After initially proposing a softened version of the Inflation Reduction Act cuts in the House’s proposed budget legislation, the Senate’s Republican leadership flip-flopped this weekend and proposed not only stiff IRA cuts but an outright excise tax on wind and solar projects.
The bill now terminates the 45Y clean energy production tax credit and 48E clean energy manufacturing credit for wind and solar projects after 2027, and it levies a penalty against new wind and solar projects that come online after 2027 unless they can completely disentangle their supply chains from prohibited foreign entities like China.
It would also end the 25E, 30D, and 45W electric vehicle credits after September and the 25D residential solar credit after this year.
Former Trump senior adviser Elon Musk on Saturday said the Senate’s latest draft of the bill “will destroy millions of jobs in America and cause immense strategic harm to our country!”
“Utterly insane and destructive,” he said in a post on X, formerly Twitter. “It gives handouts to industries of the past while severely damaging industries of the future.”
The legislation was released just after midnight on Friday and advanced in the Senate with a 51 to 49 vote late Saturday night. The two Republican holdouts were Sen. Rand Paul, R-Ky., and Sen. Thom Tillis, R-N.C.
”When you rush a bill and you don’t think through the implementation, you don’t get it right,” Tillis said in a Senate floor speech on Sunday, warning that energy shortages could occur if the bill is passed in its current state.
President Trump responded to Tillis’s defection with Saturday posts on Truth Social in which he vowed to meet with Tillis’s potential primary challengers and accused him of loving “China made windmills that will cost a fortune, ruin the landscape, and produce the most expensive Energy on Earth.” Tillis announced Sunday that he is not seeking reelection.
Senators plan to resume voting Monday, as Republicans are still aiming to get the legislation to Trump’s desk by his July 4 deadline.
In a Saturday release, Solar Energy Industries Association President and CEO Abigail Ross Hopper called the bill a “direct attack on American energy, American workers, and American consumers.”
“If this bill passes, Americans will pay the price — literally,” she said. “Power bills will rise. Factory jobs will vanish ... All while we become more dependent on foreign energy and more vulnerable to blackouts.”
American Clean Power Association CEO Jason Grumet said Saturday, “These new taxes will strand hundreds of billions of dollars in current investments, threaten energy security, and undermine growth in domestic manufacturing and land.” He added that those hit hardest would be rural communities that would have been the greatest beneficiaries of clean energy investment.
Neil Bradley, chief policy officer at the U.S. Chamber of Commerce, praised the bill overall as “strong” and “pro-growth,” but added: “That said, taxing energy production is never good policy, whether oil [and] gas or, in this case, renewables. Electricity demand is set to see enormous growth [and] this tax will increase prices.” He recommended the additional tax be removed.
Liz Burdock, president and CEO of Oceantic Network, noted in a release that the Senate had “promised a course-correction; instead offered a bill that is overall just as harsh as the House counterpart.”
