The Senate budget bill would essentially kill wind and solar development
From the outset, President Trump’s One Big Beautiful Bill Act was always going to be bad for renewables (and U.S. energy consumers), because it rolled back clean energy tax credits that have spurred billions of dollars of investments into technology like wind, solar, batteries, and electric vehicles . But recent changes to the bill’s text go even further, more aggressively phasing out the current clean energy tax incentives, and also adding a new tax on solar and wind projects. These changes will effectively kill many clean energy projects, cut millions of jobs, and raise the average American’s electricity bills in every state, experts say. The Senate reconciliation bill is now more than 900 pages long. Tucked into that lengthy bill were changes released the night of June 27 that would impose a new tax on solar and wind projects. That tax would essentially be a penalty on these projects tied to the amount of materials they get from China, or other “prohibited foreign entities.” That means solar and wind products would need to drastically change their supply chains—a reshoring process made more difficult without the tax incentives from the Inflation Reduction Act (IRA) of 2022. The bill terminates clean energy production and manufacturing tax credits for projects after 2027. It would also eliminate the EV tax credits by the end of September (under the IRA, these credits were set to start phasing out at the end of 2032), and the residential solar credits after this year (originally, in the IRA,
The Senate budget bill, known as the One Big Beautiful Bill Act, has been met with criticism from experts and industry professionals for its potential to stifle the growth of renewable energy sources such as wind and solar. The bill, which was initially seen as detrimental to clean energy and U.S. energy consumers, has taken a more aggressive stance in phasing out existing tax incentives for renewable energy projects. Additionally, it introduces a new tax on solar and wind projects, further undermining the sector.
The Senate reconciliation bill, now over 900 pages long, contains provisions that impose a new tax on solar and wind projects. This tax is tied to the amount of materials sourced from China or other "prohibited foreign entities." As a result, solar and wind projects would need to overhaul their supply chains, a process that has become even more challenging without the tax incentives provided by the Inflation Reduction Act (IRA) of 2022. The bill also terminates clean energy production and manufacturing tax credits for projects after 2027, eliminating EV tax credits by the end of September and residential solar credits by the end of the current year.
Under the IRA, EV tax credits were set to phase out starting in 2032, and residential solar credits were originally scheduled to end in 2034. The new language in the Senate bill effectively ends these incentives much sooner, which will have significant consequences for the renewable energy sector. The American Council on Renewable Energy stated that these changes "effectively take both wind and solar electric supply off the table, at a time when there is $300 billion of investments underway, and this generation is among the only source of electricity that will help to reduce costs and keep the lights on through the early 2030s."
Wind and solar are recognized as the fastest and cheapest new sources of energy to build, making them crucial for addressing the growing energy demands of the U.S. and the world. The abrupt phase-out of tax incentives and the introduction of a new tax on these projects will likely result in the cancellation of many clean energy initiatives. This, in turn, will lead to the loss of millions of jobs in the renewable energy sector and contribute to higher electricity bills for average Americans across all states.
The impact of these changes will be felt not only in the short term but also in the long run, as the U.S. aims to transition to a more sustainable and resilient energy future. By undermining the growth of wind and solar energy, the Senate budget bill threatens to derail progress toward cleaner air, more affordable energy, and a stronger national energy security. The consequences of these decisions will reverberate throughout the industry, affecting workers, consumers, and the environment for years to come.
