is a senior science reporter covering energy and the environment with more than a decade of experience. She is also the host of Hell or High Water: When Disaster Hits Home , a podcast from Vox Media and Audible Originals.
Senate Republicans today passed a sweeping spending bill that narrowly avoided punitive tax measures on renewable energy but still threatens to stall its growth in the US.
After wrangling over hundreds of amendments for more than 24 hours in a so-called “vote-a-rama” on Monday and Tuesday, Senate Republicans advanced the bill with provisions that make it near impossible for many renewable energy projects to qualify for tax incentives Congress passed in 2022. But a last-minute amendment eliminated a proposal to impose a new excise tax on solar and wind projects, which industry groups and advocates warned could have done even more to cut jobs and raise electricity bills.
The fate of renewable energy projects — many of them in Republican districts — was a major sticking point
“There’s this push and pull between [GOP] members who … see the importance of doing things for their constituents, and a kind of ideological argument at a national level” that vilifies wind and solar energy, says Nat Keohane, president of the Center for Climate and Energy Solutions (C2ES).
Clean energy and climate advocates are still outraged by the bill’s slashing of incentives for renewables — on top of other language that gets rid of energy efficiency programs, guts protections for public lands, and winds down tax credits for electric vehicles.
The bill nearly passed with a measure that could have devastated renewable energy companies. On Friday night, a surprise proposal was added for an excise tax on solar and wind projects. The tax would have essentially penalized developers who failed to meet requirements barring “material assistance from prohibited foreign entities.” In other words, they’d have needed to prove that their supply chains weren’t tainted by any materials or business ties to foreign governments the Trump administration deemed unacceptable — including China, which dominates supply chains for solar components and wind turbines. “It’s almost spiteful,” Keohane says of the plan.
The proposed tax was dropped this morning. But some advocates worry that introducing and removing the excise tax was a red herring, drawing attention away from other measures that could still derail renewable energy projects.
Most prominently, the bill sets aggressive deadlines for any wind and solar developers hoping to take advantage of Biden-era tax credits for carbon-pollution-free energy. Biden committed the US to slashing greenhouse gas pollution roughly in half from peak levels by the end of the decade under the Paris Agreement. To reach that goal, Congress passed the Inflation Reduction Act (IRA), which expanded tax credits for pollution-cutting technologies including renewables, in 2022.
Today, the Senate passed language that stipulates that solar and wind projects would need to either start construction within a year of the bill’s enactment or be placed in service by 2027 in order to qualify for IRA tax credits. Many projects would struggle to meet that truncated timeline given the long lead times needed to secure financing and permits and connect to the power grid.
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