As of June 16, 2025, draft legislation released by the Senate Finance Committee will terminate or scale back most of the major tax incentives for clean energy contained in the Inflation Reduction Act of 2022. [1] Senate Republicans proposed to end most tax breaks for wind and solar power, electric vehicles, and other clean energy, contrary to expectations. The plan would eliminate a $7,500 consumer tax credit for electric vehicle purchases and home energy rebates, within 6 months. In addition, a tax credit for homeowners who install solar panels on rooftops would end in 180 days, and a subsidy for making hydrogen fuels would expire this year. Federal tax credits for wind and solar power will be rapidly phased out, and wind and solar companies will qualify for full tax breaks only if they start construction in the next 6 months. The House version of the bill would have ended those tax breaks immediately. Notably, the Senate bill would preserve tax credits for companies that build nuclear reactors, geothermal plants, hydropower dams or battery storage through 2033. The Senate draft, like the House bill, would also make solar leasing companies ineligible for federal tax credits.
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