Kentucky Faces Potential Job Losses in Solar and Battery Industries Due to GOP Tax Credit Cuts

Kentucky Risks Losing Thousands of Solar and Battery Jobs if Congress Ends Tax Credits
June 10, 2025
By Liam Niemeyer, Kentucky Lantern

A solar industry organization has issued a warning that Kentucky could lose thousands of jobs in the manufacturing of solar energy components and batteries if clean energy tax credits are eliminated as part of a major bill currently moving through Congress. An analysis released in late May by the Solar Energy Industries Association (SEIA) indicates that Republican efforts to limit or terminate these tax credits could result in a loss of over 300,000 jobs nationwide and jeopardize hundreds of billions of dollars in investments through the end of the decade. While some of these tax credits are technology-neutral, they significantly benefit the solar and battery manufacturing sectors.

The U.S. House has already approved the spending and tax bill, which President Donald Trump has referred to as the “big, beautiful bill.” The Senate is now reviewing it. Republicans are utilizing a process known as reconciliation, which allows the bill to advance with a simple majority in the Senate, bypassing the usual requirement for a three-fifths majority. This means the legislation could potentially be enacted without any Democratic support.

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The House version of the bill proposes to accelerate the phase-out of tax credits that support clean energy production, low-emission hydrogen fuel production, renewable energy components, carbon capture technologies, and electric vehicle purchases. These tax credits were established under the Inflation Reduction Act of 2022, which was championed by the previous Biden administration. An analysis by States Newsroom found that these tax credits predominantly benefit states controlled by Republicans.

In Kentucky, where the solar and battery manufacturing sectors are developing, albeit at a slower rate than in other states, the SEIA estimates that approximately 3,300 existing and potential jobs could be at risk. Brenden Frazier, a board member of the Kentucky Solar Energy Society, expressed concern that the elimination of tax credits could hinder the residential solar industry in the state. He noted that recent “Solarize” campaigns, which encourage residents to adopt solar energy in their homes and businesses, have shown a significant impact on industry growth in Kentucky. He fears that without these incentives, sustaining business in the sector will become increasingly challenging.

Frazier, who is also the director of product and technology for the Puerto Rico-based solar panel manufacturer SOLX, emphasized that losing tax credits would set back solar and battery manufacturing in Kentucky, particularly as the state and much of the country face rising energy demands from new data centers being added to the grid. Although the amount of electricity generated from solar energy in Kentucky is currently minimal, there has been a surge of interest from solar developers looking to establish utility-scale solar installations. Additionally, a Canadian company announced last year that it would invest over $700 million in a manufacturing plant in Shelby County to produce utility-scale battery storage systems.

Republicans advocating for the termination of these tax credits argue that they are excessively costly and give renewable energy an unfair advantage over fossil fuel production. Kentucky U.S. Representative Brett Guthrie stated in a Wall Street Journal op-ed in May that the reconciliation legislation aims to eliminate spending on “Green New Deal-style waste” and reverse the most reckless aspects of the inflated climate spending in the Inflation Reduction Act.

Matt Partymiller, president of the Kentucky Solar Energy Industries Association, conveyed to the Lantern that the accelerated phase-out of tax credits poses a “real threat to manufacturing jobs” and undermines the United States’ ability to compete with China in solar energy. “We have only recently begun to onshore U.S. manufacturing of solar on a significant scale,” Partymiller stated. “Many of these incentives are closely linked to that effort, and if they disappear, it could halt the nascent manufacturing industry that has just begun to take shape.”

In recent years, solar panel manufacturers across the country have significantly increased production to keep pace with the growing demand for utility-scale solar energy development, generating enough solar panels to produce nearly 52 gigawatts of electricity. Historically, China has dominated global solar panel production due to its subsidized manufacturing.

The U.S. Senate is expected to revise the version of the reconciliation bill that passed the House in May. Kentucky Lantern is part of States Newsroom, a nonprofit news organization supported by grants and a coalition of donors, operating as a 501(c)(3) public charity. Kentucky Lantern maintains editorial independence. For inquiries, please contact Editor Jamie Lucke at [email protected].