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Inflation Reduction Act Boosts Clean Energy Investment In Texas

The Inflation Reduction Act’s (IRA) tax credits have encouraged private investments in the United States, including Canadian Solar’s new solar production facility in Mesquite, TX. Since the bipartisan federal act passed in August 2022, it has triggered massive investment in clean energy from coast to coast. Canadian Solar’s new facility is a solar photovoltaic module production plant that will create at least 1,500 new jobs and inject $250 million into the region southeast of the Dallas-Fort Worth metroplex.

“Canadian Solar’s new $250 million manufacturing plant in Mesquite will bolster Texas’ status as the energy capital of the world and secure our leadership as a global tech hub,” Texas Gov. Greg Abbott said in a statement.

Photo Courtesy Recurrent Energy

Canadian Solar, headquartered in Guelph, Ontario, decided to break ground in Texas thanks to the massive clean energy tax incentives available through 2032. These credits, enacted by the act’s passage, include credits for manufacturing and technology for any company that manufactures renewable power. 

For Canadian Solar, the incentives made the location choice for their new facility a no-brainer. According to an online dashboard created by Jack Conness, a policy analyst for Energy Innovation, the company is one of more than 100 new clean energy manufacturing projects — worth up to $76 billion in private investments — that have sprung up across America.

“The IRA was essential,” Thomas Koerner, Canadian Solar’s senior vice president, said to Inside Climate News

The IRA has brought good news to Texas overall. According to the Electric Reliability Council of Texas, the amount of new wind power generation in the state has increased substantially over the last year. From August 2022 through July 2023, 28 large wind power facilities have been added to the ERCOT grid. These new sites are expected to bring more than 7,000 megawatts of clean, renewable energy to the Lone Star State.  

Video Courtesy ERCOTISO

The Canadian Solar plant will deploy a new solar cell technology called tunnel oxide passivated contact. This technology has the highest efficiency rating in commercial solar by generating energy from the front and rear of the solar cell. It is expected to significantly reduce consumer and business electric bills and help further decarbonize Texas’ power grid.

“Establishing this factory is a key milestone that will enable us to better serve our U.S. customers with the most advanced technology in the industry,” Shawn Qu, Canadian Solar founder and CEO, said in a press release. “We hope that this is the first of many long-term investments we expect to make in the U.S. as we think strategically about a sustainable and resilient clean energy supply chain.”

Photo Courtesy Canadian Solar Inc. 

“No one is producing more renewable energy than Texas,” Conness told “Inside Climate News.” “Strip politics aside: Texas is an energy hub, and it’s not just oil and natural gas.” 

Clean energy tax credits are proving to have results as big as Texas. Not only are they bringing international companies to America, but they are also creating a more reliable and affordable grid for the state’s residents.

“Texas is an energy production powerhouse, and we embrace an all-of-the-above energy strategy,” U.S. Sen. Ted Cruz said in a statement. “It’s great to see this incredible investment in Mesquite, which will create 1,500 good-paying jobs in Texas. This kind of investment in the Lone Star State is the reason people are flocking to our great state.”


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