Dalton, Georgia, is home to QCells, one of the largest solar facilities in the world, thanks to investments from the Inflation Reduction Act. It is also located in Rep. Marjorie Taylor Greene’s district. Dustin Chambers/Getty Images
The Senate version of President Donald Trump’s “One Big Beautiful Bill,” unveiled to the public at Midnight on Friday, went even further than the House version in its hostility toward the nation’s burgeoning renewable energy sector. The House version merely seeks to end the Inflation Reduction Act (IRA) subsidies for wind and solar development enacted under President Joe Biden. Now, Republican senators want to levy punishing new taxes on wind and solar projects.
“I hate to say it, but it would kill [America’s] renewable energy market,” says Kenneth Gillingham, a dean and professor of environmental and energy economics at Yale University.
“It would kill it!” concurs Bob Keefe, executive director of E2, a national organization of business leaders advocating for smarter climate policies and the author of a recent book titled Clean Economy Now.
If solar and wind projects aren’t finished by 2027, per the Senate version, the developers will face a tax that would add an additional 10 to 20 percent to their costs, per Rhodium Group‘s analysis. The American Clean Power Association estimates that this will cost companies $4 billion to $7 billion by 2036 and raise consumer electricity costs by 8 percent to 1o percent.
Red-state voters “will be losing out on jobs that they would have been getting otherwise, but they might not know that.”
Ending the IRA subsidies would cause a big industry slowdown, Gillingham says, but the proposed taxes are nails in its coffin. The Senate bill, he says, shifts the economy away from wind and solar—the fastest-growing energy sources here and worldwide—and back toward fossil fuels. “It very clearly shows the policy priorities of the Republicans who are drafting this bill. They are entirely pro-fossil fuels,” says Gillingham.
Jesse D. Jenkins, an energy systems engineering professor at Princeton University, calls the bill a “truly bizarre, a self-defeating measure,” especially from a “party that claims to stand for American energy dominance.” Its provisions, in addition to hindering the development of clean power, Jenkins says, will lead to more pollution and higher energy bills for homes and businesses.
Indeed, according to an analysis by Michael Thomas, founder and CEO of the clean energy data platform Cleanview, the bill will increase electricity costs substantially for customers in every state—in some cases by more than 20 percent.
That’s particularly notable now that demand for electricity has begun to increase after a decade of flatlining. The rise in demand, Keefe told me, referring to Trump’s invention of a crisis to rationalize his “drill, baby drill” energy policies, could well turn into an actual “energy emergency.” And the only way to fix that, he says, “is through solar, wind, and batteries.”
The Republicans’ bill utilizes what journalist Jael Holzman calls the party’s’ “anti-China trap.” Namely, wind and solar companies won’t have to pay the excise tax if they extract their supply chains from China—as if that’s remotely possible. “It would take several years to get to a point where a supply chain would not face this tax, if possible at all,” Gillingham told me. “In the meantime, the manufacturing would be destroyed.”
Keefe calls is a “worthwhile goal” to move manufacturing to the United States from China, the global renewable energy leader by leaps and bounds, but he says this bill would do the opposite. Fueled by the IRA funding, the US renewables industry was just starting to gain a stronger footing. “All of those projects now are at risk because we’re killing the tax policies that made them possible,” Keefe says.
The economic losses would almost certainly hit red, rural districts the hardest, because 78 percent of the IRA tax credits for clean energy have gone to these areas. And all the new jobs being created in states like Georgia were just the start. “The greater loss is actually on the jobs that would have happened within the next year or two,” Gillinhgam says. “They will be losing out on jobs that they would have been getting otherwise, but they might not know that.”
Keefe emphasizes that the losses won’t stop with IRA-funded projects. “Business investments were prompted because of the market signal that the previous administration set when it said it was shifting to a cleaner economy,” he says. Even if the bill fails, $14 billion and 10,000 clean jobs already have been lost just thanks to uncertainty created by the administration’s energy and trade rhetoric.
A handful of Republican Senators are balking at the new renewables taxes—three are backing an amendment to ease the proposed levies in ways that could jeopardize the larger bill.
In any case, the crux of the matter goes well beyond economic and political considerations, Keefe says, citing the bill’s downstream effects: “We’re going to be going backwards on protecting the air that you and I breathe, in the water that we drink, and and the planet that we live on.”
