impacted by this big, beautiful bill.
00:17:10 --> 00:17:13 There are provisions that will deny technology, neutral tax
00:17:13 --> 00:17:17 credits on projects that use too much Chinese equipment or have
00:17:17 --> 00:17:19 contracts or technology license.
00:17:19 --> 00:17:23 That give Chinese counterparties effective control over their projects.
00:17:24 --> 00:17:26 FOC requires a three part analysis.
00:17:26 --> 00:17:28 There's so much complication.
00:17:29 --> 00:17:33 Um, any project that's under construction by December 31st, 2025, which
00:17:33 --> 00:17:35 TikTok, that's just tomorrow, right?
00:17:35 --> 00:17:37 Can avoid step one of the analysis.
00:17:37 --> 00:17:40 But anyway, there's limits on the Chinese equipment and that's very,
00:17:40 --> 00:17:46 very complicated add in that, okay, great, you wanna support manufacturing.
00:17:46 --> 00:17:48 All equipment in the United States.
00:17:48 --> 00:17:49 Fantastic.
00:17:49 --> 00:17:51 That's why Tom Tillis was pushing what he was pushing.
00:17:51 --> 00:17:54 That's why, you know, we've created so many tens of thousands of
00:17:54 --> 00:17:58 manufacturing jobs in the solar and storage industry, but it's, you
00:17:58 --> 00:18:00 can't install such a thing overnight.
00:18:00 --> 00:18:05 So you know this, all of this is causing a huge restructuring of existing
00:18:05 --> 00:18:07 pipelines of wind and solar projects.
00:18:08 --> 00:18:09 The only.
00:18:10 --> 00:18:13 Only positive is that we have less uncertainty to do business.
00:18:13 --> 00:18:13 Well, I think
00:18:13 --> 00:18:16 that, you know, just to, to double down, so again, this is maybe where
00:18:16 --> 00:18:19 we just, where, where we kind of have this different perspective because
00:18:19 --> 00:18:24 this, this part of the bill absolutely does target the solar part, but we
00:18:24 --> 00:18:27 know that the president either doesn't think the wind exists or it doesn't
00:18:27 --> 00:18:30 think that we will be permitting this because there's other means.
00:18:30 --> 00:18:34 And so my worry is that with the biggest chunk of new clean energy
00:18:34 --> 00:18:36 projects going in, being solar.
00:18:37 --> 00:18:41 This bill targets the leading edge of the clean energy transition,
00:18:41 --> 00:18:46 and others are gonna be feeling all kinds of, of very negative headwinds.
00:18:46 --> 00:18:51 Um, even things right now, I mean, Texas is installing storage like in Bandit,
00:18:52 --> 00:18:55 but all of these are gonna be affected even if they're not directly targeted
00:18:55 --> 00:18:56 by the piece you're talking about.
00:18:57 --> 00:18:58 Absolutely.
00:18:58 --> 00:18:59 Absolutely.
00:18:59 --> 00:19:02 And I, I think to lift it up, we're obviously not just talking about
00:19:02 --> 00:19:05 solar, but the think tank energy, geo innovation found that the bill
00:19:05 --> 00:19:08 threatened thousands of clean energy projects, likely resulting in the loss
00:19:08 --> 00:19:12 of 760 jobs in the sector by 2030.
00:19:12 --> 00:19:12 Yeah.
00:19:12 --> 00:19:14 And to maybe bring it home to individuals.
00:19:14 --> 00:19:18 Um, you know, the Roadium group that I mentioned before, they're estimating a
00:19:18 --> 00:19:22 hundred to $200 increase in the cost.
00:19:22 --> 00:19:24 Per homeowner on their energy.
00:19:24 --> 00:19:25 Oh yeah.
00:19:25 --> 00:19:28 And so we're talking about dramatic changes overnight.
00:19:28 --> 00:19:30 We'll talk about EVs in the later episode.
00:19:30 --> 00:19:33 I think there's so much going on, uh, what we're talking about
00:19:33 --> 00:19:34 today, we'll leave that aside.
00:19:34 --> 00:19:38 But this is gonna reverberate in terms of people's, uh, monthly
00:19:38 --> 00:19:40 electric bills in a very direct way.
00:19:40 --> 00:19:43 I don't think the causality is gonna be seen by people.
00:19:43 --> 00:19:44 They're just gonna see higher rates.
00:19:45 --> 00:19:47 They're certainly gonna see higher rates.
00:19:47 --> 00:19:52 And we as an energy industry and as a climate tech community, have to be loud
00:19:52 --> 00:19:55 and proud about the fact that the reason that your rates are going up is because
00:19:55 --> 00:19:57 of what the Trump administration has done.
00:19:57 --> 00:19:58 But it's interesting.
00:19:58 --> 00:20:04 So I was just in Austin, Texas, uh, recording a debate, um, with a pro.
00:20:04 --> 00:20:08 Uh, natural gas slash nuclear, um, advocate.
00:20:08 --> 00:20:12 And, you know, his point was, no, uh, renewables are expensive.
00:20:12 --> 00:20:16 And I said, but you know, it's clear and it's been reported on for years that.
00:20:16 --> 00:20:21 Up until this bill, it was demonstrated and documented that it was cheaper to
00:20:21 --> 00:20:26 build a new clean energy plant than to operate an existing fossil fuel plant.
00:20:26 --> 00:20:30 That's been something that Bloomberg News, Bloomberg New energy
00:20:30 --> 00:20:31 finances, reporting on for years.
00:20:31 --> 00:20:33 And he said, oh, that's just not true.
00:20:33 --> 00:20:34 That's left wing media.
00:20:34 --> 00:20:36 And I said, this has been documented.
00:20:36 --> 00:20:39 And so people are not even playing by the same facts.
00:20:39 --> 00:20:43 And that does worry me about the kind of clear reporting that I
00:20:43 --> 00:20:44 agree the industry has to do.
00:20:44 --> 00:20:45 But you know.
00:20:46 --> 00:20:50 Clean and dirty energy is as partisan now as you can possibly get.
00:20:50 --> 00:20:54 A hundred percent and I think it behooves any listeners, you know, we
00:20:54 --> 00:20:57 really have to coordinate and combine efforts because thinking through the
00:20:57 --> 00:21:02 levelized cost of energy that Lazar started working on, which as you say
00:21:02 --> 00:21:06 Dan means not just looking at what the initial cost is, but what's the
00:21:06 --> 00:21:08 operation and maintenance cost over time.
00:21:08 --> 00:21:12 That's what we have to compare because I think there is still the trope that
00:21:12 --> 00:21:17 renew as obviously as, as evidenced by your conversation that renewable
00:21:17 --> 00:21:20 energy is still more expensive than gas and it's just not true.
00:21:20 --> 00:21:24 I mean, take, take I, what I would love to do, and maybe we should write a paper
00:21:24 --> 00:21:28 on this, is let's get rid of all of the subsidies for fossil fuel and all of
00:21:28 --> 00:21:29 the subsidies for everything, right?
00:21:30 --> 00:21:33 Level, the flying field, a hundred percent, incorporate what transmission
00:21:33 --> 00:21:35 and distribution costs are, and then let's see where we are.
00:21:36 --> 00:21:38 See, Claire, you're sounding more like an academic like me all the
00:21:38 --> 00:21:40 time, because I would love to do that.
00:21:40 --> 00:21:41 But we also know.
00:21:41 --> 00:21:45 That there are subsidies layered in, in terms of permitting and
00:21:45 --> 00:21:51 where roads and railroads and gas lines are given credit and.
00:21:52 --> 00:21:57 We will unlikely to ever be able to disentangle those subsidies,
00:21:57 --> 00:22:00 many of which come in the permitting and the biasing process.
00:22:00 --> 00:22:01 But I totally agree with you.
00:22:02 --> 00:22:07 And then there's another level, and that is that Congress nullifying EPAs waiver
00:22:07 --> 00:22:11 to California, which is a waiver that allows California to set higher standards.
00:22:11 --> 00:22:15 Primarily in vehicles, but also in terms of air quality, near power plants.
00:22:15 --> 00:22:22 There are other layers that are being, I fear and I, I think, cleverly aligned
00:22:22 --> 00:22:28 with this big, beautiful bill to make the pathway to lower cost more job
00:22:28 --> 00:22:32 creating clean energy, harder and harder, despite all the benefits.
00:22:32 --> 00:22:35 I know that was a mouthful, but it's a, it's the bigger
00:22:35 --> 00:22:37 context in which this bill sits.
00:22:39 --> 00:22:39 Sure.
00:22:39 --> 00:22:42 And I mean, you're, you're referring to project 2025?
00:22:42 --> 00:22:42 Absolutely.
00:22:43 --> 00:22:43 Yeah.
00:22:43 --> 00:22:45 So tell me a little bit more about what you're talking
00:22:45 --> 00:22:46 about and then I'll add mine.
00:22:46 --> 00:22:48 So I mean, there, there's, there's two aspects.
00:22:48 --> 00:22:51 One is that as you clean your electricity.
00:22:52 --> 00:22:57 It makes electric vehicles all the better in terms of air quality,
00:22:57 --> 00:22:58 which has direct benefits.
00:22:58 --> 00:23:03 But we also know that the most critical finding in front of the Supreme Court,
00:23:03 --> 00:23:05 the so-called endangerment finding.
00:23:05 --> 00:23:06 Yes, we talked about it briefly before.
00:23:06 --> 00:23:07 Before this is the key.
00:23:07 --> 00:23:11 But endangerment basically says that the reason why the U-S-E-P-A
00:23:12 --> 00:23:13 is allowed to regulate energy.
00:23:15 --> 00:23:19 Is because greenhouse gases are harmful to people on the planet.
00:23:19 --> 00:23:21 There's no scientific debate about that outside the White
00:23:21 --> 00:23:22 House as far as I can tell.
00:23:22 --> 00:23:22 Right.
00:23:22 --> 00:23:27 But the issue is if the endangerment finding goes away, then EPAs
00:23:27 --> 00:23:31 ability to essentially use the Clean Air and the Clean Water Act gets
00:23:31 --> 00:23:33 dramatically weakened, if not removed.
00:23:34 --> 00:23:39 And then we're in a situation where the fallback framework
00:23:39 --> 00:23:40 for doing all these projects.
00:23:41 --> 00:23:45 Has been attacked in a way, as strong as the big, beautiful bill
00:23:45 --> 00:23:47 is attacking the financing side.
00:23:47 --> 00:23:52 So we have a double or triple whammy coming if both of these things happen.
00:23:52 --> 00:23:57 And so far, you know, I hate to admit it, the Trump team has been exceedingly
00:23:57 --> 00:24:00 effective in, in executing their agenda.
00:24:00 --> 00:24:01 Yep.
00:24:01 --> 00:24:01 Yep.
00:24:01 --> 00:24:05 And I guess, you know, just lifting up for the people who are not as policy
00:24:05 --> 00:24:12 wonky as, as, as we are, you know, what's the, the project 2025 agenda?
00:24:12 --> 00:24:14 I just fundamentally have such a hard time understanding like.
00:24:15 --> 00:24:19 You really wanna ruin the pres, the planet for your children
00:24:19 --> 00:24:22 and for your grandchildren, just so you can make a buck now.
00:24:22 --> 00:24:24 And I guess it really is, I mean's I'll boil it
00:24:24 --> 00:24:25 down, right?
00:24:25 --> 00:24:26 I mean, I'll boil it down.
00:24:26 --> 00:24:29 I mean, so that's, that's you, you're stealing my line, which I like, but I'll,
00:24:29 --> 00:24:31 I'll sort of delve into your territory.
00:24:31 --> 00:24:34 You know, the estimate is that since the beginning of the
00:24:34 --> 00:24:36 Inflation Reduction Act, um.
00:24:37 --> 00:24:40 What we have seen is a huge increase in manufacturing.
00:24:40 --> 00:24:42 We've seen new jobs coming into the sector.
00:24:42 --> 00:24:46 There's been important, uh, bumps up in terms of manufacturing and investment
00:24:46 --> 00:24:50 in manufacturing, and these new analyses say that this will gut that.
00:24:50 --> 00:24:54 And so that is a direct blow to jobs and it's a direct blow
00:24:54 --> 00:24:56 to trying to get additional.
00:24:57 --> 00:25:01 Long-term steady jobs in traditionally, I'll call it, well, it is red
00:25:01 --> 00:25:07 states and so right there is a huge impact and, and, and perhaps it's
00:25:07 --> 00:25:12 up to, up to or higher, $110 billion of money that will be removed.
00:25:13 --> 00:25:16 From community investments in new manufacturing cap, uh,
00:25:16 --> 00:25:18 capability in the, in the us
00:25:18 --> 00:25:19 Yep.
00:25:19 --> 00:25:22 So, you know, clean energy manufacturing, huge point.
00:25:23 --> 00:25:28 Most of the inflation red reduction Act funding did go to southeast and red
00:25:28 --> 00:25:31 states where, and, and clean energy.
00:25:31 --> 00:25:31 By
00:25:32 --> 00:25:32 design.
00:25:32 --> 00:25:33 By design, by
00:25:33 --> 00:25:34 design, absolutely.
00:25:34 --> 00:25:39 Let's support folks and create jobs in different parts of the country.
00:25:39 --> 00:25:39 Right.
00:25:39 --> 00:25:40 So.
00:25:40 --> 00:25:44 Investment in facilities that manufacture clean energy technologies like solar
00:25:44 --> 00:25:49 modules, battery cells, electric vehicles averaged around 9 billion a year.
00:25:49 --> 00:25:53 In the two years leading up to the passage of the IRA, but since the
00:25:53 --> 00:25:59 IRA through Q1 of 25, that increased by a factor 4.5 times to 42 billion
00:25:59 --> 00:26:00 annually representing a hundred.
00:26:00 --> 00:26:01 That's a dramatic
00:26:01 --> 00:26:01 change.
00:26:01 --> 00:26:05 I mean, that is the kind of thing that you would think a president of.
00:26:05 --> 00:26:11 Any political, uh, Stripe would say, I want to take, take credit for
00:26:11 --> 00:26:13 building manufacturing base in the us.
00:26:13 --> 00:26:14 That's supposed to be a core value.
00:26:15 --> 00:26:16 Right.
00:26:16 --> 00:26:20 Representing $146 billion in total manufacturing investment.
00:26:20 --> 00:26:23 And, and that money is not coming from federal money that is coming
00:26:23 --> 00:26:27 from private investors who are seeing, yep, I wanna invest in this.
00:26:27 --> 00:26:31 But so private investment dollars increased by a factor of somewhere
00:26:31 --> 00:26:34 between six and nine times beyond what the federal government was
00:26:34 --> 00:26:35 providing in terms of tax credits.
00:26:35 --> 00:26:35 Yeah.
00:26:35 --> 00:26:40 So we're gonna need to do a whole episode later on about the EV
00:26:40 --> 00:26:42 impacts and basically about how.
00:26:42 --> 00:26:47 Cars are becoming, you know, the new smartphones, the new modular devices
00:26:47 --> 00:26:48 that can do all kinds of things.
00:26:48 --> 00:26:51 But that is also on the chopping block here.
00:26:51 --> 00:26:54 Um, but I, we'll, we'll, we'll do that one in another episode because
00:26:54 --> 00:26:56 it's just such a big mouthful.
00:26:56 --> 00:26:59 And we are really hoping that people will go to Energy Matters
00:26:59 --> 00:27:04 at Energy Net World, other and other places to give their stories.
00:27:04 --> 00:27:08 I'd like to hear good and bad stories, uh, about what we're getting out of,
00:27:09 --> 00:27:11 uh, both the clarity on what the.
00:27:11 --> 00:27:16 Big blanking Bill does, but also on what are some of the perspectives of
00:27:16 --> 00:27:20 large and small industries in terms of where they want to be positioned.
00:27:20 --> 00:27:24 You know, we saw quite recently, um, that the, this administration has now canceled
00:27:24 --> 00:27:28 over 6 visas for returning students.
00:27:29 --> 00:27:33 Who are in US universities from overseas, and those are primarily STEM students.
00:27:33 --> 00:27:37 And so that had been a huge source of talent.
00:27:37 --> 00:27:41 That's not directly in the big beautiful Bill, but those are related
00:27:41 --> 00:27:45 efforts and they are gutting this capacity to be a leader in where
00:27:45 --> 00:27:48 most of the world sees their going right now in terms of their energy.
00:27:49 --> 00:27:49 Right.
00:27:50 --> 00:27:50 Right.
00:27:51 --> 00:27:56 And we, you know, we could spend an entire episode about the unprecedented handouts
00:27:56 --> 00:27:58 to the fossil fuel industry, right?
00:27:58 --> 00:28:03 Which mandates onshore and offshore oil and gas leasing open sensitive areas
00:28:03 --> 00:28:05 for drilling, expands coal extraction.
00:28:05 --> 00:28:07 I mean, it's fascinating.
00:28:07 --> 00:28:09 So if you take a particular state, let's say Connecticut.
00:28:09 --> 00:28:10 Right.
00:28:10 --> 00:28:12 Connecticut, more and more demand.
00:28:12 --> 00:28:16 AI center, ai, data centers, crypto, more demand, right?
00:28:16 --> 00:28:18 People aren't improving their energy efficiency.
00:28:19 --> 00:28:20 They're a transmission constrained state.
00:28:21 --> 00:28:23 They don't wanna install coal.
00:28:23 --> 00:28:24 They don't like offshore wind.
00:28:25 --> 00:28:26 They do like solar, right?
00:28:27 --> 00:28:30 They're not, they've, they've made energy efficiency improvements.
00:28:30 --> 00:28:31 What do you expect them to do?
00:28:31 --> 00:28:36 The transmission and distribution grid is very constrained, so he's
00:28:36 --> 00:28:39 literally gonna do offshore oil and gas.
00:28:39 --> 00:28:40 Off the East coast.
00:28:40 --> 00:28:41 I mean, you know, that's what, that's the numbers are
00:28:41 --> 00:28:42 saying, right?
00:28:42 --> 00:28:45 That seems to be what a number of his investor friends.
00:28:45 --> 00:28:47 And so I know we're not supposed to be super political.
00:28:47 --> 00:28:50 We tried in this, in the series to start with the facts, both on the
00:28:50 --> 00:28:54 science of climate change, science of energy and the business side.
00:28:54 --> 00:28:58 But this bill has squarely put that in the, in the center and so.
00:28:59 --> 00:29:03 Well, and it creates a pay to play scheme, right, that allows developers to pay a fee
00:29:03 --> 00:29:06 in exchange for expedited environmental rules of their proposed projects.
00:29:07 --> 00:29:11 And it, you know, it including like eliminating funding to reduce emissions of
00:29:11 --> 00:29:13 methane, which is a potent greenhouse gas.
00:29:14 --> 00:29:17 Four to 10 times more potent than carbon dioxide and delays
00:29:17 --> 00:29:19 a fee for methane releases.
00:29:19 --> 00:29:23 It provides huge, huge tax breaks for fossil fuel developers.
00:29:24 --> 00:29:27 He also directed the department of in the Interior to end policies
00:29:27 --> 00:29:29 that promote wind and solar.
00:29:29 --> 00:29:32 So all across the board, you know, it seems that.
00:29:33 --> 00:29:35 W or demand is increasing.
00:29:35 --> 00:29:35 Right.
00:29:35 --> 00:29:36 There's no way around that.
00:29:37 --> 00:29:42 And this has certainly, you know, cut us at the knees, uh, with that question.
00:29:42 --> 00:29:42 Okay.
00:29:42 --> 00:29:44 So, so to, so wrap the episode up.
00:29:44 --> 00:29:46 You know, you are, you are in the business side of the story.
00:29:47 --> 00:29:51 Who do you think will be winners in this process?
00:29:51 --> 00:29:54 Is it those people who have been stockpiling inventory or
00:29:54 --> 00:29:58 is it those that will work with manufacturers of solar panels?
00:29:59 --> 00:30:03 In Vietnam or Malaysia, which by the way, are both targeted for tariffs.
00:30:03 --> 00:30:07 Who do you see as a winner strategically, not in terms of individual companies?
00:30:07 --> 00:30:07 Yeah.
00:30:07 --> 00:30:11 Well, certainly the losers are the res residential, right?
00:30:11 --> 00:30:12 No question.
00:30:12 --> 00:30:12 No question about it.
00:30:13 --> 00:30:17 And the losers are large utility scale projects because you
00:30:17 --> 00:30:19 can't install these projects.
00:30:19 --> 00:30:22 So it's gonna have to be commercial and industrial, right?
00:30:22 --> 00:30:26 Small scale, commercial, industrial, less than 1.5 megs AC and storage.
00:30:27 --> 00:30:30 So, as you know, Dan, better than anybody at talking about East versus
00:30:30 --> 00:30:34 West, demand charges in California have increased it by a factor of
00:30:34 --> 00:30:36 three in the last several years.
00:30:36 --> 00:30:41 And so focusing on the demand charge savings with storage storage is
00:30:41 --> 00:30:42 gonna have to be the win winner.
00:30:42 --> 00:30:47 Um, natural gas, uh, waste heat is gonna be a winner.
00:30:47 --> 00:30:51 Um, and, and small scale, CNI solar.
00:30:52 --> 00:30:56 That is a tough needle to pass through an energy transition through.
00:30:57 --> 00:31:00 So isn't it just, um, we are gonna come back to this topic again and
00:31:00 --> 00:31:04 again, but it's gonna be interesting to see where is the pushback both
00:31:04 --> 00:31:06 in front and behind the screen.
00:31:07 --> 00:31:12 Um, and we are really looking forward to dialogue with listeners in terms of
00:31:12 --> 00:31:16 their questions and stories and really expertise on how do they navigate
00:31:16 --> 00:31:18 this dramatically changed landscape.
00:31:19 --> 00:31:20 Thanks, Dan.
00:31:20 --> 00:31:23 This is the Energy Matters podcast with Dan and Claire.
00:31:24 --> 00:31:26 Check out more@energymatters.world.
00:31:26 --> 00:31:27 Thanks for listening.