Senators working through the weekend on the One Big Beautiful Bill Act — Republicans’ budget reconciliation bill — delivered renewable energy supporters an unexpected and unpleasant surprise in the form of proposed taxes that likely would stymie completion of projects already in the works. 

While the electricity industry expected cuts to energy tax credits, changes to the bill released over the June 28-29 weekend just before it went to the floor added a new tax on energy projects that rely on foreign components.  

“With no warning, the Senate has proposed new language that would increase taxes on domestic energy production,” American Clean Power Association CEO Jason Grumet said in a statement. “In what can only be described as ‘midnight dumping,’ the Senate has proposed a punitive tax hike targeting the fastest-growing sectors of our energy industry. It is astounding that the Senate would intentionally raise prices on consumers rather than encouraging economic growth and addressing the affordability crisis facing American households.” 

The new taxes would strand hundreds of billions of dollars in investment, threaten energy security and undermine domestic manufacturing, Grumet added. 

While changes to energy tax credits were an inevitable part of the legislation, American Council on Renewable Energy CEO Ray Long said, the industry had tried to come to reasonable accommodation that would allow current projects to be completed. 

“To be clear, the Senate language effectively takes 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,” Long said in a statement. “Along with battery storage and natural gas, wind and solar are the only sources of electricity that can be built in time to meet our increasing thirst for more electricity. Taking these off the table not only increases costs and ensures supply shortages, it also ensures thousands of layoffs and factory closures.” 

The U.S. Chamber of Commerce generally supports the bill, but even its chief policy officer, Neil Bradley, posted on X that “taxing energy production is never good policy” and urged Congress to remove the tax from the final bill to avoid higher power prices. 

An amendment from Sens. Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa) and Lisa Murkowski (R-Alaska) would moderate some of the language around energy tax credits while still phasing them out for any project that starts construction after 2027. 

“This amendment would provide a more workable transition for energy businesses while protecting energy sector jobs and projects currently in the pipeline,” Lisa Jacobson, president of the Business Council for Sustainable Energy, said in a statement. “Clear, predictable and long-term tax policy is essential for market confidence that will get projects deployed quickly and urgently as America faces skyrocketing energy demand. Companies plan with these tax incentives in mind and rely upon them for capital allocation, planning and project commitments — all of which will be jeopardized by abrupt cut offs or additional restrictions.”