Which States Would Lose the Most if the IRA is Repealed?

How a potential IRA repeal would impact clean energy deployment in each state

This story is a part of a series exploring the impacts of Republicans’ current attempts to repeal the Inflation Reduction Act. You can read some recent stories in the series here, here, and here. I’m also posting a short article and data visualization about the bill everyday on LinkedIn. Come say hi!

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For the last month, I’ve been crunching numbers and running different analyses to understand the potential impact if Congress repeals the Inflation Reduction Act (IRA).

As I’ve written elsewhere, I feel confident that this legislation will have more impact on America’s clean energy and climate trajectories than any other policy this decade. The stakes of this bill couldn’t be higher.

Last week, I published an analysis on where clean energy projects were at risk of losing their tax credits—and potentially their financial viability—if the Senate passes their mega-bill. The upshot of that analysis was that more than 600 GW of planned renewable projects are now at risk of being cancelled—equivalent to half of America's entire electricity generation capacity.

This week I wanted to look at which states would be impacted most by an IRA repeal—and in particular how a repeal would reduce clean energy deployment in each state.

What I found surprised me. If the IRA is repealed, the states that would see the biggest reductions in renewable energy capacity by 2035 are mostly located in the South.

Open this article in your browser to download the data, interact with the table above, and see the full list of states.

North Carolina is one state that would lose a lot of potential renewable energy capacity if the IRA is repealed. It’s also home to one of the most important Senators in the bill’s negotiations. Republican Senator Thom Tillis has voiced many concerns about repealing the IRA this year, arguing that it would create “whiplash” for investors and “devastate” America’s ability to innovate. But he’s also under pressure by party leadership to vote for the bill.

If the investment tax credits (ITC) and production tax credits (PTC)—two of the workhorses of the IRA—are left in tact, North Carolina is projected to have 28 GW of renewable energy generation capacity by 2035. That would enable the state’s old coal power plants to retire, saving families and businesses on their electricity bills and cleaning up the state’s air. It would also bring billions of dollars of investment and thousands of jobs to the state.

But all those benefits would vanish if Tillis votes to repeal the IRA. Without the ITC and PTC, North Carolina is projected to have about 14 GW of renewable energy generation capacity—about half as much compared to a scenario where the IRA is preserved.

In states across the South—most of which are led by Republicans in the Senate—we see the same picture: Renewable energy’s growth would be significantly hindered by an IRA repeal.

The main reason the South would be impacted so disproportionately is the region’s lack of clean energy and climate policies. For decades state leaders have fought off any attempts to regulate utilities and force them to build cleaner energy. While other states passed Renewable Portfolio Standards (RPS) that forced utilities to procure clean power, Southern states took a more laissez-faire approach. Those that did pass RPS bills, passed weak ones.

RPS policies also explain why some states are likely to build as much clean energy whether the IRA is repealed or not. At first glance, that’s a bit weird. How can the repeal of the country’s largest climate bill in history not impact the amount of clean energy some states deploy? But it makes sense when you drill down into the unique policy environments of these states.

In the last decade, California, Massachusetts, Minnesota and a handful of other blue states passed bills mandating a 100% clean grid at some point between 2040 to 2050. As a result, utilities and other power providers must procure more clean energy each year, driving steady demand for renewables regardless of what happens in Congress. The cost of that power will rise as subsidies fall, but the total amount of clean electrons coming onto the grid across different scenarios shouldn’t change much.

Still, the impact of less clean energy growth in states without these policies will have a significant impact—on both the country’s emissions trajectory and its clean energy industry.

If the IRA is repealed, the U.S. would build 290 gigawatts less renewable capacity by 2035. That includes 148 GW less utility-scale solar and 142 GW less onshore wind—each a roughly 30% reduction compared to current policy projections. Annual solar deployment over the next decade would fall from an average of 36.5 GW to just 21.7 GW per year, while wind would drop from 32.7 GW to 18.4 GW. That slowdown would ripple across the industry, affecting everything from job growth and manufacturing to the pace of emissions reductions over the next decade. The country would emit one billion tons per year more in 2035.

Repealing the IRA would slam the brakes on the fastest-growing part of America’s energy economy. The impact would be felt across the country. But Republican-led states in the South, finally on the cusp of a clean energy boom, would bear the most environmental and economic pain, losing not just clean power, but economic momentum and a once-in-a-generation opportunity.

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