A recent study warns that repealing federal clean energy tax credits under the Inflation Reduction Act could cost Texas’s economy billions of dollars and threaten tens of thousands of jobs.
The analysis by Energy Innovation projects that Texas could lose more than $87 billion in gross domestic product by 2034 if the tax credits are rolled back. The state’s GDP is expected to drop by $17.17 billion in 2030 and by $20.32 billion in 2035 alone.
Employment in Texas’s clean energy and manufacturing sectors could shrink by about 120,000 jobs by 2035, the study said.
The potential repeal would also raise energy costs for Texas households, with electricity bills expected to increase by roughly $780 annually and vehicle fuel costs by about $420 per year by 2035.
Since the proposal to repeal the tax credits surfaced, more than $14 billion in clean energy projects and approximately 10,000 associated jobs have been canceled nationwide, with Texas among the hardest hit, according to industry reports.
Texas’s clean energy manufacturing sector, which currently contributes $18 billion annually to the U.S. economy and supports 122,000 jobs, faces uncertain prospects if the tax incentives disappear.
Experts warn the rollback could also undermine U.S. competitiveness in the global clean energy market and impact rural Texas communities that have benefited from renewable energy investments.
“This legislation threatens to stall progress on clean energy development in Texas, putting economic growth and jobs at risk,” the report states.
Texas has been a leader in renewable energy, particularly wind and solar, and industry advocates are urging lawmakers to maintain federal support to preserve momentum.
The Inflation Reduction Act tax credits have been a key driver of investment in clean energy nationwide since their enactment in 2022.