Image of Sun Streams 4, part of the Longroad Energy Sun Streams Complex about 40 miles west of Phoenix. This part of the project will generate 377 MW and have a storage capacity of 1200 MWh. (Photo courtesy of Longroad Energy)
WASHINGTON – The $2 billion Sun Stream Complex in western Maricopa County will soon generate enough power to supply over 200,000 homes. The first phase has been transforming Arizona’s scalding sunlight into electricity for more than three years.
“The projects … benefit from the historic Inflation Reduction Act legislation. The IRA is making the economy move,” Longroad CEO Paul Gaynor said at the April ribbon-cutting. “Right here in Arizona, $2 billion of investment, components made in America, competitive carbon-free electricity and significant job creation. It’s a great story.”
Such stories may not be told much longer, because President-elect Donald Trump has promised to kill the IRA, ending subsidies for such projects.
The IRA, approved in 2022, is President Joe Biden’s signature climate policy. It created tax credits estimated at $370 billion to encourage a shift to solar and wind energy, electric vehicles and other “green” projects as a way of cutting greenhouse-gas emissions linked to fossil fuels.
Goldman Sachs put the value of the incentives at nearly $1.2 trillion by 2032.
“My plan will terminate the Green New Deal, which I call the Green New Scam,” Trump said at the New York Economic Club on Sept. 5. “We will rescind all unspent funds under the misnamed Inflation Reduction Act.”
Overturning the IRA will take an act of Congress, though. Many of Trump’s fellow Republicans represent states that reap big benefits from it, and some have openly vowed defiance if necessary to protect the law.
Longroad officials haven’t specified how much of the Sun Stream Complex financing comes from Biden-era incentives. They declined to comment on the impacts if Trump cuts off funding under the IRA, which is designed both to address climate change and spur targeted U.S. industries.
The complex about 40 miles west of Phoenix is projected to offset about 1.3 million metric tons of carbon dioxide emissions.
Longroad boasts a partnership with Phoenix-based First Solar, the biggest U.S. maker of solar panels.
China dominates the solar panel market, accounting for 80% of global sales. U.S. officials have long accused China of unfair trade practices – keeping prices artificially low to kill off competitors – and have used tariffs to offset such practices.
In May, the Biden administration said it would double tariffs on Chinese solar panels from 25% to 50%.
At the ribbon cutting, Gov. Katie Hobbs called the Sun Stream Complex “a powerful example of how responsible land stewardship, and the ambitious expansion of renewable energy infrastructure delivers a wealth of benefits to Arizona citizens.”
Since 2010, industrial-scale solar installation costs have dropped more than 40%. That has fueled a decade of spectacular growth, averaging 25% per year, according to the Solar Energy Industries Association (SEIA).
“Clean wind and solar energy are cheaper than ever and are getting cheaper each year,” said Ellen Montgomery, public lands campaign director at Environment America, an activist group.
About 11% of electricity in Arizona comes from solar.
The state ranks fifth in total solar capacity, according to the SEIA, which projects that Arizona will add 12 gigawatts of solar generating capacity in the next five years – more than doubling the current 8 GW and enough to power 1.4 million homes.
An analysis from the Net Zero Industrial Policy Lab at Johns Hopkins University found that repealing the IRA would harm U.S. manufacturing, costing jobs and tax revenue and cutting exports by up to $50 billion.
The growing U.S. battery industry relies heavily on federal subsidies, the policy lab said.
“If the goal is to have more domestic manufacturing to be ‘America first’ and to focus on more of the energy types that we have here, then the IRA is essential,” said Autumn Johnson, executive director at Arizona Solar Energy Industries Association. “Otherwise there is very little reason for companies to move their manufacturing back to the United States.”
Democrats controlled Congress when the IRA was approved. All Republicans opposed it. The House approved it 220-207. In the Senate, Vice President Kamala Harris provided the tie-breaking vote.
Republicans will control both chambers starting Jan. 3, giving Trump broad latitude for his agenda. But repealing the IRA will be a challenge. In the Senate, where it takes 60 votes to move legislation, Democrats have enough seats to block any such measure. And many Republicans also embrace the law.
In August, 18 House Republicans, including Rep. Juan Ciscomani of Tucson, wrote Speaker Mike Johnson urging against repeal of the IRA.
They called the legislation flawed but wrote: “We hear from industry and our constituents who fear the energy tax regime will once again be turned on its head due to Republican repeal efforts.
“Prematurely repealing energy tax credits, particularly those which were used to justify investments that already broke ground, would undermine private investments and stop development that is already ongoing,” they warned.
The “worst-case scenario,” they argued, would be cutting off funds for projects already underway that already received federal subsidies.
“Energy tax credits have spurred innovation, incentivized investment, and created good jobs in many parts of the country – including many districts represented by members of our conference,” Ciscomani and the others told the speaker.
On Nov. 25, Trump announced that he intends to impose 25% tariffs on imports from Canada and Mexico and 35% on imports from China, to pressure these countries to halt illegal immigration and drug smuggling.
The tariffs on Chinese solar panels are already higher than that, though solar industry officials said across-the-board tariffs would drive up costs on other necessary components.
Tariffs on solar panels have steered U.S. buyers to other suppliers and imports continue to soar, rising nearly 14% in the first quarter of 2024 to 14.8 GW, according to S&P Global Market Intelligence Global Trade Analytics Suite. That was just shy of the quarterly record.
Nearly 90% of those panels came from Vietnam, Thailand, Malaysia and Cambodia, where some Chinese companies have moved operations to dodge U.S. tariffs.
On Nov. 29, Biden administration trade officials announced tariffs as high as 271% on solar panels from Chinese companies with factories in those countries.
First Solar was among the U.S. companies that brought the complaint that led to the latest round of tariffs.
Johnson, the solar industry executive, said IRA repeal would undermine the point of tariffs on Chinese solar panels and components. Both the IRA and tariffs are meant to encourage domestic production.
“For 30 years, they’ve been pushing globalization and an international supply chain,” she said. “It’s become in vogue now to be protectionist and have a domestic supply chain.”
But building that supply chain takes time and ongoing incentives, she said, adding, “You don’t set up an entire manufacturing ecosystem in two years. It’s just not possible.”