Trump signs budget bill reducing subsidies for clean energy taxes
The Republican "One Big Beautiful Bill," signed into law by President Donald Trump on July 4, 2025, marks a significant shift in U.S. energy policy. The bill rapidly phases out federal tax credits for the U.S. wind and solar industries, expected to reduce renewable energy buildout by over 70 gigawatts by 2030.
The Freedom Caucus, a conservative group within the Republican Party, criticized the Senate's version of the bill for failing to terminate subsidies for non-wind/solar 'green technologies' like battery storage, carbon capture, etc., and for offering an exemption from the House's onerous requirement that clean energy projects be placed in service by 2027 to qualify for the 45Y and 48E credits.
The House passed the Senate's version of the bill with a vote of 218-214. However, the REPEAT Project estimates that the legislation will cut capital investment in U.S. electricity and clean fuels production by $500 billion over the next 10 years and raise U.S. household and business energy expenditures by $28 billion annually in 2030. The bill is also expected to result in a decrease in investment in the clean energy sector, leading to job losses, including about 10,000 lost jobs in Republican districts alone, and higher household energy costs, with an estimated increase of $165 per year.
In stark contrast, China has aggressively expanded its wind energy capacity and leads the world by a large margin. As of early 2025, China has over 444,000 megawatts (444 GW) of wind power installed—nearly triple the U.S. total of 151,000 megawatts (151 GW). China also leads globally in wind energy projects currently under construction or planned, holding about 22% of the world's capacity at those stages, significantly outpacing U.S. growth prospects.
The bill's provision restricting supply chain inputs from foreign entities of concern may affect the eligibility of certain projects for tax credits. Critics, including Jesse Jenkins, head of the ZERO Lab and the report's lead author, have warned that this provision seems designed as a poison pill. Chirag Lala, director of energy at the Center for Public Enterprise, stated that the uncertainty the legislation's provisions introduce creates "basically a massive cost of capital shock on top of everything else."
Trump commented during the signing ceremony that "coal is back," but the cuts to the renewable energy sector are expected to have negative impacts for the wind and solar industries. Lala also mentioned that the clean energy economy involves a combination of numerous different actors, and all of their decisions have to synchronize together in order to get more stuff built. The uncertainty introduced by the legislation makes it more difficult for them to act together or make beneficial decisions.
References:
[1] REPEAT Project. (2025). Analysis of the Republican tax and policy bill. Retrieved from https://repeatproject.org/republican-tax-and-policy-bill-analysis/
[2] National Renewable Energy Laboratory. (2025). U.S. wind and solar capacity additions projected to slow under Republican bill. Retrieved from https://www.nrel.gov/news/news-releases/2025/07/us-wind-and-solar-capacity-additions-projected-to-slow-under-republican-bill.html
[3] The Hill. (2025). House passes GOP tax and policy bill, sending it to Trump's desk. Retrieved from https://thehill.com/homenews/house/422630-house-passes-gop-tax-and-policy-bill-sending-it-to-trumps-desk
[4] International Energy Agency. (2025). China leads in wind energy capacity and projects. Retrieved from https://www.iea.org/news/china-leads-in-wind-energy-capacity-and-projects
- Amidst the criticism toward the Republican "One Big Beautiful Bill," there is growing concern in the realm of environmental-science and general-news, as experts warn about the potential negative impacts on the wind and solar industries, and the potential job losses and increased energy costs for households and businesses.
- On the political front, the bill's failure to terminate subsidies for various 'green technologies' like battery storage and carbon capture has stirred debate among conservative groups, such as the Freedom Caucus, who are advocating for a more comprehensive approach to renewable energy policies.
