As initially reported by Inside Climate News, the Midwest is rapidly emerging as a key player in the clean energy transition, spurred by federal incentives and decreasing costs for renewable energy. Companies are investing tens of billions of dollars in new manufacturing operations across the region, signaling a major shift in American industry.

The Impact of the Inflation Reduction Act

In August 2022, Congress passed the Inflation Reduction Act (IRA), which offers substantial tax credits for clean energy projects and purchases. Since then, Midwestern states have received approximately $30 billion in private investments to enhance domestic production of electric vehicles (EVs), batteries, and equipment for solar and wind farms. This data comes from a monthly funding announcement tally maintained by energy think tank E2.

Major Investments in the Midwest

• Michigan: $11.6 billion
• Indiana: $7.8 billion
• Ohio: $7 billion

These states are among the top ten nationwide for private investments in clean energy projects between August 2022 and April 2024. Notably, Michigan and Indiana now surpass Texas in such funding, and Michigan has overtaken Georgia for the most large-scale clean energy projects.

Reviving the Rust Belt

Michael Timberlake, E2 Communications Director, describes this shift as a new era in American manufacturing, likening it to the previous manufacturing boom that once characterized the Rust Belt. Decades ago, cities like Detroit and Cleveland were global hubs for the automobile and steel industries. Today, their industrial legacy makes them attractive locations for expanding clean energy manufacturing operations.

In Michigan alone, eight of the 29 large-scale clean energy projects announced since 2022 are in or near Detroit. This includes a $35 million electric vehicle battery plant planned by an Australian company in Motor City, a nod to Detroit’s automotive heritage.

Nationwide Clean Energy Projects

Since the IRA’s passage, 305 major clean energy projects have been announced across 40 states and Puerto Rico, amounting to over $123 billion in capital investments. The Midwest has received about a quarter of these funds, with a significant focus on electric vehicles. Despite a recent slowdown in sales, EV adoption has surged in the past three years. Americans purchased nearly 1.2 million EVs last year, making them the fastest-growing segment in the car market.

Booming EV Manufacturing

The rise of EVs has greatly benefited Midwest manufacturing. In the past month alone, Toyota announced a $1.4 billion expansion of its EV manufacturing operations in Princeton, Indiana, creating 340 new jobs. Additionally, LG and Honda have begun constructing a $4.4 billion joint venture plant for EV batteries in Jeffersonville, Ohio, expected to generate around 2,200 jobs.

Since 2022, clean energy manufacturing jobs have increased by:

• 18% in Michigan
• 17% in Indiana
• 18% in Ohio

Timberlake predicts that EVs could soon become the second largest employer in the U.S. for clean energy jobs, closely trailing renewable energy employment.

The Southeast: A Competing Hub

While the Midwest sees substantial growth, the Southeast is also experiencing a significant influx of clean energy investments. States like North Carolina, Georgia, and South Carolina have collectively attracted nearly $50 billion since 2022. The Southeast, excluding Texas and Oklahoma, has received about a third of all private investments in clean energy projects post-IRA.

Conclusion

The Midwest is playing a crucial role in America’s clean energy transition, attracting billions in investments and creating thousands of jobs. As the region leverages its industrial history to embrace the future, it is poised to become a major hub for clean energy manufacturing, rivaling even the rapidly growing Southeast.