Kentucky’s recent boom in electrical vehicle battery related manufacturing and planned installation of utility scale solar is partially attributable to the increase in federal incentives available to these projects. The Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) are facilitating investment into the market through loans, guarantees, grants, tax credits and other incentives to help accelerate clean energy projects.
These programs are having real impacts in Kentucky:
- BlueOval SK has applied for a loan under the U.S Department of Energy’s (DOE) Advanced Technology Vehicle Manufacturing Loan Program for its EV battery project in Glendale, KY;
- Microvast was awarded $200 million grant from the DOE’s BIL for a polyaramid separator plant in Hopkinsville, KY; and
- Ascend Elements has been awarded grants from the DOE’s BIL totaling $480 million for a facility producing sustainable lithium-ion battery cathode materials made from recycled battery feedstock.
For suppliers to these projects, the IRA offers per unit credits on many components of the supply chain for EV batteries, solar panels, and wind turbines. These components include:
- thin film or crystalline photovoltaic cells,
- photovoltaic wafers,
- solar grade polysilicon,
- polymeric back sheet,
- torque tubes,
- structural fasteners,
- inverters (central, utility, commercial, residential, microinverter or distributed wind inverters),
- electrode active materials,
- battery cells,
- battery modules, and
- wind energy components such as blades, nacelles, towers, and foundations.
The IRA also has transferability provisions allowing domestic and foreign entities to transfer certain credits. This transferability facilitates the monetization of these credits without having to implement a complicated tax equity investment structure.
These wide-sweeping programs and incentives provide additional benefits to companies looking to invest in operations in Kentucky. For more information, please contact Brian Zoeller, who leads the our firm’s Renewables Industry Team, or Kai Bitter, who leads the our International Services Group.
