Yellen Warns Against Ending US Clean Energy Tax Credits
U.S. Treasury Secretary Janet Yellen cautioned that rolling back the clean energy tax credits established by the Biden administration would increase costs for consumers and undermine new investments in U.S. manufacturing. Speaking at Wake Tech Community College in North Carolina, Yellen highlighted that families nationwide have claimed $8.4 billion in energy tax credits, which help lower long-term energy costs.
Impact of Potential Policy Changes
Yellen's remarks come amid Republican presidential candidate Donald Trump's pledge to rescind many of the clean energy measures introduced in the 2022 Inflation Reduction Act (IRA). Trump has criticized these policies as a "green new scam" and proposed redirecting the funds toward infrastructure projects like roads and bridges.
Yellen argued that eliminating these credits would be a "historic mistake," as it could lead to higher costs for working families and jeopardize ongoing investments in U.S. manufacturing—investments that also create jobs, many of which do not require a college degree. She also warned that such a rollback could benefit China, which is heavily investing in clean energy technologies.
Economic and Political Context
Yellen's comments underscore the economic benefits of the IRA's tax credits, aligning with Vice President Kamala Harris' proposals to address rising living costs. Polls indicate that Harris is gaining traction in North Carolina, a state Trump narrowly won in 2020, potentially shifting the state in the upcoming election.
Yellen noted the positive economic indicators, such as a 3% growth rate in the second quarter, declining inflation, and low unemployment. However, she acknowledged that essential household expenses, including healthcare, housing, and energy, remain high. Reducing these costs is a top economic priority for the administration.
In North Carolina alone, 90,000 families have claimed over $100 million in residential clean energy tax credits for items like solar panels and energy storage batteries. The average claim in the state amounts to $5,000, with additional credits for energy efficiency measures totaling $60 million.
Educational and Policy Insights
During her visit to Wake Tech, which trains workers for the electric vehicle and efficient building technologies industries, Yellen highlighted the benefits of the clean energy tax credits. She also drove a Mustang Mach E, an EV whose battery contains Chinese content and no longer qualifies for a $7,500 tax credit under the IRA.
Yellen's remarks reflect broader concerns about the potential impact of policy changes on both consumer costs and the domestic clean energy sector.