By Laila Kearney

(Reuters) – New solar installations in the U.S. dropped 16% to 20.2 gigawatts (GW) in 2022 from the prior year, largely because a ban on some Chinese goods limited the availability of panels, according to a market report released on Thursday.

   The quarterly report by the Solar Energy Industries Association and research firm Wood Mackenzie revised up previous estimates for the year and projected a broad market recovery ahead as the country’s solar industry was set to benefit from new climate legislation and supply chain onshoring.

“While 2022 was a tough year for the solar industry, we do expect some of the supply chain issues to ease, propelling 2023 growth to 41%,” said Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report.

Utility-scale solar installations fell by about a third year-over year to 11.8 gigawatts, the lowest since before the COVID-19 pandemic, the report said. Still, last year’s general upward revision was a result of more utility-scale projects coming online in the last quarter of 2022 than expected.

The residential segment, meanwhile, rose by 40%, with a record 700,000 homeowners installing rooftop solar in 2022, the report said.

The report projects steady growth, averaging 19% a year, until 2027.

Helping to spur that upswing is a surge in solar panel production within the U.S., with output projected to nearly triple to 25 GW from the current level by the end of this year, the report said.

U.S. President Joe Biden’s Inflation Reduction Act, passed last year, has also helped stabilize the outlook for solar financing, the report said, by providing hefty subsidies to build renewable energy projects.

The greater availability of solar panels is expected to boost installations this year, after projects were slowed by U.S. restrictions on solar panels from China’s Xinjiang over concerns about forced labor.

Reuters reported this week that U.S. imports of Chinese solar panels are picking up after months of gridlock stemming from the forced labor protection law.

(Reporting by Laila Kearney; Editing by Sonali Paul)

U.S. President Joe Biden will propose a budget that would scrap oil and gas industry subsidies, according to a document seen by Reuters, reviving a perennial debate about whether fossil fuel companies should be receiving lucrative tax breaks.

While the proposal has little chance of making it through a divided Congress, it represents a political signal from the White House, which has repeatedly criticized Big Oil for raking in record profits at a time of high consumer energy costs since the Russian invasion of Ukraine.

Here are some details about U.S. fossil fuel subsidies:

HOW MUCH ARE THEY WORTH?

Calculating the cost of U.S. subsidies for the fossil fuel industry is complex because the incentives stretch across the U.S. tax code, but estimates range from $10 to $50 billion per year.

Taxpayer advocates and environmental groups argue the subsidies are inappropriate at a time when the federal government is trying to shift the economy to cleaner forms of energy to fight climate change.

The oil industry counters that the support is needed to ensure ongoing investment and reliable supply.

WHAT DO THE SUBSIDIES INCLUDE?

U.S. oil and gas subsidies include provisions ranging from incentives for domestic production, write-offs and deductions tied to foreign production and income, and approved accounting methods that can reduce the stated taxable value of assets.

One specific U.S. tax break on domestic production, for example, called intangible drilling costs, allows producers to deduct a majority of their costs from drilling new wells. The Joint Committee on Taxation, a nonpartisan panel of Congress, has estimated that eliminating it could generate $13 billion for the public coffers over 10 years.

Another, the percentage depletion tax break, which allows independent producers to recover development costs of declining oil gas and coal reserves, could generate about $12.9 billion in revenue over 10 years, according to the panel.

WHAT HAS BIDEN SAID?

Before taking office, Biden promised to get rid of fossil fuel subsidies as part of a multi-pronged effort to fight climate change that also included ending new drilling on public lands.

These promises have been impossible to keep. For one, they require an act of Congress, and Republicans and some Democrats oppose the removal of fossil fuel subsidies. Secondly, soaring energy prices since the Russian invasion of Ukraine have led Biden to call for more oil and gas, not less.

Ending subsidies for oil and gas is not a new idea, but it has always been difficult: former President Barack Obama also wanted to ditch tax breaks for fossil fuels to show the world that the United States was serious about speeding a transition to clean energy to tackle climate change.

But even with a commanding Democratic majority in the Senate in Obama’s first six years in office, he was unable to kill the subsidies.

WHAT ARE OTHER COUNTRIES DOING?

For many governments, keeping consumer energy prices affordable is the top priority. That’s why numerous countries, ranging from Japan to Brazil, last year imposed or increased subsidies to cushion consumers from skyrocketing prices.

The International Energy Agency estimated that so-called consumption subsidies for fossil fuels doubled in 2022 to $1 trillion globally.

(Reporting by Richard Valdmanis; Editing by Simon Webb and Sonali Paul)

By Ron Bousso and Liz Hampton

HOUSTON (Reuters) -Billions of dollars in clean energy incentives are poised to speed investment on American soil while putting the European Union’s energy transition at risk by luring away money and talent, executives at the CERAWeek energy conference said this week.

U.S. President Joe Biden’s landmark Inflation Reduction Act climate package was signed into law last year and has caused trade tensions between Washington and allies competing for cash and skilled labor to advance a shift from fossil fuels and combat climate change.

Europe can ill afford to see a slowing in the energy transition as the continent struggles with soaring gas and power prices since Russia’s invasion of Ukraine.

The IRA directed some $370 billion in tax benefits to U.S. development of solar, wind, geothermal and other renewable energy technologies, as well as to electric vehicles and projects that reduce or capture industrial greenhouse gas emissions before they reach the atmosphere.

On Wednesday, U.S. Energy Secretary Jennifer Granholm said the Biden administration makes no apologies for the IRA, and challenged EU allies to follow the U.S. lead by providing more subsidies of their own.

“We don’t want to stoke trade wars or anything like that,” said Granholm. “We keep saying ‘have at it – you should do the same thing’ – a little friendly competition is all.”

“But we are serious about bringing supply chains back into this country,” she said.

She called the U.S. incentives “10 years of IRA carrots you can take to the bank” and said more than 100 companies in the electric vehicle supply chain had announced investments in the United States since the law passed.

European energy companies echoed the call for Europe to come up with its own new incentives.

“It would be great to see the European Union policy move from stick to carrot,” said Josu Jon Imaz, chief executive officer of Spanish energy provider Repsol SA. “We don’t need banning technologies, we don’t need restrictions, we need to be attractive.”

Repsol this year expects to spend almost 40% of its project budget in the United States, including $1.5 billion in oil and gas and $1 billion in renewables, compared with 25% going into the Iberian peninsula, Imaz told Reuters.

“Simplicity is from my point of view one of the main features of the IRA and that is very important for investors… you have a broad possibility to invest in many areas in the United States,” he said.

Patrick Pouyanne, CEO of French energy giant TotalEnergies told the conference the IRA was an “invitation to accelerate green infrastructure.”

“Fundamentally, you see it as an opportunity when you put incentives. In Europe, you begin to regulate,” he said, adding that Europe and the United States should consider forming a free trade agreement on renewable energy infrastructure.

“We like the IRA,” said Sanjiv Lamba, CEO of hydrogen producer Linde Plc. It is simpler and easier to understand than the EU’s lengthy policy statements, he said.

Takajiro Ishikawa, chief executive of Mitsubishi Heavy Industries Americas, also said the IRA is an investment magnet.

“All of the capital from advanced countries and even developing countries is flooding to America to take part of the investment that stems from the IRA,” Ishikawa said

He cited a direct pay component of the Act, which allows foreign entities to benefit directly from its incentives.

“You have Uncle Sam paying you for that tax incentive… it’s earth-shattering,” said Ishikawa, whose firm is involved in hydrogen development and carbon capture and sequestration.

Ken Gilmartin, CEO of British engineering firm Wood Plc, said the IRA would put the United States in first place in the decarbonization race.

“That is not a sentence I thought would say five years ago,” he said, noting that former President Donald Trump had withdrawn the U.S. from global efforts to fight climate change.

U.S. executives offered more tempered enthusiasm for the incentives, saying permitting obstacles can add years to development of pipelines or carbon sequestration sites.

White House energy adviser John Podesta said during the week that the Biden administration was working to reduce complexity and timelines for permitting and hoped the U.S. Congress could pass comprehensive reform of the process.

(Reporting by Liz Hampton and Ron Bousso; Editing by Richard Valdmanis and David Gregorio)

By Akash Sriram

(Reuters) – Layoffs by U.S. companies over January and February touched the highest since 2009, with the tech sector accounting for more than a third of the over 180,000 job cuts announced, a report showed on Thursday.

In February alone, layoffs in the United States stood at 77,770, more than five times higher than the 15,245 job cuts announced a year earlier, according to the report from employment firm Challenger, Gray & Christmas Inc.

Graphic: Layoffs in Jan, Feb highest since 2009 https://www.reuters.com/graphics/USA-LAYOFFS/gdvzqmlybpw/chart.png

The number of Americans filing new claims for unemployment benefits rose 21,000 in the week ended March 4, the Labor Department said – the biggest increase in five months.

“Right now, the overwhelming bulk of cuts are occurring in Technology. Retail and Financial are also cutting right now, as consumer spending matches economic conditions,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas Inc.

Tech companies from Microsoft Corp and Google-parent Alphabet Inc to PayPal Holdings have cut thousands of jobs this year in an effort to curb spending and protect margins amid an uncertain economic outlook.

“The layoffs that many of these companies are announcing are welcome to investors, sort of right-sizing the cost structure, rationalizing growth is being rewarded in the marketplace,” said James Tierney, chief investment officer at asset management firm Alliance Bernstein.

Graphic: Tech sector dominates layoffs in Jan, Feb https://www.reuters.com/graphics/USA-LAYOFFS/zdvxdxboqvx/chart.png

Shares of Alphabet, Microsoft, Amazon.com Inc and Meta Platforms Inc have gained between 6% and 54% so far this year, after falling between 29% and 64% in 2022.

Federal Reserve Chair Jerome Powell on Wednesday reaffirmed his message of higher and potentially faster interest rate hikes, which could force companies to slash more jobs.

U.S. firms announced plans to hire 28,830 workers in February, down 87% from 215,127 a year earlier, the report added.

(Reporting by Akash Sriram in Bengaluru; Editing by Devika Syamnath)

(Reuters) -Chinese e-commerce firm JD.com Inc said on Thursday rebuilding consumer confidence would take time after the lifting of strict pandemic-related curbs late last year, as it missed fourth-quarter revenue forecasts.

“The core is the recovery in consumer’s income,” said CEO Xu Lei, adding a recovery in consumption could take a while.

After a brief rise, the company’s U.S.-listed shares turned lower before the market open.

Online direct sales revenue in the quarter grew 1% year on year, missing analysts consensus forecast of 4%, according to a research report by Atlantic Equities after the results.

“The softness was primarily due to weakness in electronics and home appliances as a result of COVID disruption as well as softer property market,” the report said.

JD.com’s net income attributable to ordinary shareholders was 3 billion yuan ($431 million) in the three months ended December, versus a net loss of 5.2 billion yuan a year earlier. Revenue rose 7.1% to 295.4 billion yuan, missing the consensus estimate of 296.2 billion yuan, according to Refinitiv data.

The battle in China’s e-commerce market has been fierce in the past few years, and in 2019 PDD Holdings launched a discounting campaign called the “10 billion yuan subsidy”, which was quickly copied by Alibaba Group’s e-commerce platform.

JD.com followed suit this week, as competition grew even more intense with newcomers Douyin, owned by ByteDance, and Tencent-backed Kuaishou.

Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, an e-commerce consulting firm based in Beijing, said the subsidy programme was an aggressive investment aimed at increasing users.

“JD.com’s subsidy campaign will attract more users to the platform and boost sales in the short-term,” he said. “However, it will hurt JD.com’s margins and possibly weaken the platform’s image. While PDD markets itself as a budget shopping platform, JD.com has built a strong reputation among first-tier city consumers as a marketplace for higher-end goods.”

China Merchants Securities also said in a recent report that the subsidy programme was likely to lead to margin erosion.

Parts of China remained under strict lockdown for most of the December quarter, with shoppers holding back on spending amid continued economic uncertainty.

On an adjusted basis, JD.com earned 4.81 yuan per American depositary share in the quarter, compared with 2.21 yuan per share a year earlier.

The Beijing-based company said in January it was winding down its e-commerce business in Indonesia and Thailand, where it faced stiff competition from Sea Ltd-owned Shopee.

Last month, peer Alibaba Group Holding Ltd reported higher-than-expected revenue in the December quarter.

($1 = 6.9619 Chinese yuan renminbi)

(Reporting by Yuvraj Malik in Bengaluru; and Sophie Yu in Beijing; Editing by Shounak Dasgupta and Mark Potter)