Released July 01, 2025 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--With the U.S. Senate approaching a vote on the Big, Beautiful Bill Act, it was clear that the renewable energy industry would take a big hit. But the severity of that hit remained unclear Monday evening as proposals emerged that could soften the blow.
The bill was expected to go before a vote late Monday or early Tuesday.
The Senate's version of the bill called for a quicker expiration of tax credits for wind and solar power as well as a new excise tax on these projects, which experts say would drastically hinder the U.S. renewable sector, costing jobs and stopping developing projects. However, some Republican senators proposed amendments easing the bill's stance toward the credits.
Friday's version of the Senate's bill called for an end to the production tax credits for renewable energy projects after December 31, 2027, earlier than House's version of the bill and sooner than a previous version of the Senate's bill had mandated. The move comes as power demand is rising throughout the U.S. and wind and especially solar power represent the largest amount of new power being built in the U.S.
Not only would the measure stop the tax credits sooner, but also provided a new excise tax on wind and solar projects that begin construction after June 16 this year unless the project's developers can prove that only a small percentage of the project's components come from prohibited countries such as China. Several U.S. renewable energy projects use components from China as relying solely on U.S. components would represent a shortfall in necessary equipment.
Solar, wind and battery energy storage by far represented the largest additions to U.S. power generation last year, with natural gas and nuclear contributing minimal amounts. Reaction to the proposed swipes at renewables has been mixed. Analysts from the Rhodium Group said that the new tax would push up the cost of wind and solar by 10% to 20%. "Combined with the likely onerous administrative reporting burden this provision puts in place, these cost increases will lead to even lower wind and solar installations. The impacts of this tax would also flow through to consumers in the form of higher electricity rates," Rhodium said in email directed to news media.
Sean McGarvey, president of the North America's Building Trades Unions, which represents more than 3 million construction workers, also slammed the proposed bill, saying in a statement, "If enacted, this stands to be the biggest job-killing bill in the history of this country. Simply put, it is the equivalent of terminating more than 1,000 Keystone XL pipeline projects," referring to a controversial oil pipeline canceled under the Biden administration.
Not all of the opinions were directed against the bill, which also calls for increased oil and gas drilling. American Petroleum Institute President Mike Sommers wrote in a statement Sunday, "Demand for affordable, reliable energy is increasing across all aspects of the economy, and the growth in AI [artificial intelligence] will require around-the-clock power driven largely by natural gas. This bill seizes the opportunity to secure our energy future by unlocking investment, opening lease sales and expanding access to oil and natural gas."
Tom Pyle, president of the American Energy Alliance, was quoted by Reuters saying, "If, as supporters of the [Inflation Reduction Act] are complaining, repealing these subsidies will 'kill' their industry, then maybe it shouldn't exist in the first place."
While the U.S. is expected to experience a wave of new natural gas-fired generation to begin development under the current administration, these projects may be slow in coming. Manufacturers of gas-fired turbines for the U.S. market are gearing up for a supply crunch as power plant developers place their orders for proposed gas-fired projects well in advance. One of the leading U.S. turbine developers, GE Vernova (Cambridge, Massachusetts), is accepting pre-orders from developers such as Duke Energy Corporation (Charlotte, North Carolina) and plans to boost turbine production from 48 turbines per year to between 70 and 80 by 2026.
John Ketchum, chief executive of NextEra Energy Incorporated (Juno Beach, Florida), which owns and develops both gas-fired and renewable energy projects, sees room for both fossil fuels and renewable energy, with renewable energy gradually giving way to more fossil-fueled power. In an opinion piece published last week in Fortune magazine, Ketchum wrote, "Because new nuclear power plants are not available until the mid-2030s and traditional power plants take years to build and turbines are sold out through the early 2030s, a full-stop, immediate elimination of credits or a change to start of construction would effectively shut off America's supply of new power plants through the end of the decade. Until then, America's only option is to build wind, solar, and battery storage--which can serve as a bridge while we expand traditional power plant supply chains and workforces."
However, the credit phase-out could potentially split members of the GOP; as of Monday afternoon, three Republican senators had proposed amendments to the tax bill that would allow the credits to stay in place longer and eliminate the proposed excise tax.
Regardless of the outcome for the renewable energy tax credits, something bigger may be on the line in regard to overall U.S. industry. Drastically changing tax schemes and industry incentives with each change of presidential administration threatens to stop U.S. investment in its tracks as project developers seek to mitigate risk and limit uncertainty.
The Washington Post reported that French energy company ENGIE (La Defense, France) said it has cut its planned investment in the U.S. by half since January. "There's a lot of questions from our board, from our management--is this the right country to continue to invest in with policy uncertainty? We operate in 30 countries. We can direct that capital to other countries," the Post quoted David Carroll, chief renewables officer for ENGIE North America, as saying. "No business can plan for investments in these circumstances," he said.
The same article quoted Will Etheridge, chief executive of Southern Energy Management (Raleigh, North Carolina), which installs solar panels. Ethridge and colleagues bought the operation from the previous owners last year, as the business' fundamentals seemed bright. Now he says the company potentially may need to lay off 50-60 workers. "You cannot have this kind of whiplash," he said. "If every four years tax policy changes drastically like this, we are not going to be able to build anything great in this country."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
The bill was expected to go before a vote late Monday or early Tuesday.
The Senate's version of the bill called for a quicker expiration of tax credits for wind and solar power as well as a new excise tax on these projects, which experts say would drastically hinder the U.S. renewable sector, costing jobs and stopping developing projects. However, some Republican senators proposed amendments easing the bill's stance toward the credits.
Friday's version of the Senate's bill called for an end to the production tax credits for renewable energy projects after December 31, 2027, earlier than House's version of the bill and sooner than a previous version of the Senate's bill had mandated. The move comes as power demand is rising throughout the U.S. and wind and especially solar power represent the largest amount of new power being built in the U.S.
Not only would the measure stop the tax credits sooner, but also provided a new excise tax on wind and solar projects that begin construction after June 16 this year unless the project's developers can prove that only a small percentage of the project's components come from prohibited countries such as China. Several U.S. renewable energy projects use components from China as relying solely on U.S. components would represent a shortfall in necessary equipment.
Solar, wind and battery energy storage by far represented the largest additions to U.S. power generation last year, with natural gas and nuclear contributing minimal amounts. Reaction to the proposed swipes at renewables has been mixed. Analysts from the Rhodium Group said that the new tax would push up the cost of wind and solar by 10% to 20%. "Combined with the likely onerous administrative reporting burden this provision puts in place, these cost increases will lead to even lower wind and solar installations. The impacts of this tax would also flow through to consumers in the form of higher electricity rates," Rhodium said in email directed to news media.
Sean McGarvey, president of the North America's Building Trades Unions, which represents more than 3 million construction workers, also slammed the proposed bill, saying in a statement, "If enacted, this stands to be the biggest job-killing bill in the history of this country. Simply put, it is the equivalent of terminating more than 1,000 Keystone XL pipeline projects," referring to a controversial oil pipeline canceled under the Biden administration.
Not all of the opinions were directed against the bill, which also calls for increased oil and gas drilling. American Petroleum Institute President Mike Sommers wrote in a statement Sunday, "Demand for affordable, reliable energy is increasing across all aspects of the economy, and the growth in AI [artificial intelligence] will require around-the-clock power driven largely by natural gas. This bill seizes the opportunity to secure our energy future by unlocking investment, opening lease sales and expanding access to oil and natural gas."
Tom Pyle, president of the American Energy Alliance, was quoted by Reuters saying, "If, as supporters of the [Inflation Reduction Act] are complaining, repealing these subsidies will 'kill' their industry, then maybe it shouldn't exist in the first place."
While the U.S. is expected to experience a wave of new natural gas-fired generation to begin development under the current administration, these projects may be slow in coming. Manufacturers of gas-fired turbines for the U.S. market are gearing up for a supply crunch as power plant developers place their orders for proposed gas-fired projects well in advance. One of the leading U.S. turbine developers, GE Vernova (Cambridge, Massachusetts), is accepting pre-orders from developers such as Duke Energy Corporation (Charlotte, North Carolina) and plans to boost turbine production from 48 turbines per year to between 70 and 80 by 2026.
John Ketchum, chief executive of NextEra Energy Incorporated (Juno Beach, Florida), which owns and develops both gas-fired and renewable energy projects, sees room for both fossil fuels and renewable energy, with renewable energy gradually giving way to more fossil-fueled power. In an opinion piece published last week in Fortune magazine, Ketchum wrote, "Because new nuclear power plants are not available until the mid-2030s and traditional power plants take years to build and turbines are sold out through the early 2030s, a full-stop, immediate elimination of credits or a change to start of construction would effectively shut off America's supply of new power plants through the end of the decade. Until then, America's only option is to build wind, solar, and battery storage--which can serve as a bridge while we expand traditional power plant supply chains and workforces."
However, the credit phase-out could potentially split members of the GOP; as of Monday afternoon, three Republican senators had proposed amendments to the tax bill that would allow the credits to stay in place longer and eliminate the proposed excise tax.
Regardless of the outcome for the renewable energy tax credits, something bigger may be on the line in regard to overall U.S. industry. Drastically changing tax schemes and industry incentives with each change of presidential administration threatens to stop U.S. investment in its tracks as project developers seek to mitigate risk and limit uncertainty.
The Washington Post reported that French energy company ENGIE (La Defense, France) said it has cut its planned investment in the U.S. by half since January. "There's a lot of questions from our board, from our management--is this the right country to continue to invest in with policy uncertainty? We operate in 30 countries. We can direct that capital to other countries," the Post quoted David Carroll, chief renewables officer for ENGIE North America, as saying. "No business can plan for investments in these circumstances," he said.
The same article quoted Will Etheridge, chief executive of Southern Energy Management (Raleigh, North Carolina), which installs solar panels. Ethridge and colleagues bought the operation from the previous owners last year, as the business' fundamentals seemed bright. Now he says the company potentially may need to lay off 50-60 workers. "You cannot have this kind of whiplash," he said. "If every four years tax policy changes drastically like this, we are not going to be able to build anything great in this country."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
