Clean Energy Projects Hinge on Senate Megabill Showdown
Democrats and clean energy advocates are ratcheting up pressure on a handful of Republican senators to salvage billions of dollars in projects, ahead of an expected vote next week on President Trump’s mega bill that targets critical subsidies for elimination.
How fast to wind down clean-energy credits is one of several contentious pieces of the tax-and-spending legislation, along with reductions in Medicaid spending, that Republican party leaders need to iron out quickly to hit a July 4 deadline for delivering the bill to Trump’s desk. While some Republicans are trying to protect funding for projects in their states, other GOP lawmakers see the subsidies as a ripe target for savings, as the party moves to extend and expand Trump’s tax cuts.
Republican Sen. Thom Tillis, who backs the subsidies and is up for re-election next year in closely divided North Carolina, said the Senate language released Monday “moved substantially” in the right direction from an earlier House version, and that he is still in negotiations with colleagues.
Senate Majority Leader John Thune (R., S.D.) said Wednesday that the energy credits language in the bill is “not totally settled yet.” Any changes that pass the Senate would then have to be approved by the House, where Republicans have taken a dimmer view of the subsidies.
The tug of war over renewable energy projects and manufacturing has centered in recent weeks on senators like Tillis, who hails from a state with billions of dollars of investment at stake in the fate of the tax credits.
In one TV ad, funded by Protect Our Jobs, a clean-energy advocacy group, the owner of a solar installation company says he employs hundreds of North Carolinians and complains about “this dumb idea in Congress to cut investments in clean energy.” The ad urges viewers to call Tillis. On Thursday, the group planned to launch two new 15-second ads in North Carolina targeting Tillis.
A Protect Our Jobs spokesman said the group is organized as a 501(c) 4, a type of nonprofit that can engage in some politics and doesn’t have to disclose its donors. The group has spent more than $7 million on its ad campaign since April, according to data from advertising tracking firm AdImpact, targeting a range of House and Senate Republicans, including Sen. Susan Collins of Maine who faces re-election next year.
Other senators targeted by the ads include Lisa Murkowski of Alaska and Jerry Moran of Kansas. They joined Tillis in signing a letter to party leaders earlier this year warning against “full-scale repeal” of current credits for clean energy projects.
Solar and wind production and investment tax credits would wind down through 2026 and 2027 in the Senate proposal, instead of around 2032 in the current law. Battery storage avoided an early sunset. The House version included difficult-to-meet provisions that would have meant an immediate rollback of credits. The Senate extended the time that nuclear, hydropower and geothermal projects would be eligible for credits.
North Carolina’s clean-energy boom
The bulk of the renewable energy construction and manufacturing launched as a result of President Joe Biden’s Inflation Reduction Act happened largely in Republican states, where it is often easier and faster to build something like a new factory or solar farm.
North Carolina has been one of the biggest beneficiaries. More than $21 billion in manufacturing and generation projects have been announced in North Carolina since the IRA was signed in August 2022, according to data from the nonprofit environmental business group E2 and the Clean Economy Tracker.
When the tax credits were enacted, congressional scorekeepers expected them to cost $271 billion over a decade. But without the GOP bill to end them, the total would likely be several hundred billion dollars above that.
Should the credits be sharply curtailed—as now looks likely—Democrats and aligned groups plan to pummel vulnerable Republicans on the issue as they try to chip away at the GOP’ 53-47 majority in the midterm elections next year.
The bill could help Democrats oust Tillis, said Lauren French, a spokeswoman for Senate Majority PAC, a super PAC run by allies of Senate Minority Leader Chuck Schumer (D., N.Y.). “That’s what happens when you put kowtowing to Donald Trump before serving your state,” French said.
Tillis spokesman Daniel Keylin shot back that Democrats should be thanking the Republicans who have been working on a gentler phaseout.