Mother Jones illustration; Zbynek Burival/Unsplash
Under President Donald Trump, Republicans have promised to cut key components of the Inflation Reduction Act, Biden’s signature green legislation. The bill pledged $370 billion in funding for clean energy investments. About a third of that money has been invested in the last two years. A majority of it went to Republican districts—about 85 percent of project investments. Yet, Trump still has vowed to “rescind all unspent funds under the misnamed Inflation Reduction Act.”
Mother Jones spoke with Carl Weatherley-White, Head of Capital Markets for Greenbacker, in January, before the beginning of the second term, about the potential impacts of the next administration repealing the IRA. Greenbacker is a renewable energy investing company with over 450 projects around the US.
This interview has been edited for clarity and condensed.
Do you think existing renewable energy projects will be hit by a new Trump administration repealing the IRA?
In the unlikely event that the IRA is repealed, then you have a lot of turmoil. A lot of projects that are under development will have to either renegotiate their power purchase agreements to get higher pricing. If they cannot do that, they would have to kill the projects.
How do you prepare for a full repeal?
We’ve accelerated some of our development so that we can grandfather projects. We have a pipeline of projects under development and under construction that work under the current tax law. I think if the change did happen, then we would revisit our development pipeline, and prioritize projects. We’d have to really rerun the numbers on all our projects and decide which ones still are still financeable and which ones aren’t.
How would the repeal trickle down to the public?
It basically gets at the cost of electricity. You have utilities that are delivering electricity, and they set rates at a level that create a return on their investment that is established by regulators. If a tax credit goes away, then they would have to increase rates to cover their costs. And so given the amount of electricity predicted to come from renewable energy, without a tax credit I think you’d likely see significant pressure to increase electricity prices.
And honestly, that would create another political problem for any administration.
Is there anticipation of some of these projects that have been funded by IRA facing increased scrutiny or auditing?
I don’t think so. The rules are very detailed. There’s already a lot of scrutiny, not only by the Internal Revenue Service, but also by all of the market participants: lawyers, accounts, bankers, investors. They’re all very careful to make sure that the products are well structured and they’re safe. It already is a pretty robust ecosystem.
