Senate GOP proposes slower phaseout of clean energy tax credits

The Senate Finance Committee, led by Republicans, has proposed the “One Big Beautiful Bill” which includes significant rollbacks of clean energy tax credits established under the 2022 Inflation Reduction Act. Unlike the House bill that phases out credits rapidly and requires projects to start construction within 60 days, the Senate plan allows a slower phaseout for credits such as the Clean Electricity Production Credit (PTC) and Investment Tax Credit (ITC), with wind and solar credits fully phased out by 2028 and hydropower, nuclear, and geothermal credits available through 2035. The Senate bill also cuts residential solar, efficiency, and electric vehicle (EV) tax credits much earlier than the House bill, ending the new EV tax credit 180 days after enactment and the used EV credit 90 days after. While the Senate’s version is seen as marginally better for clean energy than the House’s harsher approach, it still represents a substantial reduction in subsidies and has drawn criticism from energy experts and the House Freedom Caucus for weakening climate-friendly incentives. Additionally, the Senate bill retains tax credit transferability but loosens restrictions related to foreign components in energy projects. These differences set the stage for tough negotiations between the Senate and House Republicans to reconcile their competing priorities.