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A CLEAN ENERGY BOOM WAS JUST STARTING. NOW, A REPUBLICAN BILL AIMS TO
END IT.  
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Brad Plumer and Harry Stevens
May 13, 2025
The New York Times
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_ The party’s signature tax plan would kill most Biden-era
incentives, but there’s a sticking point: G.O.P. districts have the
most to lose. _

A wind turbine in Carbon County, Wyoming., Benjamin Rasmussen for The
New York Times

 

Sprawling wind farms in Wyoming. A huge solar factory expansion in
Georgia. Lithium mines in Nevada. Vacuums that suck carbon from the
air in Louisiana.

Over the past three years, companies have made plans to invest more
than $843 billion across the United States in projects aimed at
reducing planet-warming emissions, driven by lucrative tax credits for
clean energy provided by the 2022 Inflation Reduction Act.

But only about $321 billion of that money has actually been spent,
with many projects still on the drawing board, according to data made
public on Tuesday [[link removed]] by the
Clean Investment Monitor, a joint project of the Rhodium Group and the
Massachusetts Institute of Technology.

Now, much of the rest, about $522 billion, will depend on action
playing out on Capitol Hill. Starting on Tuesday, Republicans in
Congress will begin a contentious debate over proposals to roll back
tax credits for low-carbon energy as they search for ways to pay for a
roughly $4 trillion tax cut package favored by President Trump.

A draft bill issued on Monday
[[link removed]] by
Republicans on the House Ways and Means Committee would effectively
end most of the Inflation Reduction Act’s tax incentives.

A tax credit for low-carbon electricity sources like wind, solar,
nuclear or geothermal power would be phased out over the next few
years. Rebates for consumers to buy electric vehicles would mostly
disappear by the end of 2025. Tax breaks for domestic factories that
make batteries or solar panels would end by 2031 and would contain new
restrictions that could make them extremely difficult to access.
Incentives for producing hydrogen fuels would end this year.

While shrinking those tax credits could help Republicans save hundreds
of billions of dollars, it could also cause companies to abandon plans
for new nuclear reactors or battery factories. More than
three-quarters of pending investments were planned in Republican-held
congressional districts.

“It’s jobs, it’s tax revenue into local communities,” said Ben
King, an associate director at the Rhodium Group, a research firm
that tracks investment data
[[link removed]] with M.I.T.’s Center for
Energy and Environmental Policy Research. “It does represent a
meaningful economic change in some of these places.”

The prospect of repeal has set off a furious lobbying battle in
Washington, with energy companies pleading with lawmakers to preserve
the tax breaks.

At least three dozen Republicans have asked their colleagues
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keep at least some tax credits to protect jobs in their districts and
reduce electricity prices. But a nearly equal number of conservative
House members are pushing publicly to kill the climate law altogether
[[link removed]].

One Republican supporter is Representative Juan Ciscomani of Arizona,
whose district includes an electric vehicle factory and several solar
projects under construction. “When I looked initially at the energy
tax credits and how they were benefiting Arizona, a lot of those
projects were underway, the jobs had been created, the ball was more
than rolling at that point,” Mr. Ciscomani, who was elected in 2022,
said. “So it made sense for me to stand up for that.”

If the tax credits are completely rescinded, it would sharply reduce
future demand for electric vehicles, batteries, solar panels and wind
turbines, according to projections by the Rhodium Group. The effect
would be compounded if the Trump administration moved forward as
planned with undoing Biden-era tailpipe pollution limits for cars and
trucks, which would have pushed automakers to sell more electric
vehicles.

The uncertainty around the tax credits, as well as confusion over Mr.
Trump’s tariffs, has led many low-carbon energy companies to put
their investment plans on hold.

In the Midwest, Heliene, a solar manufacturer, has paused plans to
build a $350 million factory that would produce cells for solar
panels, which today mostly come from China. Martin Pochtaruk,
Heliene’s chief executive, said it was too risky to finance the
plant without clarity on whether Congress would maintain tax credits
for domestic energy manufacturing.

“Right now, we see a lot of folks just waiting,” said Jason
Grumet, chief executive of the American Clean Power Association, a
renewable industry trade group. “People are not canceling things,
but they’re also not breaking ground.”

“There is a remarkable tension right now, between probably the best
fundamentals for investment in the energy sector that we’ve seen in
a generation and the greatest amount of uncertainty that we’ve seen
in the generation,” Mr. Grumet said. “That is a collision that all
manufacturing now is trying to navigate.”

The Fate of Low-Carbon Electricity

The biggest tax breaks in the Inflation Reduction Act were for
companies that build power plants that generate electricity without
emitting any planet-warming greenhouse gases. Those credits were set
to remain in place for many years to come, until emissions from the
U.S. electricity sector fell 75 percent from 2022 levels.

So far, power companies have mainly taken advantage of these credits
to propose new solar, wind and battery plants in places like Texas,
California, Wyoming and Arizona, since those technologies are ready
today. But the credit was designed to also spur a wave of
innovative nuclear reactors
[[link removed]], advanced
geothermal plants
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plants
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hydroelectric dams and novel types of batteries over the next decade.

The credits have already allowed developers to install solar panels on
sites as varied as a carport in New Mexico and a shuttered coal plant
in Illinois, said Russ Bates, chief executive of NXTGEN Clean Energy
Solutions, a low-carbon energy developer.

Yet those credits may wind down much faster than many companies
expected. Under the House bill issued on Monday, the full
clean-electricity credits would only apply to new power plants that
are “in service” by 2028, which would exclude a large array of
wind, solar, nuclear and geothermal plants that are under development
but won’t be completed by then. The credits would then phase down
and disappear after 2031.

In South Carolina, Gov. Henry McMaster, a Republican, recently warned
[[link removed]] that,
without the tax credits, efforts to expand nuclear power in his state
“are dead.”

What Congress decides could reshape the nation’s power grids. If the
credits are repealed entirely or severely restricted, one study found
[[link removed]],
wind and solar installations would likely fall by half over the next
decade, while electric utilities would burn more fossil fuels like
coal and gas instead. That could lead to higher electricity prices,
since renewables are often the quickest and easiest source of power
for utilities to build. Emissions would also rise.

Risks for Domestic Supply Chains

Perhaps the most visible effect of the Inflation Reduction Act so far
has been a surge of domestic manufacturing. Four years ago, the United
States had hardly any capacity to build solar panels, wind turbines or
lithium-ion batteries. Most of that happened in China and elsewhere.

That’s quickly changing.

The law gave hefty tax breaks to wind and solar developers if they
used components made in the United States. It also doled out
additional tax credits for domestic clean-energy factories. In
addition, billions of dollars in funding from a 2021 bipartisan
infrastructure law allowed the Biden administration
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support domestic supply chains, including mining for key elements like
lithium.

That has had a major effect in places like Dalton, Ga., once known as
the nation’s carpet manufacturing capital. In 2023, Hanwha Qcells, a
Korean solar company, announced it would invest $2.5 billion to expand
its factory in Dalton, creating the largest solar panel manufacturing
facility in the Western Hemisphere.

“It’s a newer technology for us, but it’s one we’re excited to
be making right here,” said Jason Mock, president of the Greater
Dalton Chamber of Commerce.

If all the solar factories currently planned in the United States get
built, the country would have the capacity to produce three times as
many solar panel modules as were installed in 2024, according to an
analysis
[[link removed]] by
the Rhodium Group and M.I.T. Yet the solar industry is still reliant
on countries like China for many underlying components, such as the
polysilicon wafers.

It’s a similar story for batteries: The number of U.S. factories
that are currently planned would build enough lithium-ion modules and
cells to satisfy future demand for electric vehicles, although
progress has been much slower in building up domestic supplies of raw
ingredients like graphite and lithium.

It’s not clear if those supply chains will survive. In the House
draft bill, Republicans proposed sharp new restrictions on the use of
materials from China, which could make it difficult for many U.S.
factories to qualify.

The bill would also end by next year a $7,500 consumer tax credit for
electric cars that is available for buyers of cars largely produced in
the United States. That would reduce demand for electric vehicles,
which would in turn affect a broad swath of battery manufacturing and
demand for critical minerals like lithium.

 

[A blue solar panel on a conveyor belt. ]

A solar panel on the assembly line at the Qcells solar panel factory
in Dalton, Ga.Credit...Christian Monterrosa for The New York Times

[In the foreground, a white car. In the background, several rows of
factory employees in blue shirts and white caps. ]

A Hyundai plant that builds electric vehicles near Savannah, Ga., in
March.Credit...Mike Stewart/Associated Press

At least 24 factories have been set up in the United States to produce
electric cars that qualify for the credit, including a Ford plant
making plug-in hybrids in Louisville, Ky., and a General Motors
battery plant in Ohio, according to a study from Atlas Public Policy
[[link removed]], a research firm.

Near Savannah, Ga., Hyundai invested in a $7.5 billion factory to
build some of its most popular electric vehicle models, which qualify
for the consumer credit. Local politicians, who spent years persuading
Hyundai to come to the site, are concerned about possible changes to
law.

“It’s difficult for a company to invest somewhere and then
conditions change,” said Bert Brantley, chief executive of the
Savannah Area Chamber of Commerce. “So our take is that some
consistency is helpful for companies as they make large
investments.”

Still, Mr. Brantley said he hoped that Georgia could continue to be a
leader in electric vehicle production regardless of what happens to
the tax credits. “This is a long-term play, we hope to be at it for
a long time,” he said.

Other Energy Technologies in Limbo

Over the past three years, the federal government has also been
supporting a broad array of emerging energy technologies that are less
mature, including low-carbon hydrogen fuels that could power trucks,
new processes to make cement and steel without emissions, as well as
technologies to pull carbon dioxide out of the air.

Many of these projects could potentially qualify for tax breaks in the
Inflation Reduction Act. Others have been supported by billions of
dollars in grants and loans from the Department of Energy.

In Western Minnesota, DG Fuels plans a $5 billion plant to produce
aviation fuel from agricultural waste. In Indiana, Heidelberg
Materials, a cement maker, wants to capture the carbon dioxide it
emits and bury it underground. In Louisiana, a company is planning to
make a low-carbon ammonia that could be used for fertilizer.

New Orleans, which has become a major hub for exporting natural gas,
has seen a boom in new industries like carbon capture and hydrogen
that could help cut emissions in the future. “We’re becoming very
diversified,” said Michael Hecht, president of Greater New Orleans,
Inc., the economic development agency for southeast Louisiana.

But as part of the tax bill, House Republicans on the Energy and
Commerce committee have proposed ending a tax credit for hydrogen
fuels by the end of this year. At the same time, the Trump
administration has proposed deep cuts and encouraged widespread
layoffs at the Energy Department, which historically has played a
leading role in nurturing new technologies.

The debate in Congress over the future of federal energy spending
could affect the direction of entire industries.

“Other countries are rapidly scaling up investments in green steel,
green cement, low-carbon manufacturing,” said Lindsey Baxter
Griffith, chief executive of Clean Tomorrow, a nonprofit organization
focused on technological innovation in energy. “Without a clear
strategy here, we risk falling behind.”

_Brad Plumer [[link removed]] is a Times
reporter who covers technology and policy efforts to address global
warming._

_Harry Stevens [[link removed]] is a Times
reporter and graphics editor covering climate change, energy and the
natural world._

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