Layoffs could be coming to Namaste Solar, a Colorado-based company that installs solar panels on homes and businesses, if the Republicans’ federal budget bill is made law in its current form.
That’s because the legislation would cut off millions of dollars of funding for clean energy projects, including taxpayer credits for installing solar panels on houses. And that would almost sink Namaste’s business in Denver and Boulder.
“They don’t want any residential solar after December of this year,” Jason Sharpe, Namaste’s chief executive officer, said of the bill, which is supported by President Donald Trump. “Sixty-five percent of the jobs in the solar industry come from the residential market, and so what we’re looking at is the lack of a residential market of any kind, leasing or direct-to-consumer, and that means significant layoffs for our business.”
While the Republican budget bill, which narrowly passed the House of Representatives on May 22, has received much attention for drastic cuts to Medicaid and SNAP benefits that would fund tax breaks, it also rolls back tax credits and low-interest loans for a wide variety of clean energy projects.
The bill’s budget cuts would repeal or quickly phase out whole categories of tax credits and loans for things such as home improvements for consumers, electric vehicles, wind and solar energy production, hydrogen energy, nuclear energy and carbon capture.
Executives who lead Colorado energy companies, both big and small, said eliminating tax credits will decimate the progress made in recent years in the United States as the country seeks as many sources of energy as possible to supply growing demand. It could also lead to higher electricity bills for consumers and eliminate jobs, sending more jobs to China and other Asian markets where production is cheaper and more advanced.
“I don’t look at what we do as green or blue or red,” said Jon Chase, vice president of government relations for Vestas, a company that makes turbines and other parts for windmills in Windsor and Brighton. “An electron doesn’t have a color. We need all of it to meet the demand that we have.”
Environmentalists are also warning that the cuts would be detrimental to Colorado’s goals of eliminating 100% of greenhouse gas emissions in the state by 2050 because it would increase a reliance on fossil fuels to power the grid and fuel all the cars and trucks on the road. They also warn that the cuts would threaten Colorado’s waterways because of the toxic chemicals that are released by burning them.
“It’s leading to dirtier air and dirtier water — things no one voted for,” said Patrick Drupp, the Sierra Club‘s director of climate policy.
The budget bill eliminates nearly $1 billion in clean energy and transportation investments approved by Congress in the 2022 Inflation Reduction Act.
In the almost three years since the act was passed, 3,800 new jobs have been announced in Colorado, along with nearly $362 million in investments from federal grants and loans. Seventy-four new clean energy and transportation facilities have begun development, and 43 have begun manufacturing American-made products, according to an analysis by Energy Innovation Policy & Technology, a non-partisan energy and climate policy think tank.
Battle brewing over bill
Colorado’s House delegation voted along party lines. Now it goes to the Senate, where the Republican majority leadership hopes to hold a final vote before July 4.
A political battle is expected, and Colorado’s representatives and senators spent the last week meeting with constituents to make their pitch on whether or not it should be approved.
Rep. Gabe Evans, a Republican representing the 8th Congressional District, held a news conference at the state Capitol to praise the bill he voted for, saying it “delivers the resources to protect our country, to protect our border, to get violent criminals out of our community.”
But U.S. Sen. Michael Bennet, D-Colorado, warned that “the stakes are really, really high for Colorado.”
Bennet met last week with executives from 10 Colorado companies to discuss the budget cuts. The tax credits were “doing the job that they were supposed to do and doing that, I think, very, very well in Colorado. Now we’re at risk of them being basically completely ripped away and dismantled.”
Will Toor, executive director of the Colorado Energy Office, which promotes clean energy programs in the state, said the bill would drive up the cost of electricity in Colorado, force people to pay more for cars and trucks, and reduce the amount of money people can receive through tax credits to improve the energy efficiency of their homes.
Colorado started its path toward reducing greenhouse gas emissions during the first Trump administration, and then the Biden-era plans for boosting alternative energies gave the state more momentum, Toor said. He said the state can still reach its climate goals, but it will have to work harder to do so.
“The federal government is trying to make the transition to clean energy harder and slower,” he said.
Uncertainty cripples planning
Robert Kenney, president of Xcel Energy’s Colorado operations, said the repeal of the Inflation Reduction Act would not stop his company from moving away from coal. But Xcel would be forced to push the expense of moving to renewable sources onto customers as the company tries to keep up with a growing demand for electricity.
“These projects are made, I won’t say made possible, but they’re made more affordable for our customers by virtue of production and investment tax credits,” Kenney said. “And I like to emphasize the fact that what this means is that our customers are able to achieve our collective climate goals at the lowest possible cost, and the loss of production and investment tax credits would increase the cost of these projects for our customers.”
He also said the budget bill is injecting instability and uncertainty into the construction industry, and Xcel plans its major construction projects as far out as 10 years.
“That makes it impossible to be able to plan in any kind of meaningful way,” he said.
Peak Energy, a sodium-ion battery systems manufacturer, runs a research and development center in Broomfield where scientists and engineers are working to develop technology that can be built and used in the United States. The batteries, which are bigger than an SUV, are used to store the electricity generated by solar or wind so that there is a power supply when the sun sets or the wind stills.
The budget bill, as written, jeopardizes that work in multiple ways, said Cameron Dales, Peak Energy’s co-founder.
Twenty years ago, no large-scale batteries were made in the U.S. Now, a handful of companies are building them here, but they are foreign-owned, Dale said.
“Our mission is to be the first American-owned, American-made battery company in the United States,” Dales said. “And the IRA started that process and has been incredibly successful in actually catalyzing investments in those factories.”
Peak Energy is planning to build a $1.5 billion, 1,500-employee factory to build the batteries in the U.S., with four Wall Street investment firms reviewing the proposal even as the budget bill winds its way through Congress, he said. The bill would penalize companies for buying those Chinese-made parts, which would lead them to keep their manufacturing facilities offshore to avoid those extra financial costs.
“I can tell you, if it passes the way it is today, I will cancel the project,” Dales said.
‘Kneecap our progress’
As for Colorado’s plans to eliminate greenhouse gas emissions, the tax bill would “kneecap our progress,” said Katie Belgard, a Conservation Colorado vice president.
All of the renewable energy plans help Colorado reduce the amount of greenhouse gases — carbon dioxide, methane, nitrous oxide and other chemicals — that trap heat in the atmosphere. That increased heat raises global temperatures and creates climate change, which leads to more drought, more intense wildfires and extreme weather.
Increasing the supply of renewable energy also helps reduce ozone pollution — a problem that plagues the Front Range during the summer when nitrogen oxides and volatile organic compounds bake in the sun and create a brown smog.
“It is the most anti-environmental bill we’ve seen in the history of the country,” she said. “This has been a giveaway for polluters and the fossil fuel industry here in Colorado.”
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