Senate bill accelerates the end of wind and solar tax credits

Renewable energy advocates said that the latest version of the Senate’s massive budget bill, which the Senate will vote on as early as Saturday, deals a death blow to the use tax credits established since 2005 to encourage more wind and solar power. It would also impose a brand new tax for the first-time on these projects.

The Senate's leadership introduced a new version of the bill overnight that effectively eliminates the solar and wind incentives immediately. Earlier in the week, there were hopes that the Senate might rework its language regarding the future use of Inflation Reduction Act Tax Credits to make them more useful and extend their use.

It imposes new taxes on wind and solar project completed after December 31, 2027, if they can't prove that they didn't use any Chinese components. Meanwhile, it offers a tax break to coal production. The bill also speeds up the phase-out for clean energy manufacturing tax incentives that attracted billions of dollars in investment throughout the US and especially in Republican state. Clean energy and environmental groups have criticized the changes made at the last minute to the bill. They claim that the changes will increase household energy costs, and rob the US of needed and fast electricity during a time when the US is experiencing a surge in power demand due to the construction of data centers with high power consumption to support AI development.

Elon Musk, former Trump advisor and head DOGE, blasted Saturday's bill on his social-media platform X. He warned that it would "destroy millions of American jobs" and cause "strategic damage."

"It's utterly crazy and destructive." He said that the bill "gives handouts to the industries of yesterday while damaging the industries of tomorrow". The Energy Security Organization SAFE stated in a press release that the bill as it is written would give an unfair advantage to China. China dominates the clean-energy and electric vehicle industries, and is racing ahead of the US on AI development.

Avery Ash of SAFE, the head of government affairs, said that "where the original Senate version led to energy stagnation, it is now a complete energy surrender, which guarantees Chinese dominance in critical minerals, industrial supply chain, and AI developments."

Green energy opponents applauded the bill because it ended support for renewable energies. Trump said on Friday that the credits should be ended and renewable energy no longer needs support.

Tom Pyle, the president of the American Energy Alliance, said that if the IRA supporters are right and the repeal of these subsidies would 'kill' the industry, perhaps it should not exist. Reporting by Valerie Volcovici, Editing by Chizu nomiyama

(source: Reuters)