Senate Finance Committee Chair Mike Crapo (R-Idaho) released language for the massive reconciliation bill that includes major cuts to tax subsidies for clean energy. 

A version of the bill already passed the House with deep cuts to energy credits that would cause them to sunset and include restrictions that many in the industry say would render them useless. (See House Passes Reconciliation Package that Would End Energy Tax Credits.) 

The bill would make the 2017 Trump tax cuts permanent, thus avoiding a “$4 trillion tax hike,” Crapo said June 16. 

“The legislation also achieves significant savings by slashing Green New Deal spending and targeting waste, fraud and abuse in spending programs while preserving and protecting them for the most vulnerable,” he added. 

The language the Finance Committee released June 16 would phase down key tax credits even more quickly than in the proposal the House passed. The House version would let clean energy projects get full tax credits through 2028 before being cut over the next several years and expiring entirely on Jan. 1, 2032. 

While the House bill required projects to be completed to receive credits, the Senate version keeps the current language that projects only need to start by a certain date to get them. But it slashes the production tax credit and the investment tax credit to 60% of their current total starting in 2026, then 20% for projects starting in 2027, and finally makes projects that start after Dec. 31, 2027, ineligible for them entirely. 

The language would include new prohibitions for the 45U production tax credit for nuclear plants, limiting the use of fuel from some foreign suppliers. 

The bill also would cut tax credits for plug-in electric vehicles entirely, as well as other credits aimed at making homes and commercial facilities more energy efficient. 

Edison Electric Institute interim CEO Pat Vincent-Collawn said the Senate language offers “more reasonable timelines” for phasing out energy tax credits and preserving their transferability. 

“Financial certainty and access to cost-effective financing are critical tools for electric companies as they continue to make needed investments to meet rising customer demand and to expand generation capacity,” Vincent-Collawn said in a statement. “These modifications are a step in the right direction, and we thank Chairman Crapo for his leadership in balancing business certainty with fiscal responsibility. We look forward to continuing to work with lawmakers to ensure the final package incorporates practical, pro-growth policies that support our shared goals of strengthening America’s energy security and keeping customer bills as low as possible.” 

The Union of Concerned Scientists said the Senate language, like the version that cleared the House, would slow down clean electricity deployment, undermine domestic manufacturing of batteries and electric vehicles, and make EVs more expensive and less available. 

“This proposal specifically and repeatedly sidelines the exact clean technology solutions that are ready and able to deliver benefits for people and communities all across this country,” UCS Energy Analyst Julie McNamara said in a statement. “These are the solutions that have driven enormous gains to date and are poised to deliver so much more — if only lawmakers would let them.” 

Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, called on senators to leave the credits for energy efficiency and electric vehicles in place. 

“Canceling these credits would increase monthly bills for American families and businesses,” Nadel said in a statement. “Why would we stop helping families save energy when prices are going up and up? Americans didn’t vote for higher energy bills. At a time when we’re concerned about strain on the electric grid, it’s particularly absurd to waste more electricity.”