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Policy Watch

The IRA’s Coming China Change

And more of the week’s biggest news around renewable energy policy.

Trump.
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Sourcing requirements – As we explain in our Q&A today, there’s momentum building in Washington, D.C., to attach new sourcing requirements to an IRA credit for advanced manufacturing known as 45X.

  • 45X is supposed to supercharge production of battery and solar components, as well as key minerals and materials for those components that are largely imported from China or what U.S. trade officials believe are Chinese pass-throughs.
  • Some U.S. companies are now quietly urging Congress to enact a “foreign entity of concern” requirement to 45X that would essentially stop battery and solar manufacturing plants with Chinese business involvement from qualifying.
  • Why? Well, doing this would definitely insulate the credit from GOP repeal by tying it not to rapid decarbonization but instead American blue collar jobs.
  • Patrick Donnelly, chief commercial officer for Anovion, told attendees of a Hill briefing I moderated earlier this week that he wants to see this happen because it would be a “game changer” for domestic manufacturing. “I’ve heard some Republicans talking about it already.”
  • But it could also undermine the effectiveness of the credit for climate purposes. Similar requirements were tacked onto the IRA’s EV consumer credit that curtailed its reach and meant many cars couldn’t access the benefit.

Virginia’s planning – The state of Virginia is looking at its own plans to override local objections, which would make it one of the few GOP-led states to do so.

  • The state’s commission on electricity regulation proposed a draft plan late last month that would enable companies to appeal local rejections. Under that plan, the state would create a siting advisory board that would give insights as to whether a rejection was contrary to the overall state’s power needs.
  • It’s not a sure shot. The commission acknowledged legislation will be necessary to make this plan a reality, and the state’s divided government has rarely found agreement with energy policies. But all those Virginia data centers are going to need power from somewhere.

Here’s what else we’re watching…

  • So much money is going out the door right now: In the last week, the Energy Department has announced billions in new conditional loan commitments. Good news for the Grain Belt Express transmission line!
  • Included in those funds – a gusher of offshore wind research money.
  • Environmental justice advocates worry there’ll be less of a rush to award money they won in the Inflation Reduction Act before Trump takes office.

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Q&A

How Developers Should Think of the New IRA Credit Rules

A conversation with Scott Cockerham of Latham and Watkins.

How Developers Should Think of the New IRA Credit Rules
Heatmap Illustration

This week’s conversation is with Scott Cockerham, a partner with the law firm Latham and Watkins whose expertise I sought to help me best understand the Treasury Department’s recent guidance on the federal solar and wind tax credits. We focused on something you’ve probably been thinking about a lot: how to qualify for the “start construction” part of the new tax regime, which is the primary hurdle for anyone still in the thicket of a fight with local opposition.

The following is our chat lightly edited for clarity. Enjoy.

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Hotspots

An Influential Anti-ESG Activist Targets A Wind Farm

And more of the week’s most important news around renewable energy conflicts.

Map of renewable energy fights.
Heatmap Illustration

1. Carroll County, Arkansas – The head of an influential national right-wing advocacy group is now targeting a wind project in Arkansas, seeking federal intervention to block something that looked like it would be built.

  • Will Hild, executive director of Consumers’ Research, recently called on the Trump administration to intervene against the development of Scout Clean Energy’s Nimbus wind project in Arkansas. Consumers’ Research is known as one of the leading anti-ESG advocacy organizations, playing a key role in the “anti-woke” opposition against the climate- and socially-conscious behavior of everyone from utilities to Anheuser-Busch.
  • In a lengthy rant posted to X earlier this month, Hild pointed to Carroll County’s local moratorium on wind projects and claimed Nimbus being built would be “a massive win for ESG radicals – and a slap in the face for local democracy.”
  • As I told you in April, the Nimbus project prompted Carroll County to enact the moratorium but it was grandfathered in because of contracts signed prior to the ban’s enactment.
  • However, even though Nimbus is not sited on federal land, there is a significant weak point for the project: its potential impacts on endangered birds and bats.
  • Scout Clean Energy has been working with the Fish and Wildlife Service since at least 2018 under Trump 1.0. However, the project’s habitat conservation plan was not completed before the start of the current Trump term and Scout did not submit an application for Nimbus to receive an incidental take permit from the Service until May of this year.
  • Enter the Trump administration’s bird-centric wind power crackdown and the impact of Hild’s commentary comes into fuller focus. What will happen to all the years of work that Scout and the Service did? It’s unclear how the project reckons with this heightened scrutiny and risk of undue federal attention.

2. Suffolk County, New York – EPA Administrator Lee Zeldin this week endorsed efforts by activists on Long Island to oppose energy storage in their neighborhoods.

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Spotlight

Trump’s Permit Freeze Prompts Some Solar to Eye Exits

Is there going to be a flight out of Nevada?

Solar in Nevada.
Heatmap Illustration/Getty Images

Donald Trump’s renewables permitting freeze is prompting solar companies to find an escape hatch from Nevada.

As I previously reported, the Interior Department has all but halted new approvals for solar and wind projects on federal lands. It was entirely unclear how that would affect transmission out west, including in the solar-friendly Nevada desert where major lines were in progress to help power both communities and a growing number of data centers. Shortly after the pause, I took notice of the fact that regulators quietly delayed the timetable by at least two weeks for a key line – the northern portion of NV Energy’s Greenlink project – that had been expected to connect to a litany of solar facilities. Interior told me it still planned to complete the project in September, but it also confirmed that projects specifically necessary for connecting solar onto the grid would face “enhanced” reviews.

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