Energy & Environment

Energy & Environment

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Senate releases plans for green tax credit rollback

The Senate’s version of President Trump's “big, beautiful bill” includes changes to green energy tax credits that are more flexible than those passed by the House — but it would still a significant rollback.

© Michael Sohn, Associated Press file

This flexibility is likely to please moderates in both chambers who felt that the House version was too stringent. However, it could be teeing up a collision with the conservative House Freedom Caucus, whose board said it will “not accept” Senate changes that “water down” its major cutbacks to the climate-friendly credits.

The Senate text appears to eliminate the most stringent provision in the House bill, deleting a measure that would have required climate-friendly energy sources to start construction within 60 days of the bill’s enactment to qualify for the credits at all.

Instead, things such as solar panels and wind farms would need to begin construction this year to receive the full credit amount.

Projects that begin construction in 2026 would get 60 percent of the credit, while projects that begin construction in 2027 would receive 20 percent. Projects constructed in 2028 or later would not be eligible for the credit.

This, too, appears to be more flexible than the House text, which required projects to not just start construction but actually be producing electricity by the end of 2028 to qualify for the credit.

Nevertheless, the Senate provisions are still a major rollback of the tax credits passed by Democrats in their 2022 Inflation Reduction Act. Under that law, the credits would have lasted until either 2032 or when U.S. emissions from the electric sector are 25 percent lower than 2022 levels, whichever came later.

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