Reduce Greenhouse Gas Emissions
After 18 months, the largest investment plan for climate energy in the history of the United States is about to land.
On August 12 local time, the US House of Representatives passed the “Reducing Inflation Act” with 220 votes in favor and 207 votes against. The bill was passed in the Senate with a narrow margin of 1 vote on the 7th, and will then be handed over to President Biden to sign into law.
The above-mentioned bill covers various aspects such as medical care, climate and tax reform, and is expected to bring in fiscal revenue of US$740 billion (about 5 trillion yuan) and expenditure of US$433 billion (about 2.9 trillion yuan) .
Among them, 369 billion U.S. dollars (about 2.5 trillion yuan) is planned to curb climate change and promote the use of clean energy, making it the largest climate investment in the history of the United States.
The above-mentioned climate investment plan is mainly divided into five parts, including reducing energy costs for consumers, investing in clean energy production, reducing carbon emissions, promoting community environmental equity, and developing climate-smart agriculture and forestry, etc. The goal is to reduce carbon emissions by 2030 40%.
The plan includes a number of tax credit projects in the field of clean energy, involving solar energy, wind power, electric vehicles and other industries.
The bill will provide 60 billion U.S. dollars (about 405 billion yuan) to carry out investment tax credit (ITC) and production tax credit (PTC) projects in related industries. Among them, there are 10 billion U.S. dollars (about 67.4 billion yuan) of investment tax relief, which is planned to encourage companies to invest in clean energy manufacturing facilities.
Another production tax credit of up to $30 billion (about 202.2 billion yuan) is used to speed up the manufacture of solar panels, wind turbines, batteries, and the processing of key minerals such as silicon and lithium. It is also the single largest expenditure in the climate investment plan. For individual consumers, the bill provides 10-year consumption tax credits in clean energy fields such as wind energy and solar energy. This measure hopes to effectively reduce the prices of clean energy products such as heat pumps, rooftop solar and water heaters, and promote green and energy-saving consumption by households.
For low- and middle-income consumers, the bill will provide tax deductions of US$4,000 (about 27,000 yuan) and US$7,500 (about 50,000 yuan) for used cars and new cars when they purchase new energy vehicles.
The bill also plans to issue $2 billion (about 13.4 billion yuan) in cash subsidies to encourage companies to transform existing auto manufacturing equipment into new energy vehicles, and provide $20 billion (about 13.48 billion yuan) across the United States. 100 million yuan) loan for the construction of new energy vehicle manufacturing facilities. In addition, the bill would use the Defense Production Act to promote heat pump and critical mineral processing projects, and invest in national laboratories to accelerate breakthrough energy research.
An analysis released by Princeton University shows that after the implementation of the bill, one of the most affected industries will be the wind energy and photovoltaic industries. At present, the annual investment in this field in the United States is about 177 billion U.S. dollars (about 1.1 trillion yuan), and it is expected to nearly double to 321 billion U.S. dollars (about 2.1 trillion yuan) by 2030. Princeton University predicts that starting from 2024, the United States will add 39GW of wind power and 49GW of photovoltaic power every year on average.
According to data from the US Energy Administration (IEA), in the first half of this year, the US added 15.1GW of new utility-scale power generation. Among them, the newly added power generation of wind power is 5.2GW, accounting for 34% ahead of natural gas, photovoltaics and energy storage. It is expected to add 6GW in the second half of the year.
Wind power can be divided into offshore wind power and onshore wind power. Previously, due to legal prohibitions and high costs, the development of offshore wind power in the United States has been suspended for a long time. At present, there are only two small projects in Rhode Island and the coast of Virginia. , with a total generating capacity of 42MW.
Last year, the Biden administration set a goal to develop 30GW of offshore wind power by 2030. The White House announced in June that it had reached a new partnership with 11 states on the east coast of the United States to jointly establish a domestic supply chain for the offshore wind power industry.
According to Bloomberg News, the bill will lift a 70-year-old ban in US federal law and open the coastal waters of five overseas territories of the United States for offshore wind power development. It also lifted a 10-year moratorium on wind lease sales off the coast of Florida, Georgia and the Carolinas.
Statistics from the International Energy Agency (IEA) show that due to the impact of the epidemic and tariff investigations, in the first half of this year, only 4.2GW of new photovoltaic power generation was added in the United States, accounting for 28%. Nearly half of the 29.4GW of total U.S. planned capacity additions in the second half of the year are expected to come from photovoltaics, reaching 13.6GW, the IEA said. As a result, photovoltaics will surpass wind power and natural gas and become the largest new source of power generation in the United States in 2022.
Zhongtai Securities pointed out in the research report that the demand for photovoltaic modules in the US market is strong, and the product prices are relatively high, which is one of the main battlefields for global photovoltaic companies to compete. Last year, the United States achieved 26.9GW of newly installed photovoltaic capacity, a year-on-year increase of 40%, ranking second in the world, second only to China’s 54.9GW.
