Senate Republicans Seek to Ease Solar and Wind Tax Credit Cutoff

9 hours ago 2
Senator Joni ErnstSenator Joni Ernst Photo by Daniel Heuer /Photographer: Daniel Heuer/Bloom

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(Bloomberg) — A group of Senate Republicans is pushing a plan to soften an aggressive planned phase out of subsidies for wind and solar projects under President Donald Trump’s tax-and-spending package.  

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The amendment being circulated by Republican Joni Ernst of Iowa would also do away with a proposed new excise tax the Senate bill would slap on wind and solar projects that use components from China and other “foreign entities of concern.” 

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The proposal, which could receive a vote as soon as late Monday or early Tuesday, was being hailed by industry interests, who warned that without changes Trump’s “Big, Beautiful Bill” would deliver fatal blows to some wind farms and solar arrays already under construction, while snuffing out proposed projects necessary to meet surging US electricity demand. 

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“This amendment would provide a more workable transition for energy businesses while protecting energy sector jobs and projects currently in the pipeline,” said Lisa Jacobson, president of the Business Council for Sustainable Energy. 

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The amendment, which is co-sponsored by Chuck Grassley of Iowa and Lisa Murkowski of Alaska, broadly seeks to ease requirements governing which wind and solar projects can qualify for a clean electricity tax credit created under the 2022 Inflation Reduction Act. 

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Under the current version of the Senate bill, qualifying projects would have to be placed in service by the end of 2027 to qualify. Renewable power developers warn that hinges on factors well outside their control — including long wait times to connect projects to the nation’s power grids. 

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The Solar Energy Industries Association told senators in a letter Monday that the placed-in-service approach “undermines multi-billion-dollar investments and jeopardizes dozens of gigawatts of energy projects currently in the pipeline.”

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The Ernst amendment circulating Monday would shift to a more lenient timetable tied to the start of construction. Under that measure, projects would qualify for at least some of the credit as long as they begin construction in 2026 or 2027. 

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The measure appeared likely to win other Republican votes — potentially enough, with the support of the chamber’s Democrats — to secure adoption. Senator Thom Tillis, a Republican from North Carolina, also said he backed the plan.

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Iowa is a major wind producer and North Carolina has benefited from investments spurred by the IRA’s energy tax credits.

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If adopted, the change could upset what House Republican leaders have called a fragile coalition for passage in that chamber, where fiscal conservatives insisted on the more stringent requirements to qualify for the tax credits.  

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The separate excise tax for projects using equipment made in China would affect a number of renewable ventures. Chinese companies dominate construction of key components in solar panels and other clean energy technology, including solar cells and wafers. 

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Supporters of the excise tax say it’s important to wean US energy infrastructure off China. 

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The proposed tax “directly forces developers to source domestically produced solar equipment instead of Chinese product — enhancing our national security, supporting American manufacturing jobs and preventing adversaries from embedding spy-ware in our critical energy infrastructure,” said Jon Toomey, president of the Coalition for a Prosperous America. 

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—With assistance from Ken Tran and Erik Wasson.

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