Federal cuts spark debate over clean energy future in North Carolina
As North Carolina positions itself as a leader in clean energy, federal spending cuts are raising concerns about the future of renewable energy investments and jobs in the state. At a press event Thursday, climate and economic policy experts warned that reductions in federal funding threaten progress made under the Inflation Reduction Act, while some conservatives argue that market forces will sustain clean energy growth regardless.
Concerns over federal cuts
Since the Inflation Reduction Act was signed into law in 2022, North Carolina has seen more than $20.44 billion in clean energy investments—the fifth-highest in the nation—and more than 17,000 new jobs, particularly in rural areas, according to Climate Power. But panelists at the event, including State House Democratic Leader Robert Reives, warned that recent federal spending cuts could jeopardize that progress.
“This does nothing but set us back,” Reives said. “It takes away jobs, it takes away people’s ability to have choices on energy, and ultimately, it takes away North Carolina’s ability—and the United States’ ability—to stay competitive in what is clearly a growing market.”
Panelists emphasized that incentives from the Inflation Reduction Act have driven clean energy investments, with consumer tax credits and rebates helping more than 85,000 North Carolina families afford home energy upgrades in 2023 alone.
“Federal cuts will make it harder for the people of our state to make ends meet and for us to meet our climate goals,” said Alex Campbell of the NC Budget and Tax Center. “Without these programs, families in North Carolina are going to face higher costs—not just from reduced public services, but from ripple effects throughout our economy.”
Business impact
Much of the debate centers around North Carolina’s booming electric vehicle and battery manufacturing industry, which has attracted billions in private investment.
“In the past two years, North Carolina has become a leading hub for electric vehicle and battery production,” said Stan Cross of the Southern Alliance for Clean Energy. “As of June 2024, our state ranked third in the country for EV and battery manufacturing investments, at $20.2 billion, creating over 16,000 jobs—many of them in rural communities.”
Cross argued that federal incentives have played a critical role in attracting these companies. “If these tax credits are eliminated, we risk losing our competitive edge,” Cross said.
But not everyone sees it that way.
Mark Fleming, president and CEO of Conservatives for Clean Energy, said he isn’t concerned that federal cuts will slow the state’s progress.
“North Carolina has been a leader for years in the clean energy economy, a leader in the Southeast and in the country,” Fleming said. “And we believe that the clean energy economy will continue to grow in North Carolina due to private investment.”
Fleming said technological advancements have made clean energy increasingly cost-competitive and expects the industry to keep expanding without federal mandates.
“We believe in free markets,” Fleming said. “Technology is leading to rapid decreases in the cost of solar and wind, and we believe that will continue. Clean energy technologies can compete on their own.”
State vs. federal policy
Fleming pointed to support across the aisle for clean energy at the state level as a key reason why North Carolina will remain a leader in the sector.
“There has been bipartisan leadership in North Carolina on clean energy going back a decade plus,” Fleming said. “Clean energy has provided jobs, and it has provided revenue for our state’s counties that, quite frankly, are struggling and need that revenue.”
While Fleming believes North Carolina’s clean energy future is secure without federal intervention, Reives warned that even the perception of reduced federal support could discourage further investment.
“If businesses are getting the signal that the U.S. is deciding to pull out of the clean energy space, they’re not going to be as anxious to locate here,” Reives said. “We spent years recruiting companies like Toyota to build in North Carolina. If we stop supporting clean energy, we could lose that momentum.”
What’s next?
The North Carolina General Assembly is expected to debate energy-related legislation in the coming months, and stakeholders on both sides will be watching to see whether state lawmakers move to reinforce or roll back clean energy initiatives. Meanwhile, businesses and workers in the clean energy sector wait to see how federal policy shifts will impact their industries, which make take years to play out.
Gov. Josh Stein, a Democrat, has expressed strong support for clean energy and is expected to continue advancing the North Carolina Clean Energy Plan, which aims to cut greenhouse gas emissions, modernize the grid and expand renewable energy across the state.