The Senate budget bill would essentially kill wind and solar development

From the outset, President Trump’s One Big Beautiful Bill Act was always going to be bad for renewables (and U.S. energy consumers), because it rolled back clean energy tax credits that have spurred billions of dollars of investments into technology like wind, solar, batteries, and EVs. 

But recent changes to the bill’s text go even further, more aggressively phasing out the current clean energy tax incentives, and also adding a new tax on solar and wind projects. These changes will effectively kill many clean energy projects, cut millions of jobs, and raise the average American’s electricity bills in every state, experts say. 

The Senate reconciliation bill is now more than 900 pages long. Tucked into that lengthy bill were changes released the night of June 27 that would impose a new tax on solar and wind projects. That tax would essentially be a penalty on these projects tied to the amount of materials they get from China, or other “prohibited foreign entities.” That means solar and wind products would need to drastically change their supply chains—a reshoring process made more difficult without the tax incentives from the IRA. 

The bill terminates clean energy production and manufacturing tax credits for projects after 2027. It would also eliminate the EV tax credits by the end of September (under the IRA, these credits were set to start phasing out at the end of 2032), and the residential solar credits after this year (originally, in the IRA, these ended in 2034). 

The new 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,” the American Council on Renewable Energy said in a statement. 

Wind and solar are the fastest, and cheapest, new sources of energy to build, which is crucial as energy demand is expected to surge, in part because of the increase of data centers and energy-hungry AI systems. “Taking these off the table,” the ACORE statement continued, “not only increases costs and ensures supply shortages, it also ensures thousands of layoffs and factory closures.”

The Senate reconciliation bill would now “make the grid less reliable by cutting back 50% of the new capacity that was expected to be added to it within the next decade,” according to Evergreen Action, and also “stall the American-made EV industry.” 

The North American Building Trades Unions President Sean McGarvey said in a statement that if the bill now passes with these changes, it “stands to be the biggest job-killing bill in the history of this country. Simply put, it is the equivalent of terminating more than 1,000 Keystone XL pipeline projects.” The bill threatens 1.7 million construction jobs and more than 3 billion work hours, for a total of $148 billion lost in wages and benefits. 

By curtailing jobs and clean energy investment, the Senate bill would also give “yet another lifeline and competitive advantage to China in the race for global energy dominance,” McGarvey added. 

Multiple Democratic lawmakers spoke out about the changes as well. Hawaii Senator Brian Shatz wrote on X, in all caps, that, “WE ARE GOING TO HAVE ELECTRICITY SHORTAGES BECAUSE THIS BILL KILLS SOLAR.” New Mexico Senator Martin Heinrich wrote that “It’s hard to believe, but the tax language in the Senate budget bill is actually worse than the original House language.  A retroactive tax on energy projects in the pipeline. Brace for higher electricity bills.”

Elon Musk is criticizing the bill again, writing on X that “a massive strategic error is being made right now to damage solar/battery that will leave America extremely vulnerable in the future.”

Voting on the bill in the Senate begins on June 30. Trump has aimed to have the bill passed by July 4.