Funding Freeze Slows Battery Manufacturing
Energy storage is a crucial component of the US energy transition. On-site and grid-scale energy storage offset variable renewable energy generation from wind and solar, and the US has invested heavily in increasing lithium-ion battery storage capacity and lowering prices. However, the recent freeze on energy-related programs threatens those investments and the long-term future of renewable energy at any scale.
Battery Manufacturing Programs Frozen
In January 2025, several programs administered by the Department of Energy were frozen by the Department of Government Efficiency (DOGE), stopping work and funding for several critical programs, including:
Home Energy Rebates
Electric Grid Upgrades
Hydrogen Hub Investments
Manufacturing Investments
Weatherization Assistance Programs
Deep beneath the headlines, the Battery Manufacturing Program was frozen. Like the other initiatives, the freeze comes without Congressional approval or review, an action deemed illegal by members of the House Appropriations Committee and Subcommittee on Energy and Water Development and Related Agencies.
Passed under the Inflation Reduction Act, funding the initiatives would have saved American families up to $38 billion in energy costs between 2022 and 2030. Americans can expect annual home energy costs to increase by 12% without reinstatement.
These costs will impact businesses as well. In more energy-intensive industries like agriculture and manufacturing, cost increases could exceed that 12% price rise, contributing to a possible job loss estimated at around 350,000.
Battery Manufacturing in Focus
The DoE froze all procurement and funding actions, including annual appropriations, for programs associated with the Infrastructure Investment and Jobs Act (IIJA) and the IRA. Despite a court order, funding is still frozen.
The Battery Manufacturing and Recycling Grants Program has a $3 billion funding appropriation from Congress to ensure the US has a competitive domestic battery manufacturing and recycling capacity. The program will expand manufacturing capacity to insulate the US from overreliance on foreign products.
The program is forecast to create over 6,000 direct operating jobs and 13,000 construction jobs in the US. Twenty-five. The battery manufacturing funding freeze impacts 25 states, including Michigan, which benefits the most from the program with $500 million. Only three states were slated to receive more funding.
What It Means for Businesses
If you made clean energy upgrades in 2024, qualifying incentives should still apply if you claimed them correctly on your taxes. This includes on-site battery storage, rooftop solar, and other investments. It’s still too early to tell how 2025 investments will be handled.
In the long term, these freezes introduced an unparalleled uncertainty that will discourage manufacturing investment for at least the next four years. This puts the US further behind foreign manufacturers and will likely increase production and consumer prices for the next decade. Courts have ordered funding released, but DOGE and the administration-appointed Department of Energy officials have not complied despite multiple lawsuits. The delay exacerbates the United States’ battery manufacturing disadvantage every day, week, and month.
Invest in a Brighter Future with Keen
Keen Technical Solutions is committed to confidently helping local businesses navigate the turbulent energy environment. Our consultants can help you identify the most impactful energy improvements, find rebates and grants, and manage the project from start to finish. See what experience does for your organization - contact us today.