Tim Crowley, Lithium Americas vice president of government and external affairs, gives a tour of the company’s technical center in Reno on July 15, 2024. (David Calvert/The Nevada Independent)
About a month after President Joe Biden signed the Inflation Reduction Act (IRA) — a landmark, multibillion dollar law making the biggest climate investment in American history — Lithium Americas opened the doors to its Reno-based lithium processing facility.
The Canadian company began exploring northwestern Nevada for lithium — the soft, silvery element used to power batteries of electronic goods — nearly 20 years ago. By the time the law was passed in 2022, the company already had been through the federal permitting process to open a lithium mine at Thacker Pass, near the Oregon border.
What it needed was funding; and with the IRA came an opportunity. Among the law’s many provisions was a tenfold expansion of a Department of Energy loan program with a mandate to front the capital required for massive clean-energy projects, including those that could mine and produce lithium batteries.
With an expected $3 billion in capital costs, Lithium Americas applied for funding. This March, the Department of Energy announced a conditional commitment of $2.26 billion to fund the construction of an on-site lithium carbonate processing plant.
The company expects to close on the loan soon (in advance of the 2024 election) and get to work. With a project-labor agreement already in place, Lithium Americas’ goal is to open its mine in 2027.
And therein lies the promise — and the problem — for Democrats.
The IRA has undoubtedly been a boon for Nevada, bringing in unprecedented federal dollars, spurring private investment and creating jobs.
But with the landmark law hitting its two-year anniversary this August, the gap between its passage and tangible results — such as the opening of the Thacker Pass mine — could be its undoing. Republicans have threatened to revoke many of the law’s provisions if they take control of government, halting progress before it even begins. This is because the IRA has not shown a significant immediate impact on reducing inflation, and in fact has potentially contributed to the economic mess.
“We have all these burgeoning industries getting ready to just take off and totally transform Nevada,” said Rob Benner, the secretary-treasurer of the Building and Construction Trades Council of Northern Nevada, the union that has already secured a project-labor agreement to do construction for Lithium Americas. “That could all stop, and then we're back to square one, where we’re not getting the assistance from the federal government.”
In interviews, more than a dozen industry players, lawmakers and environmental advocates touted the law’s transformational potential and existing impact in Nevada. But the bureaucratic and corporate timelines of the IRA’s funding provisions move much slower than the election cycle.
One industry expert recalled a June interview meeting with Energy Secretary Jennifer Granholm, who put up a chart during a presentation at Truckee Meadows Community College showing the number of projects nationwide that had received funding from the IRA. Many projects would be getting loans from the Department of Energy’s Loan Program Office (LPO) — which the IRA increased funding for exponentially — but were years away from being operational.
‘Extraordinary and game-changing’
When the Inflation Reduction Act passed both chambers of Congress it authorized $783 billion in new spending to stimulate clean energy and combat climate change through a combination of tax credits for consumers and companies and new grant programs to fund states, localities and tribes’ clean energy-focused programs.
In Nevada, where an abundance of natural resources and a business-friendly tax code had already attracted companies working in the lithium and solar energy spaces, the IRA has been a boon. Not all states are created equal in the IRA’s eyes — much investment, ironically, has been concentrated in red states across the South, but experts and industry watchers from Reno to Las Vegas to the White House say a perfect storm of factors makes the state poised to capitalize on the IRA.
“Nevada is positioned to own the full finish line when it comes to the shift to clean transportation,” White House climate adviser Ali Zaidi said in an interview.
The lithium battery and solar industries already have a Nevada footprint, from Tesla and Redwood Materials in the north to an array of solar installation companies in the south. An existing union-ready workforce in both parts of the state gives it a leg up to compete for federally funded projects, where prevailing wage standards are baked into the investment formula — particularly in construction.
The IRA’s role has been to provide the economic certainty for companies to conduct business in the state — and in that sense, it’s already proven successful.
“Just looking at these federal investments — the size of the federal investments — in these companies within the lithium supply chain … it's been extraordinary and game changing,” said Caleb Cage, the coordinator of the Nevada Battery Coalition, a lithium industry trade group launched last year with many members who have successfully claimed the tax credits.
The White House estimates that private companies, spurred by IRA incentives, have poured $10 billion into the electric vehicle, battery and clean-power industries in Nevada.
Climate Power, a Democratic-aligned clean-energy advocacy group, estimates that nearly 20,500 clean-energy jobs have been announced in Nevada since the law’s passage two years ago, primarily in the battery sector. Despite being ranked 32nd among the states in population, more clean-energy jobs have been created in Nevada since the IRA’s passage than all but six states, per Climate Power’s analysis.
Projects such as the Unimacts factory — a Las Vegas solar manufacturing facility that hired 80 new people to triple production due to IRA incentives — have come online. NV Energy was able to fund 40 percent of the gross cost of its Reid Gardner Battery Energy Storage System northeast of Las Vegas through the relevant IRA tax credit, Cage said — and pass those savings onto utility customers.
Stephen Hamile, the chief operating officer of SolUp, the state’s largest independently owned solar company, said the IRA has become a raison d’etre for the business.
“It really legitimized the industry,” Hamile said. “Solar was kind of like cryptocurrency — you heard about it, some people adopted it, some people dabbled in it, but a lot of people were afraid of it.”
Benner said even though many of the IRA funds — including the loans to companies such as Lithium Americas and Redwood Materials — haven’t closed yet, the law has injected a level of certainty into the clean-energy economy in Northern Nevada. From his perspective, that creates a lot of construction jobs for his members — and a need for the level of workforce development and apprenticeships that unions are best equipped to provide.
“Things that have started over the last 10 to 20 years have just been put on steroids,” Benner said. “It's just really been accelerated.”
Timeline
Despite an enormous push between universities, community colleges, industry and governments to begin bringing projects online, many of the law’s biggest impacts won’t be felt until after the 2024 election.
“The full economic and employment benefits from these investments in this industry in our state are yet to be seen,” Cage said. “But I think they will be significant.”
For example, the Nevada Clean Energy Fund (NCEF) is currently working to implement the Solar for All Program, after receiving $156 million in IRA grants to provide education and low-cost or no-cost loans and rebates for rooftop solar for low-income households and multifamily buildings.
The money has been obligated, but the federal government — requiring detailed planning from each state — hasn’t released the money.
Greg Zegas, the NCEF director of investments, expects the money to be available by the end of September — insulating that program from any legislative changes in the next Congress, and giving the agency time to budget out program funds and identify project contractors. But as a five-year program, the move toward solar energy in low-income communities (and any potential bill savings) will largely be felt in the future.
Is Nevada ready?
Everyone from industry leaders to labor to politicians agree — the key to Nevada unlocking the potential of the IRA lies in its ability to conduct sustainable workforce development, long a policy goal in a state still heavily dependent on gambling and hospitality. Skilled workers are needed to do rooftop solar installations; workers need to be trained on clean-energy systems eligible for IRA tax credits such as heat pumps and other energy-efficiency technology.
Nevada’s clean-energy industry is clearly growing — the Department of Energy’s annual employment report found that Nevada had the second-highest growth rate for energy-efficiency jobs between 2022 and 2023, at nearly 7 percent, and the state increased its overall clean energy jobs total by nearly 4 percent.
But the industry remains small — less than 3 percent of the state’s total jobs in 2023, per data from DOE and the state. Forty-one percent of employers across the energy sector reported difficulty hiring — a significant percentage, but good for 12th lowest among states.
Beyond the typical challenges of lower educational levels and a transient population, Nevada faces workforce development challenges amid the rush of new technologies in the battery recycling sector, where Nevada companies such as Redwood Materials and American Battery Technology Company — IRA loan beneficiaries — are pioneering the process. Cage compared training the workforce for the lithium battery industry to “building an airplane in flight.”
And the majority of the job growth in each clean sector DOE measured came in construction — illuminating that much of the state’s new clean-energy projects are in an incipient phase.
“Everybody in this landscape in Nevada realizes that in order for Nevada to fully take advantage of all these federal funds, there has to be a larger workforce,” said Zegas. “Whether it's solar or home energy upgrades, like heat pumps, there needs to be a sort of rising of the tide.”
Gov. Joe Lombardo said that Nevada is open for business. To fully live up to that credo, the administration understands that it needs to prepare and train the right workforce to take those jobs of the future.
“The energy industry is growing,” Dwayne McClinton, the director of the Governor’s Office of Energy, said in an interview. “We must have the workforce to support the growing energy industry needs.”
Lombardo and McClinton have advocated for an “all-of-the-above” energy approach. While that language is common among climate-conscious Republicans, Nevada has little to no oil and produces relatively small amounts of natural gas, importing much of its fuel from California. What it does have is significant amounts of solar, geothermal and other noncombustible renewable-energy sources. To that end, the state has continued to apply for federal grants, and McClinton says the office’s objective is to “leave no money on the table.”
“The goal is the same — to decarbonize at the end of the day,” McClinton said. “We're taking steps to decarbonize. I think it just [has] to be a realistic, holistic and a sensible approach to that.”
McClinton described a two-pronged approach of chasing federal funds and using policy to attract clean-energy developers and manufacturers. Nevada’s generous state tax abatements — which incentivized companies such as Tesla to set up shop in Northern Nevada — are a prime example.