Iowa alternative energy sector stands to lose tax incentives in budget bill
WASHINGTON — Iowa stands to lose tax incentives created in the Inflation Reduction Act which have helped the state invest in alternative energy and manufacturing jobs.
The Trump administration is scaling back clean energy investments, which would affect several sectors of the Iowa economy. Prompted by federal tax incentives, Iowa has leveraged more than $4.2 billion in private investment in 60 alternative energy facilities. Iowa’s sales of zero-emission vehicles could drop by at least 22% if the bill is passed.
Daniel O’Brien, senior modeling analyst for the nonpartisan think tank Energy Innovation, said the current provisions are crucial to clean vehicle sales and the associated manufacturing jobs accompanying them.
“These tax incentives were really driving development of manufacturing in the United States,” O’Brien pointed out. “We see a loss of 840,000 jobs in the next five years.”
The House-passed budget bill awaits action in the Senate, where it faces opposition from Democrats and some Republicans.
Iowa is among the nation’s top wind energy producers and was before the incentives but O’Brien noted even the now robust sector of the clean energy economy would feel the effects of repealing the tax breaks being considered by Washington lawmakers.
“The decisions they make are really going to be critical to development of manufacturing in the U.S.,” O’Brien emphasized. “To the AI race, which depends on low energy costs, and on how people like you and me can afford our own electricity bills at the end of the day.”
O’Brien stressed in addition to a projected 26-cent-per-gallon hike in gasoline prices, Iowans would see a 2.3% increase in residential electricity and natural gas prices under the current budget proposal.
