By: Kiara D. Benac
As the world gets closer to triggering the “tipping point” for global warming, the need for environmentally friendly green technology is undoubtedly apparent. Although everyone at all levels can play a role in combatting climate change worldwide, from individual consumers to corporations to governments, federal policy must lead the way for sustainability. Thus, the United States’ recent enactment of the Inflation Reduction Act of 2022 (“IRA”) and inquiry into using the Defense Production Act’s (“DPA”) funds to combat climate change signals an important step forward that not only helps sustainability initiatives, but also presents new opportunities for intellectual property (“IP”) and patent law.
The Inflation Reduction Act of 2022, signed into law on August 16, 2022, contains different provisions that focus on lowering the costs of prescription medicine, health care, and energy, with the goal of helping to grow the economy. Although the IRA covers a wide variety of topics, it most notably aims at influencing the energy industry to address climate change. It allocates nearly $370 billion over 10 years to tackling climate change, representing the single biggest climate investment in U.S. history, and thus presents significant implications for the renewable energy industry. By providing tax credits and rebates, the IRA incentivizes US companies to manufacture renewable technologies, such as solar, wind, and electric vehicles, which benefit the environment, economic growth, and national security. Eligible solar projects specifically also seek to benefit disadvantaged communities, such as by equitably reducing household energy insecurities.
The Department of Energy (“DOE”) similarly seeks to use the Defense Production Act to spur clean-technology manufacturing and decrease consumers’ energy costs. The prior Administration twice invoked the DPA, which represents a cold-war era law that granted the Pentagon broad powers to procure equipment necessary for national defense; the DPA was used in 2019 to stockpile rare earth minerals and in 2020 to produce ventilators. Although the DOE has not yet taken action to formally invoke the DPA, it recently issued a public request for information seeking input by November 30 on how to best use DPA authority to support the clean technology workforce in combatting climate change. U.S. Energy Secretary Jennifer Granholm explained that the DPA “provides us with a vital tool to make targeted investments in key technology areas that are essential to ensuring power grid reliability and achieving our clean energy future. . . .” Although both the IRA and the DPA focus on a myriad of renewable energy technology, they present a significant opportunity for solar that is reminiscent of the United States’ prior position as an industry leader.
The United States has a longstanding history with solar. The invention of the foundational technology of solar, its silicon photovoltaic solar cell, took place in 1954 in the US. The second American satellite, launched in space in 1958, had solar panels on it. By the 1960s and 1970s, the United States registered most solar patents, thus solidifying American companies’ domination of the global solar market. The focus on the development of new energy technologies increased when the Carter Administration established the Department of Energy in the late 1970s and the Solar Energy Research Institute in 1977. The emergence of technological developments that followed significantly lowered solar costs and paved the way for the commercial viability of solar technology adoption.
Despite such a notable history, the United States does not currently make the bulk of solar panels. The regression began in the 1980s with the weakening of federal environmental rules; the subsequent dismantling of the Department of Energy thus undermined governmental support for alternative energy sources and provided the space for Japan to rise as the prominent leader in the solar industry. American companies now represent only one of the world’s 10 largest makers of solar cells. However, in order to combat climate change and meet the federal government’s goal of a roughly 40% reduction in carbon emissions by 2030 and a net-zero GHG in the industry by 2050, it is vital to increase the implementation of solar projects. Thus, the recent government actions in the IRA and the DPA may contribute to distinguishing the future of solar energy from prior years.
As policy drives the success of solar, the Inflation Reduction Act represents a monumental opportunity for both the future of solar adoption and the need for intellectual property and patent law. Although the IRA represents the power of government spending, it also reflects the power of the private sector as the tax incentives, loans, and grants encourage companies to both utilize existing solar technology and further technological advancements. Notably, the IRA also includes guardrails aimed at addressing potential social ramifications by promoting domestic manufacturing, union labor, and environmental justice concerns.
The initiative to increase investment in clean energy technology provides an opportunity for IP to protect new innovation at all levels of solar technology, from design to installation. Intellectual property plays a necessary role in the future development of solar technologies as patents provide incentives for business investment by protecting technology rights. For example, a 2020 World Intellectual Property Office (“WIPO”) study reflects the central relationship between IP and solar as solar represented over half of the renewable-related patent applications. An EPO-IEA report similarly noted how solar represented the largest volume of low-carbon energy (“LCE”) technologies-related patents between 2000 and 2019, likely because of solar technology becoming increasingly more cost-effective compared to prior hydrocarbon energy sources. However, the increased demand of companies seeking to operate in the renewable energy sector has increased patent litigation related to solar technology.
The United States’ role in patenting new solar technologies is critical for its global leadership as many European solar companies purchase the hardware from patent holders rather than manufacture them on their own. IP not only helps the development of solar hardware but also plays a critical role in businesses’ objectives at each stage, including protections for a company’s branding and marketing.
Although a concern of the IP system is that it may hinder developing countries’ access to advancements, the promise of solar patent protections helps to spur partnerships between public and private entities to implement renewable energy in developing countries. Patents for solar not only represent an early indicator of a country’s economic and environmental benefits but also correlate with a high percentage of private investments in the industry. According to WIPO, “there do not seem to be significant IP barriers hindering the world from benefiting from reduced carbon emissions in developing countries.” Rather, evidence suggests that stronger IP correlates to a developing nation’s scientific advancements. Thus, strong IP protections for solar are necessary to incentivize business investment in developing markets because the threat of climate change makes it pertinent that renewables exist worldwide.
The ability to utilize the power of the sun has existed for centuries, such as people in 700 BC using mirrors and magnifying glasses to make fires bigger. The amount of solar energy that hits the roads in the United States in one year equates to the energy content of fossil fuels the world consumes in one year. The increased focus on incentivizing solar technology thus signals a necessary step in the fight against climate change while highlighting the fiscal benefits of a low-carbon economy. Research shows that the investment in the renewable energy sector will create as many as 1.5 million jobs, catalyze $600 billion in private-sector investment in clean energy, and result in long-term benefits of higher wages, higher GDP, and lower government debt. IP and patent protections will contribute to increasing investments in current solar projects and future solar developments that help make such environmental and economic benefits a reality. There is a beautiful balance in using high technology law to help utilize naturally occurring renewable energies in an effort to save this planet, show respect for nature, and make the world better for future generations.
Student Bio: Kiara Benac is a second-year law student at Suffolk University Law School. She is a staffer on the Journal of High Technology Law. Kiara received a Bachelor of Arts from Wellesley College with a Political Science Major, Economics Minor, and Portuguese concentration.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
