There is no deus ex machina coming for clean energy, after all.
The United States Senate Committee on Finance could have stood in the way of the House of Representatives’ steamrolling of cleantech incentives in its version of the hotly contested budget bill, but ultimately, lobbying from industry advocates and legislators on both sides of the aisle amounted to white noise and wishful thinking.
The draft text of the Senate committee’s take on the One Big Beautiful Bill Act (OBBA), released Monday, isn’t all that different from the House’s version. It’s a mixed bag at best, sparing only some technologies from premature tax credit wind-downs, namely hydropower, nuclear, geothermal, and battery energy storage. Wind and solar generation, often subjects of ridicule and outright disdain from the Trump administration, get the short end of the stick, but their fate isn’t quite as dire as it was under the House’s proposal.
Here are the winners and losers of the Finance Committee’s first stab at the OBBBA.
The Winners
Tax credit transferability: Back from the dead! The Senate committee opted to resurrect transferability, which allows companies to move tax credits to third parties. Entire industries have sprung up around this provision, so it would be a welcome revision to the version of the OBBBA that passed the House, particularly for hyperscalers.
Energy storage: Battery energy storage is making a major impact nationwide, and it seems like someone let the committee in on that little secret, as they elected to extend the full value of energy storage credits through 2033.
Texas and California, in particular, have made their grids much more resilient in just a few years by tacking on a bunch of batteries. In Q3 2024, for example, Texas tripled installations compared to the previous quarter, adding nearly 1.7 gigawatts (GW). Only California brought gigawatt hours online, 6 GWh, thanks to the state’s focus on longer-duration storage.
Clean baseload power: The Senate committee suggests extending the full value of technology-neutral production and investment tax credits for hydropower, geothermal, and nuclear projects that start construction by 2033. From there, the credits will wind down incrementally until disappearing at the end of 2036.
Utility-scale solar: Not a win, per se, but not an outright loss, either. The Senate draft says solar PV and wind facilities would be eligible for the full ITC or PTC, as applicable, if construction begins in 2025. The House had shortened that runway to a couple of months after the enactment of the bill, but if the Senate has its way, at least developers have a firm date sixth months in the future to put a shovel in the ground, enabling the larger and more agile players in the space to “stockpile” projects that qualify for incentives before the value of such facilities begins to decrease in 2026. See below.
The Losers
Residential solar: Like in the House bill, residential solar leases are excluded from tapping into 48E credits, another setback for a sector struggling to reinvent itself and find profitability amidst changing legislation and unpredictable tariffs. The Senate calls for phase-outs of the ITC and PTC starting on January 1, 2026, when solar and wind projects beginning construction would only be eligible for 60% of those tax credits. In 2027, eligibility dips to 20% before being eliminated entirely on New Year’s Day, 2028.
Offshore and onshore wind: President Trump has brought the U.S. offshore wind industry to a grinding halt (don’t tell that to the folks building Empire Wind!) and has promised no terrestrial wind projects would be getting passed under his watch. The phasedown of applicable ITCs and PTCs is the same as outlined in the residential solar section above.
Electric vehicles: The Senate suggests eliminating the $7,500 consumer tax credit for purchases of electric vehicles (EVs) within six months. Same goes for home energy rebates for stuff like electric heat pumps and induction stoves.
Reaction to the Bill
Some still have questions about the Senate’s approach to the OBBBA, primarily surrounding the Foreign Entity of Concern (FEOC) provisions. The Senate draft begins to limit the use of Chinese components and technology in 2026 and becomes stricter over time. It adds some detail to clarify what qualifies and what doesn’t, particularly the amount of debt held in aggregate by foreign entities, but it still seems awfully ambiguous.
Senator Mike Crapo (R-ID), Chairman of the Senate Finance Committee, boasted that the draft language “powers the economy” by permanently extending tax cuts for individuals and businesses. “The legislation also achieves significant savings by slashing Green New Deal spending and targeting waste, fraud, and abuse in spending programs while preserving and protecting them for the most vulnerable,” Crapo added.
“It looks a lot like the House bill, really,” Senator Kevin Cramer (R-ND) said of the Finance text. “They did good work on ending the longtime credits and technologies and we pretty much stuck to that, so I think it’ll be fine.”
Although the Senate Finance Committee seemed to throw cleantech a bit of a bone in its version of the OBBBA, its efforts didn’t go nearly far enough, according to many industry advocates.
“The proposed draft undermines long-term American energy and economic security and presents a tremendous step backward for companies onshoring the entire solar value chain,” observed Mike Carr, executive director of the Solar Energy Manufacturers for America (SEMA) Coalition. “We appreciate the Senate Finance Committee’s stated desire to support domestic solar manufacturing by limiting Chinese firms’ access to 45X credits and making the domestic content bonus more effective. Unfortunately, those improvements are made functionally irrelevant by the abrupt phase out of the Investment Tax Credit beginning the end of 2025.”
“This bill will end any hope of onshoring domestic manufacturing,” Carr continued. “It would eliminate the market advantage for non-Chinese domestic products that would level the playing field for American manufacturers, which is critical for justifying investments in new factories. Instead, it will upset existing contracts for products from domestic factories opening up in the next few months and jeopardize billions in factory investments and thousands of jobs, conceding an important market to heavily subsidized Chinese products.”
“As it stands, this bill is a massive gift to Chinese manufacturers, will likely expose our grid to security vulnerabilities, and serves a blow to hard-working Americans. We hope to have the opportunity to work with good-faith partners in the Senate in the coming days to make the reality of this bill match the pro-manufacturing rhetoric of the Senators and the Trump administration,” he added.
Utilities in the Midwestern United States are tackling tough challenges posed by increasingly extreme weather, aging infrastructure, and an ongoing race to integrate renewable energy while maintaining grid reliability. State decarbonization laws add complexity to the process of bringing power generation online, and as utilities transition from fossil fuels to cleaner alternatives, they are simultaneously managing supply chain issues, labor shortages, and new cybersecurity risks. Service providers must modernize their infrastructure to satisfy increasing demand while keeping pricing affordable, which is a tall task for any-sized utility.
A new regional DISTRIBUTECH event, DTECH Midwest, will provide a unique opportunity to dive into the specific issues faced by the power industry in Midwest and includes tailored content for municipal and cooperative utilities.
Registration is now open! Join us from July 14-16, 2025, in Minneapolis, MN. Learn more about what you can expect here.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), had equally disdainful things to say about the reconciliation bill text released Monday.
“Despite modest improvements on several provisions, this legislation does not go far enough to remove the threat to one of the greatest economic success stories in American history. As drafted by the Senate Finance Committee, this proposal would pull the plug on homegrown solar energy and decimate the American manufacturing renaissance,” Hopper stated. “This bill makes it harder to do business in America for U.S. manufacturers and small businesses and will undoubtedly lead us to an energy-strained economy with higher electric bills over the next five years.”
“Let’s be clear about who will pay the price if this bill becomes law: Americans’ electric bills will spike, American workers will be laid off, American factories will shutter, American communities will suffer blackouts, and American lawmakers will forfeit the AI race to China,” Hopper added, joining Carr’s call for amending the proposal.
Heather O’Neill, president and CEO of the national business association Advanced Energy United, agrees that the Senate bill is marginally better for clean energy than the House bill, but still expects power bills to go up and thousands of jobs to be lost.
“The fate of hundreds of advanced energy projects and facilities, representing thousands of jobs and billions in private investment, are at the mercy of the U.S. Senate. The cumulative impact of the initial Senate Finance language will be to imperil those projects, chill investment, destroy jobs, raise electricity costs, and undermine American energy abundance,” O’Neill warned. “Businesses can’t invest without consistent tax policy. By axing a range of long-standing tax policies, this proposal undercuts business certainty while robbing consumers of the opportunity to lower their energy costs.”
American Clean Power CEO Jason Grumet’s position is similar to that of his peers.
“The Senate Finance Committee released proposed language that would increase household electricity bills and threaten hundreds of thousands of jobs across the country. While the proposal eliminates poison pills from the House legislation, abrupt changes to the clean energy tax credits unnecessarily penalize companies that are making good-faith investments under current law,” Grumet said.
“The most immediate impact will be felt by consumers and companies facing increased energy bills. Absent reasonable timelines for businesses to adjust to increasing taxes, good-paying jobs, technology innovation, and AI data centers will be driven overseas. As the legislation moves through the process, we look forward to working with the Senate on reasonable amendments that protect American jobs, strengthen our economy, and support U.S. energy dominance.”
