Energy storage likely to enjoy bipartisan support under Trump, IRA repeal unlikely  

Given the vagueness of some of Trump’s proclamations on the trail, it’s not entirely clear what that might mean. Ideologically, it seems the threat (or promise) to re-withdraw from the Paris Agreement and to support fossil fuels represents a less-than-favourable stance on renewable energy. At the same time, his recent close association with Tesla CEO Elon Musk implies the potential for a softer or even supportive stance towards batteries in vehicles and on the grid.   

We ran a three-part series of pre-election commentaries from the RE+ trade show, which ESN Premium subscribers can read here, here and here.

The general theme emerging from those interviews was that energy storage enjoys enough bipartisan support and is viewed as sufficiently economically viable by utilities and grid planners in the US for demand to remain robust.

However, several participants said tariff hikes on imports—especially from China—could slow down battery storage deployment, at least for as long as it took for the US to create domestic supply chains or alternative sources for key materials and components.

The potential for a rollback on support through tax credits and transferability, or even attempts to tear down the Inflation Reduction Act (IRA) and other legislation entirely, was also said to cast a pall of uncertainty over investor and developer actions.   

Post-election, Energy-Storage.news has heard exclusively from analysts at Wood Mackenzie and Rho Motion, as well as industry voices at battery energy storage system (BESS) integrator Fluence and tax credit transferability specialist Crux.  

‘IRA likely to remain in place, but energy storage to suffer heightened impact if transferability is removed’

Allison Weiss, global head of energy storage, power and renewables at market research and analysis firm Wood Mackenzie says that although the Inflation Reduction Act most likely won’t be repealed under Trump, some aspects could be at risk.

Transferability rules introduced with the IRA make it easier to buy and sell investment tax credit (ITC) and production tax credit (ITC) incentives, and thus open up the tax equity market. If those got into the Trump firing line, the effect on storage could be acute, according to the analyst.

Weiss also noted the potential impact of increased import tariffs on Chinese-made battery products.

“Our base case outlook – the scenario we consider most likely – is that the Inflation Reduction Act (IRA) remains in place. However, assuming the House stays Republican-controlled, given the results for the presidency and the Senate, we would consider it more likely to end up in what we had considered an unlikely extreme downside scenario with 30% less buildout of renewables.

This is due to a potential quicker phase-out of ITC & PTC tax incentives, removal of bonuses and manufacturing incentives, and increased protectionism, including higher tariffs (possibly 60-100% for batteries from China).

Availability of tax incentives, when still provided by law, would also be at risk if transferability is removed, especially for energy storage.

A catalyst for reviewing investment incentives in the IRA will be from the expiration of Trump-era tax cuts from his first term. Reducing IRA incentives, though, would require overcoming the groundswell of local and state-level policy support for investment in clean energy in the United States,” Weiss says.

‘BESS market to remain strong, but tariffs could hurt US integrators and developers’

The US industry will likely remain strong during the forthcoming administration, according to Iola Hughes, head of research at Rho Motion, the downstream BESS industry analysis service launched by lithium-ion (Li-ion) battery materials supply chain analysts Benchmark Mineral Intelligence.

However, as we heard in the run-up to the election, the imposition of higher tariffs than the hike from 7.5% to 25% in 2026 already committed to under Joe Biden could mean trouble for the downstream industry in the near term. In the longer term, it may be a constructive action, incentivising US investment from domestic and overseas players—including inward investment from China, Hughes says.

As with Wood Mackenzie’s Allison Weiss, Rho Motion’s head of research says a wholesale rollback of the IRA was not expected, but again, changes to specific aspects of the legislation could be significant.

“Regardless of the election outcome, the US BESS market is set to remain strong, with significant investment deployed and an ever-growing project pipeline. The Trump victory does, however, raise some questions on supply due to the current heavy reliance on Chinese cells and the risk of higher tariffs.

The near-term effect of an increased tariff on Chinese batteries for BESS (at present, not due to hit until 2026) would hurt US integrators and developers at a time when little alternative exists domestically. Beyond this, higher tariffs could potentially lead to accelerated build-out of a domestic supply chain, with the possibility of Chinese players bringing production to the US and, therefore, investment and jobs.

In terms of the wider support for battery manufacturing and building of storage under the Inflation Reduction Act, these seem less likely to face a full repeal due to the level of bipartisan support, particularly from Republican-led states benefiting from related investments.

Changes to the details within the IRA are more likely, such as more emphasis on domestic content or foreign entities of concern (FEOC) rules extending to the BESS market,” Hughes says.

‘Energy storage is one of the best ways to reduce electricity costs’

Ahead of the election, Fluence’s Americas president John Zahurancik had said that in both Red and Blue states, energy storage enjoys support: in simple terms, Republicans see the jobs and economic growth created and Democrats see the benefits in climate and societal terms.

Zahuarancik had also played up his own company’s early-mover advantage in securing domestic battery cell supply from an AESC Envision factory in Tennessee and in opening Fluence’s own module production line in Utah.

That onshoring strategy not only allowed the system integrator to avail of higher domestic content-rated tax credits introduced under Biden, but insulate it from the impacts of rises in import tariffs, the Fluence co-founder said.

Post-election result, Zahurancik is similarly bullish, noting also that whichever candidate won, the conclusion of the presidential race brings a degree of certainty to the market. Energy storage will continue to enjoy big picture support from both sides of the aisle, he says.

“Having a clear election outcome is tremendously beneficial to US investment. As a US company with a rapidly growing base of American factories, employees, suppliers, and customers, Fluence is excited to continue investing in a secure energy future working with President Trump and the next Congress.

Energy storage is one of the best ways to reduce the cost of electricity, ensure a reliable power system, and take advantage of an all-of-the-above approach to energy independence,” Zahuarancik says.

‘Tax credit transferability enjoys bipartisan support, too’

In February, Alfred Johnson, CEO of tax credit financing specialist Crux told Energy-Storage.news Premium that over the preceding year, energy storage tax credits had been the highest-priced among clean energy technologies.

Johnson said the tax credits enabled the Internal Revenue Service (IRS) to introduce a new supply of capital for clean energy investments. Energy storage ITCs were priced at US$0.94 on the dollar, compared to a range of US$0.89-US$0.934 for other technologies over a 12-month period.

ITCs were available for solar PV prior to the Biden-Harris administration, and available for energy storage as long as it was paired with and directly charged from solar PV generation. However, Biden’s tenure ushered in the tax credit for standalone energy storage projects too, transforming the industry, along with transferability.

The genie is likely out of the bottle on tax credit incentives and both Republican and Democrat politicians have seen positive impacts from the ITC and PTC, Johnson said in the wake of the 2024 election result.

“Tax credits have been a cornerstone of US energy policy for decades and installations of wind and solar saw significant growth during the first Trump Administration.

Since 2022, these credits have been extended and expanded to support a wider range of technologies — battery storage, biogas, carbon capture, nuclear, and domestic manufacturing. These credits are creating millions of construction, manufacturing, and mining jobs across the country.

This powerful industrial policy is already cultivating resilience to our energy infrastructure and domestic supply chains for minerals and manufactured components.

Recently, 18 House Republicans wrote a letter to Speaker Johnson urging him to protect energy and manufacturing tax credits, citing that they’ve spurred innovation, investment and jobs in their districts. Repealing the credits would raise the cost of energy for consumers and businesses, hurt workers, and increase taxes on companies.

Those outcomes are unlikely to be attractive to the Administration and Republicans in Congress,” Johnson says.