Will Congress pull the plug on Ohio’s clean energy momentum?

Thousands of Ohio jobs are at risk as Republicans in Congress decide the fate of the Inflation Reduction Act’s clean energy tax credits, according to two new reports.

The 2022 federal climate law spurred announcements of more than $7 billion in clean energy projects in Ohio. An analysis by the nonpartisan business group E2 links those investments to nearly 5,000 announced jobs.

A separate research paper published this month by the BlueGreen Alliance, a coalition of labor unions and environmental groups, used broader criteria to conclude that Republicans’ ​“One Big Beautiful Bill Act” puts more than 17,000 direct manufacturing jobs at risk in the state. The ripple effect on other sectors that work with clean energy companies could bring the number to more than 91,000.

Cleveland, Ohio-based solar company YellowLite is among the firms already pausing hiring in response to federal policy uncertainty. The company said it had planned to bring on 20 to 25 more workers this year to keep up with growing business. Those plans are now on hold.

If the threatened cuts happen, the company fears business will ​“decline dramatically,” said Al Frasz, YellowLite’s commercial business manager. ​“We will probably be in a mode of having to lay off 35% to 40% of our employees.”

Frasz is one of dozens of business, labor, civic, and other leaders in Ohio calling upon Congress to revise the current reconciliation budget bill to preserve the IRA tax credits and other clean energy provisions.

Ohio is among the top states to benefit from the Inflation Reduction Act’s clean energy incentives. As of last summer, its 9^th Congressional District had eight announced projects — more than any other district nationwide, according to E2, which advocates for policies that benefit the economy and the environment. Ohio also ranked among the top 10 states nationwide for announced projects.

“Businesses are reacting to the Senate’s proposal, like the House’s, that would drastically scale back the very tax credits that had been driving an American energy and manufacturing boom,” said Michael Timberlake, E2’s communications director, when the group released its data on May 29.

Part of the Inflation Reduction Act’s success in spurring clean energy investments stems from its 10-year time frame for tax credits, noted Joe Flarida, executive director of Power a Clean Future Ohio, which works with local governments on clean energy. That signaled to businesses and communities that there would be some stability, which is important for business planning.

“What we saw was this massive movement and response to use and leverage those tax credits in a productive way,” Flarida said. Pulling the rug out from under organizations that planned or broke ground on projects expecting those tax credits ​“is going to be a wasteful-government-spending dilemma,” he continued. ​“What we’re going to see is a ton of investment that’s taken place over the past couple of years completely vanish overnight. And this is just bad policymaking.”

The Ohio Chamber of Commerce would like the Inflation Reduction Act’s tax credits to continue through 2035, said Tony Long, the organization’s general counsel and director of energy policy. The state needs more energy generation, he added, noting that Ohio imports about a quarter of its electricity from other states.

“These credits will help continue to drive new development of energy sources,” Long said, noting that IRA tax credits have helped small and medium-sized businesses grow.

Private businesses won’t be the only ones impacted if Congress cuts or severely curtails the clean energy credits. ​“Direct-pay” provisions allow local governments and schools to access incentives after completing qualifying projects. Cities and counties in Ohio are already counting on more than $160 million in savings from those credits, 30 local government leaders told the state’s congressional delegation this spring.

Consumers also can expect higher electricity prices in the absence of clean energy credits, since less incentive to build new power plants means less energy in the marketplace. Full repeal of the tax credits could cost U.S. households an average of more than $110 per year, and businesses could expect a 10% increase in electricity costs, the Clean Energy Buyers Association estimated in February.

Debates continue on the federal reconciliation bill, which Republicans aim to pass in July. Impacts on businesses, workers, and communities will depend on the final provisions.

“This is in the politicians’ hands — if they’re going to continue these credits or they won’t,” said David Green, director of the United Auto Workers’ Region 2B office, which covers Indiana and Ohio. The labor union’s members have benefited from IRA-spurred growth in the automobile industry’s electric vehicle sector. ​“The reconciliation bill threatens to upend all the positive stuff we have worked towards building good manufacturing jobs, working with companies throughout Ohio and Indiana. … Good union jobs are on the line, and we need to do everything we can to protect the middle class of this country.”