The Senate is going after renewable energy with a vengeance it seems.
The latest version of the Senate’s massive budget bill that is being raced through for a vote as soon as Saturday deals a fatal blow to the use of tax credits in place since 2005 to spur more wind and solar energy and would set a new tax on those projects for the first time, renewable energy proponents said on Saturday.
While solar and wind face deep cuts, the bill maintains or extends support for other clean energy sources including nuclear, geothermal, hydropower, and standalone battery storage with some credits lasting into the mid-2030s. The legislation aims to reduce reliance on foreign-made technologies and redirect subsidies toward domestic manufacturing and “reliable” energy sources, aligning with President Donald Trump’s preferences.
READ: Inflation Reduction Act (IRA): Will the landmark investment survive Trump’s second term? (December 14, 2024)
The clean energy industry warns this bill could cost over 800,000 jobs and billions in investments. Former Trump right-hand man, Elon Musk has been a vocal critic of this move. The tech billionaire took to X where he blasted the bill on Saturday, warning that the bill will “destroy millions of jobs in America” and cause “strategic harm.”
“It is utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future,” he said.
Energy security organization SAFE said in a statement that the bill, as written, would give an advantage to China, which dominates the clean energy and electric vehicle industries and is racing to outpace the U.S. in AI development by taking away financing for energy storage, mineral processing and power projects.
“Where the original Senate version was a recipe for energy stagnation, this is outright energy surrender—all but guaranteeing Chinese dominance of critical minerals, industrial supply chains, and AI development,” said Avery Ash, head of government affairs for SAFE.
The Senate’s bill significantly weakens the financial incentives that have fueled the industry’s growth for the past decade. This means fewer new solar farms, wind turbines, and rooftop installations, especially in areas where projects are already expensive or reliant on imported materials.
In general terms, this could slow the nation’s transition away from fossil fuels at a critical time. Renewable energy sources like solar and wind are among the most effective tools for reducing carbon emissions and addressing climate change. By removing support for these technologies, the bill may discourage investment, increase costs for clean power, and delay progress toward national and global climate goals.
At the same time, the bill shifts focus to other energy sources like nuclear and geothermal, which receive extended support. While these are also low-carbon, they are less scalable or take longer to deploy than solar and wind. In short, the bill redirects the trajectory of the U.S. energy landscape—favoring slower, more centralized solutions over fast, decentralized renewables that have led recent climate progress.
Trump on the evening of June 27 called for the end of the credits and said they no longer need support.
“If, as supporters of the IRA are complaining, repealing these subsidies will ‘kill’ their industry, then maybe it shouldn’t exist in the first place,” said Tom Pyle, president of the American Energy Alliance.