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Senate Bill Proposes Major Overhaul of Clean Energy Credits

Clean Energy

Business Honor
17 June, 2025

Senate draft bill phases out solar, wind credits by 2028, extends incentives for other energies.

A draft bill circulated by a US. Senate committee pushes major clean energy tax credit overhauls, calling for phasing out of solar and wind power incentives through 2028. The move is part of an overall Republican budget package and a departure from Biden-era 2022 Inflation Reduction Act policies, which would have phased out those credits through 2032. The Senate bill instead would cut the worth of solar and wind credits by 60% in 2026, phasing them out completely through 2028.

Conversely, the Senate bill continues tax credits for hydropower, nuclear, and geothermal energy through 2036, which was acclaimed by industry organizations such as the National Hydropower Association. Although the longer time frame was appreciated, the bill does not cover tax credit renewals for the upgrade of current hydropower plants, a top priority of players in the industry.

Clean energy supporters, such as Abigail Ross Hopper of the Solar Energy Industries Association, were worried that the bill is not doing enough to safeguard solar energy incentives. Stock prices of solar companies fell as a result of the proposed reforms, indicating industry unease.

The bill further contains clauses to limit the use of foreign-made equipment from rival countries such as China in clean energy ventures, a restriction that may affect projects depending on Chinese components. Some limitations are eased under the Senate version, though, and will permit certain public companies to encounter fewer obstacles.

Electric utility companies have applauded the Senate's amendments, which allow clean energy projects to have more time to take tax credits and retain the third-party transfer option of tax credits, a provision that was already cut from the House version of the bill. With clean energy on the move, this proposal represents a turning point in the back-and-forth argument about how to reconcile the future of renewable energy and energy security.