The text that passed the House on a 215-214, party-line vote early Thursday is even less favorable to clean energy interests than a previous draft that industry groups widely panned, UtilityDive reported.
The bill terminates the 48E investment and 45Y production tax credits for non-nuclear clean energy projects placed in service after 2028, with no phaseout period. Projects must begin construction within 60 days of the bill’s enactment — likely later this year — to be eligible for the credits.
The version the House Ways and Means Committee released on May 12 stepped down the value of the 48E and 45Y credits over three years and did not include the imminent construction-start requirement, giving developers and asset owners more leeway to wait out lengthy waits for grid interconnection.
Combined with even tighter restrictions on foreign involvement in U.S. clean energy projects, the truncated eligibility window leaves a “near impossible” pathway for non-nuclear developers to qualify for the 48E and 45Y credits, Jeffries said. The foreign involvement restrictions apply to “foreign entities of concern” like China, which controls much of the upstream supply chain for batteries, electric motors and other clean energy equipment.
The bill also eliminates the Inflation Reduction Act’s tax credit transferability framework for most clean energy projects. Experts say transferability, which previously enjoyed bipartisan support, expands project financing options for small and midsize energy developers.
Following an outcry from industry groups like the Nuclear Energy Institute, the House bill extends production and investment tax credit eligibility for advanced nuclear projects and power uprates of existing reactors that begin construction by 2028. It also extends a separate production credit for existing nuclear power plants through 2031 and preserves transferability for nuclear projects.
The practical effect of the nuclear carveout is unclear. Projects like the planned reactor restarts at Constellation Energy’s 835-MW Crane Clean Energy Center and Holtec International’s 800-MW Palisades plant would likely qualify, but many greenfield projects are not expected to begin reactor construction until later this decade. For example, the Tennessee Valley Authority earlier this week began a more than two-year federal permitting process for a small modular reactor that it expects to begin building in late 2028.
The biggest surprise in the latest version of the bill is what Jeffries called the “intentional targeting” of the residential solar sector. The previous version of the bill quickly terminated the 25D tax credit for customer-owned residential solar installations while preserving it for installations leased by companies like Sunrun, the country’s biggest third-party solar and energy storage leasing enterprise.
“This short-lived advantage to [residential solar leases] was seemingly corrected, with new text now ‘leveling the playing field’ by targeting all future residential solar originations, whether leased or owned,” Jeffries said.
Shares of Sunrun fell about 40% in early Thursday trading; stocks of other solar companies also tumbled.
Clean energy advocates and trade groups said the bill would devastate an industry driving the United States’ manufacturing boom while increasing customers’ utility bills and threatening the stability of the electric grid.
“This unworkable legislation is willfully ignorant of the fact that deploying solar and storage is the only way the U.S. power grid can meet the demand of American consumers, businesses and innovation,” the Solar Energy Industries Association said in a statement.
The head of Advanced Energy United, another clean energy trade group, called the legislation a “meat cleaver” in a statement noting that solar, wind, storage and other “advanced energy” added 50 GW to the U.S. grid in 2024 and produced about $400 billion in domestic revenues.
The House bill “abruptly dismantles bipartisan, long-standing tax policy that has catalyzed billions in private investment for affordable, reliable energy while sparking a rebirth of manufacturing across America,” AEU President and CEO Heather O’Neill said. “If enacted as written, this bill will weaken our power system and send shockwaves throughout the U.S. economy by raising electricity prices, killing tens of thousands of jobs and ceding energy dominance to China.”
In a report released before the House bill passed, the American Clean Energy Association identified more than 800 manufacturing facilities involved in the U.S. clean energy supply chain. Seventy-three percent of those are located in “Republican states,” it said.
Tyler Durden
Thu, 05/22/2025 – 12:54
