Chas Macquarie: The economic benefits of the Inflation Reduction Act

On Aug. 22 we celebrated the two-year anniversary of the Inflation Reduction Act (IRA). The IRA, together with the Bipartisan Infrastructure Law (BIL), has supercharged clean energy and related industries in Northern Nevada and throughout the United States.

The IRA has spurred Northern Nevada to become a battery recycling and manufacturing hub. After passage of the IRA, Tesla committed to invest over $3.6 billion to continue the expansion of the Gigafactory in Storey County. This will add 3,000 new jobs and two new factories: a 100 GWh cell factory, with capacity to produce enough batteries for 1.5 million light duty vehicles annually, and their first high-volume semi electric truck factory.

Redwood Materials has facilities in Carson City and Storey County that recycle lithium-ion batteries to reclaim and refine the basic battery materials so that they can be used in new batteries. They have received a $2 billion loan commitment from the U.S. Department of Energy and have committed to investing an additional $3.5 billion of private capital to expand their facilities. Redwood will produce enough anode and cathode materials for one million electric vehicles annually by 2025 and five million by 2030. They expect to add 1,600 permanent jobs.

These projects, together with other clean energy projects, will add a total of over $9 billion of private investment and over 10,000 new jobs in Northern Nevada.

In October 2023, Reno was named one of 31 Tech Hubs by the Biden Administration. Headed by the University of Nevada Reno (UNR) the tech hub is funded by a $21 million federal grant to foster the Lithium Loop – which includes mining the raw lithium, processing it, and making it available for new batteries. This, together with the Redwood Materials recycling facility and the expanded battery manufacturing capability in the Tahoe Reno Industrial Center, makes Northern Nevada a hub of the clean energy economy.

No Republicans voted for the IRA which has supercharged the Northern Nevada economy. Instead, Republicans pretend that investing in clean energy is bad for the economy. Project 2025, the Republican blueprint if Trump is elected as the next president, calls for ending clean energy subsidies and tax credits and terminating the Department of Energy’s clean energy programs. This would decimate the Northern Nevada economy and likely cause the private investment commitments to disappear.

In an August poll, 74% of Nevadans – including 60% of Republicans – backed existing tax credits for new and used electric vehicles and clean energy home efficiency measures. The IRA provides as much as $15,700 in tax credits to homeowners who complete energy-efficient home upgrades such as heat pumps, battery storage, and solar panels. Starting in 2025 there will be up to $22,000 in upfront rebates available for low- and middle-income families for energy-efficient upgrades. Republicans have promised to eliminate all of these if elected in November.

Republicans pretend that they are the party that grows the economy and creates jobs. But this is simply not true. Historically, the economy has done much better when Democrats are in charge.

In April the nonpartisan Economic Policy Institute found that since 1949 the nation’s annual real growth has been 1.2 percentage points higher under Democratic administrations than under Republican administrations and total job growth averages 2.5% annually under Democrats compared to barely over 1% under Republicans. Business investment is more than double the pace under Democrats than under Republicans; average rates of inflation are slightly lower under Democrats; and families in the bottom 20% of the economy experience income growth almost twice as fast under Democrats than under Republicans.

A recent analysis by former Goldman Sachs managing director H. John Gilbertson shows that Democratic administrations reduce the U.S. budget deficit and that stock market returns are 60% higher under Democrats than under Republicans.

It is very clear that if you want to continue strong economic growth, good paying jobs, and support for families in all income brackets in Nevada – vote for Democrats in November.