U.S. Congress passes anti-clean energy budget bill: An industry reacts

Solar and other clean energy industry members react to the passage of the “One Big, Beautiful Bill Act.”

The U.S. Congress passed the budget reconciliation bill, the “One, Big Beautiful Bill Act.” The budget includes massive cuts to clean energy spending, including early sunsets of clean energy tax credits. 

Under the Biden-era Inflation Reduction Act of 2022, solar and wind energy projects were offered a 30% Investment Tax Credit (ITC) or an electricity generation output-based Production Tax Credit (PTC), with a phase-out of the credits beginning in 2032.  

Now, under the new budget, solar and wind projects placed in service after December 31, 2027 are not eligible for the credits. The budget also cut the 30% residential solar and home energy efficiency upgrade tax credit, making projects ineligible if they are not placed in service by the end of this year. 

The bill also placed steeper requirements for a tax credit adder for projects containing U.S. domestic content, increased restrictions on content from countries designated as foreign entities of concern (FEOC) and cut the electric vehicle tax credit, among many other changes. Other zero-emission technologies such as geothermal, nuclear and hydrogen are set to be phased out in 2032, unchanged by the bill. 

The bill marks an early end to what was expected to be a long-term clean energy industrial policy, one that was backed by representatives from both sides of the aisle. Despite an “all the above” approach Trump said he supported on the campaign trail and in the president’s early days in office, the administration and Congress have targeted solar, wind and electric vehicles as targets of budget cuts. 

Industry reactions 

Congress has turned its back on the very industries that are adding the majority of the new electricity generating capacity to the grid.  

“America is in the midst of an energy manufacturing boom, with new solar and storage factories opening across the country thanks to the forward-looking policy this law will upend. Now many of these brand new factories will be forced to shut down and lay off thousands of workers, gutting communities that were finally seeing the kind of industrial revival rural America needs and handing an untimely and strategic victory to China.” Abigail Ross Hopper, president and chief executive officer, Solar Energy Industries Association 

“By rapidly sunsetting demand incentives, Congress is pulling the rug out from under manufacturers, disrupting the reshoring process that is well underway, and conceding the market to China in one year, when the runway of the domestic content incentive ends.” Mike Carr, executive director, Solar Energy Manufacturers for America Coalition 

“By voting for this bill, Congress chose to raise energy prices, put at risk thousands of energy projects already under development, destabilize investor confidence in energy markets, and put hundreds of thousands of American jobs at risk. This bill rewrites long-standing tax policy and layers on immediate, punitive sourcing requirements.” Jeff Cramer, president and chief executive officer, Coalition for Community Solar Access

“Even without support from the federal government, state leaders must take steps to ensure we keep the lights on and manage costs. With the right policy direction, governors, legislators, and regulators can take the lead on removing the barriers to building a better electric grid, and lowering costs to build and operate advanced energy. To unlock new development, policymakers can make it easier and more financially enticing for consumers to switch to more resilient energy solutions at their homes and businesses, they can speed up timelines for new energy infrastructure projects by fixing antiquated siting and permitting rules, and they can put more technology solutions to work with much needed changes to energy market regulations.” Heather O’Neill, chief executive officer, Advanced Energy United

“This Trump energy tax will cost electricity customers billions of dollars in higher bills. And costs for things like cleaner cars, solar energy and efficient air conditioners will skyrocket. Oil executives, industrial loggers and coal CEOs can all celebrate today as they gain unprecedented access to drill, log and mine on our public lands. The rest of us will soon find no trespassing signs on lands that have belonged to all of us for more than a century.” Mark Drajem, Natural Resources Defense Council

“Despite this setback, the clean energy industry remains committed to building the future. We’re already driving more than $300 billion in private investment, delivering reliable power, and creating jobs in every region of the country. Stable tax policies would have allowed us to do even more.” Ray Long, chief executive officer, American Council on Renewable Energy

“America’s electricity demand is projected to surge by as much as 50% by 2040. That growth requires every available source of reliable power, including the clean energy technologies that are the only shovel-ready sources of additional power and the low-cost option across much of the nation. Our economic and national security requires that we support all forms of American energy. It is time for the brawlers to get out of the way and let the builders get back to work.” Jason Grumet, chief executive officer, American Clean Power Association