Senate Bill Threatens Clean Energy Future, Raising Concerns for AI Industry's Power Needs

The Senate Just Put Clean Energy for AI in the Crosshairs

After more than a day of continuous debate, the US Senate passed its version of the budget megabill Tuesday afternoon -- with potentially disastrous implications for the future of renewable energy in the country. Among a barrage of bad news for climate initiatives, including a new tax credit for coal and the sunsetting of electric vehicle tax credits, the bill forces an aggressive cutoff for tax credits for wind and solar. The bill ends credits for projects placed in service -- a term meaning, essentially, that a project is ready to provide power to the grid -- after 2027, putting hundreds of planned projects around the country in jeopardy. "This is a bill to punish renewables," says Costa Samaras, a professor of civil and environmental engineering at Carnegie Mellon University. "There is a real need to add clean energy supply to the grid -- electrifying our cars, electrifying our homes, electrifying our buildings, electrifying our factories, and the demands from AI are all going to require new clean energy. What this bill does is make it harder and more expensive." Incredibly, the original version of the bill presented Monday evening was even worse news for renewables. That text contained a new tax on wind and solar which would have taxed businesses that source material from certain foreign countries, including China -- a charge that would have, in essence, kneecapped both industries. The new text also gives a little bit of leeway to projects that start construction within the next year, allowing them to keep tax credits even if they are not placed in service by the 2027 deadline. President Donald Trump, who has a long-held animus for windmills, campaigned on ending the Inflation Reduction Act, and the original House bill made good on that promise. But the more extreme last-minute additions made over the weekend in the Senate text alarmed energy analysts, environmentalists, labor unions, Silicon Valley technocrats, and even some Senate Republicans. The addition of the excise tax, in particular, seemed to have been a total surprise. As NBC reported Monday, several GOP Senators said they had no idea who added in the provision. Alex Epstein, an energy "philosopher" who has pushed a narrative around fossil fuels being essential for "human flourishing" and who has been an influential voice for Republicans in crafting the end of the IRA tax credits, claimed on X this weekend that he did not support the excise tax. Elon Musk, whose businesses have benefited from a variety of climate and clean energy-related tax credits, posted a barrage of tweets Sunday and Monday disparaging the renewable energy provisions of the bill. "The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country!" he wrote. "Utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future." According to Politico, Trump reportedly pushed Senate leadership last week to craft a text that was more aggressive in phasing out tax credits for renewables than the version of the bill passed in the House. "I HATE "GREEN TAX CREDITS" IN THE GREAT, BIG, BEAUTIFUL BILL," Trump posted on TruthSocial in late June, launching into a paragraph-long, error-ridden rant on renewable energy.

The GOP's big spending bill could kill renewable energy projects

Justine Calma is a senior science reporter covering energy and the environment with more than a decade of experience. She is also the host of Hell or High Water: When Disaster Hits Home, a podcast from Vox Media and Audible Originals. Senate Republicans today passed a sweeping spending bill that narrowly avoided punitive tax measures on renewable energy but still threatens to stall its growth in the US. After wrangling over hundreds of amendments for more than 24 hours in a so-called "vote-a-rama" on Monday and Tuesday, Senate Republicans advanced the bill with provisions that make it near impossible for many renewable energy projects to qualify for tax incentives Congress passed in 2022. But a last-minute amendment eliminated a proposal to impose a new excise tax on solar and wind projects, which industry groups and advocates warned could have done even more to cut jobs and raise electricity bills. The fate of renewable energy projects -- many of them in Republican districts -- was a major sticking point that nearly stopped GOP lawmakers from reaching an agreement on the "One Big Beautiful Bill Act" that's a key pillar of Donald Trump's agenda. As passed, the Senate bill could have wide-ranging effects on many Americans' lives, including cuts to Medicaid and food assistance programs, a spectrum auction that could slow down Wi-Fi speeds, massive funding increases for Trump's mass deportation campaign, and much more. (A 10-year moratorium on state AI laws was dropped at the last minute.) It's now headed back to the House to vote on any changes that have been made to the text since it passed its own version of the bill in May. "There's this push and pull between [GOP] members who ... see the importance of doing things for their constituents, and a kind of ideological argument at a national level" that vilifies wind and solar energy, says Nat Keohane, president of the Center for Climate and Energy Solutions (C2ES). Clean energy and climate advocates are still outraged by the bill's slashing of incentives for renewables -- on top of other language that gets rid of energy efficiency programs, guts protections for public lands, and winds down tax credits for electric vehicles. The bill nearly passed with a measure that could have devastated renewable energy companies. On Friday night, a surprise proposal was added for an excise tax on solar and wind projects. The tax would have essentially penalized developers who failed to meet requirements barring "material assistance from prohibited foreign entities." In other words, they'd have needed to prove that their supply chains weren't tainted by any materials or business ties to foreign governments the Trump administration deemed unacceptable -- including China, which dominates supply chains for solar components and wind turbines. "It's almost spiteful," Keohane says of the plan. The proposed tax was dropped this morning. But some advocates worry that introducing and removing the excise tax was a red herring, drawing attention away from other measures that could still derail renewable energy projects. Most prominently, the bill sets aggressive deadlines for any wind and solar developers hoping to take advantage of Biden-era tax credits for carbon-pollution-free energy. Biden committed the US to slashing greenhouse gas pollution roughly in half from peak levels by the end of the decade under the Paris Agreement. To reach that goal, Congress passed the Inflation Reduction Act (IRA), which expanded tax credits for pollution-cutting technologies including renewables, in 2022. Today, the Senate passed language that stipulates that solar and wind projects would need to either start construction within a year of the bill's enactment or be placed in service by 2027 in order to qualify for IRA tax credits. Many projects would struggle to meet that truncated timeline given the long lead times needed to secure financing and permits and connect to the power grid. Republican districts actually stand to benefit the most from IRA incentives for new solar and wind farms and factories. The tax bill's future seemed to hinge largely on getting Sen. Lisa Murkowski (R-AK) on board with these limits, as well as cuts to Medicaid and food assistance programs. Murkowski co-sponsored the amendment to toss out the excise tax on renewables and eventually voted in favor of the bill -- giving Republicans the 51-50 vote they needed to succeed (with Vice President JD Vance casting the tiebreaking vote). The fact that solar and wind -- favorite punching bags of Trump and other right-wing culture warriors -- were targeted rather than other carbon-pollution-free sources of electricity, like nuclear reactors, is telling. Trump, who campaigned with support from the fossil fuel industry, has been particularly vitriolic against wind and solar energy. Misleading claims about renewable energy projects harming wildlife and inaccurate claims about wind and solar leading to power outages have been flagged by researchers as leading talking points in disinformation campaigns about climate change. Secretary of Energy Chris Wright repeated similar tropes in an op-ed he published in the New York Post last week in support of the bill. Before Trump tapped him for his current role, Wright was CEO of Liberty Energy, a major oil and gas service provider that claims that roughly 10 percent of total US primary energy production comes from wells it fracks. Wright also used to sit on the board of a nuclear energy startup with OpenAI CEO Sam Altman. Trump has signed executive orders aimed at speeding the development of new nuclear technologies. Tech giants, including Google, Microsoft, Meta, and Amazon, are also banking on nuclear energy to power data centers that are expanding to support the computing needs of AI. The growth of AI, domestic manufacturing, and the electric vehicle industry has led to electricity demand jumping for the first time in more than a decade in the US. That issue -- on top of the health and climate risks posed by fossil fuel pollution -- is a big reason why advocates say this is the worst time to kill new renewable energy projects. It could take years or decades to commercialize new nuclear technologies, but wind turbines and solar panels are already mature technologies. "At a time when we need new energy more than ever, Republicans are punishing the plentiful wind and solar power that can be quickly added to the grid," Manish Bapna, president of the nonprofit Natural Resources Defense Council, said in a press release. Solar and wind together reached a milestone last year, when they produced more electricity than coal for the first time in the US. Gas still makes up the biggest chunk of the US electricity mix, however, at around 40 percent of power generation. "The intentional effort to undermine the fastest-growing sources of electric power will lead to increased energy bills, decreased grid reliability, and the loss of hundreds of thousands of jobs," American Clean Power Association CEO Jason Grumet said in a press release. The Senate vote on this bill also reignited Trump's feud with Tesla CEO Elon Musk. Elon Musk posted on X over the weekend that "a massive strategic error is being made right now to damage solar/battery that will leave America extremely vulnerable in the future" as he renewed calls to create a new political party.

Clean-energy backers blast US budget bill as a setback

WASHINGTON, July 3 (Reuters) - Advocates of clean energy on Thursday decried the final passage of President Donald Trump's tax cut bill by the House of Representatives as a reversal of course on the energy transition, while fossil-fuel interests rejoiced. Trump's fellow Republicans in the House passed the bill 218-214 and it now heads to the president's desk. Trump is expected to sign it on Friday. The legislation sharply cuts access to a 30% tax credit for solar and wind power projects that had been set to run until 2032 and which developers had relied on. Research firm Energy Innovation projected that the bill would result in a fall of 300 gigawatts of U.S. electricity capacity, as demand soars for the first time in two decades, driven by growth in data centers and artificial intelligence. Meanwhile, demand for power from data centers is estimated at upward of 100 GW, according to nonprofit group American Clean Power. The bill's passage "is a dramatic swing in federal policy, disrupting the good-faith investments of American companies that are powering our economy and creating hundreds of thousands of jobs," said Jason Grumet, ACP's president. Jefferies global investment bank said in a research note to clients that the phaseout of the wind and solar subsidies will lead to a "medium-term rush" to claim credits, which could speed the roll-out of projects for a couple of years. After that period, investors will need to reassess such projects without them. It said nuclear and geothermal power, energy sources that the Trump administration favors for dependable electricity generation, received better access to credits in the legislation. Battery storage projects will also retain the full tax credit through 2033 and phase out fully by 2036. The "longer runway" for those baseload resources to use the tax credits won praise from the Data Center Coalition, whose members include Amazon (AMZN.O), opens new tab and Microsoft (MSFT.O), opens new tab. Mike Sommers, the president and CEO of the American Petroleum Institute, the top oil and gas lobbying organization, said Congress had advanced Trump's "energy dominance agenda" of maximizing oil and gas output. Production of oil and gas had already hit a record during the administration of former President Joe Biden. "We applaud Congress for unleashing our nation's oil and natural gas resources, and we look forward to President Trump signing this bill into law," Sommers said in a release. COAL GETS A BREAK Some tax credits favored by the oil industry, like those for hydrogen and carbon capture, were preserved in the bill. The bill also mandates sales of oil and gas drilling rights in federal lands and in waters off Alaska and the Gulf of Mexico, which Trump has renamed the Gulf of America. It allows coal used in steel making a new production tax break of 2.5% of costs that could be worth hundreds of millions of dollars for the industry. It also reduced royalty rates that coal companies have to pay when mining on public lands. Rich Nolan, the president and CEO of the National Mining Association lobbying group, said the bill supports "today's mining industry which stands ready to create additional jobs and revenues for our economy." Daniel Francis, a director with Generate Capital, said the focus for wind and solar industries will shift to states and communities. "Ultimately the impact of the bill will be to move decisions down the federal chain from Congress to states, counties and cities," he said. "Because economies run on power, because voters care about their power bills, and there is no alternative." Reporting by Timothy Gardner and Valerie Volcovici in Washington; Additional reporting by Lisa Baertlein in Los Angeles; Editing by Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Carbon MarketsSustainable MarketsGrid & InfrastructureLNGCoal Timothy Gardner Thomson Reuters Timothy reports on energy and environment policy and is based in Washington, D.C. His coverage ranges from the latest in nuclear power, to environment regulations, to U.S. sanctions and geopolitics. He has been a member of three teams in the past two years that have won Reuters best journalism of the year awards. As a cyclist he is happiest outside. Valerie Volcovici Thomson Reuters Valerie Volcovici covers U.S. climate and energy policy from Washington, DC. She is focused on climate and environmental regulations at federal agencies and in Congress and how the energy transition is transforming the United States. Other areas of coverage include her award-winning reporting plastic pollution and the ins and outs of global climate diplomacy and United Nations climate negotiations.

US Senate bill's clean energy cuts draw backlash from labor, business

WASHINGTON, June 30 (Reuters) - The U.S. Senate's proposed cuts to clean energy subsidies in its version of President Donald Trump's tax and spending bill have drawn searing criticism from business and labor groups since they were unveiled over the weekend, with some arguing the moves will raise power prices and kill jobs. The pushback, which includes a swipe from Trump ally and Tesla CEO Elon Musk, comes as senators started voting on a potentially long list of amendments to the bill on Monday morning, giving renewable energy advocates on both sides of the political spectrum a last window to push for changes. "Taxing energy production is never good policy, whether oil & gas or, in this case, renewables," said Neil Bradley, policy director of the U.S. Chamber of Commerce, in a post on X over the weekend. "Electricity demand is set to see enormous growth & this tax will increase prices. It should be removed." "This would be incredibly destructive to America!" Musk posted on X, saying the cuts could endanger the development of energy-hungry artificial intelligence technology, among other things. Trump has said he intends to maximize U.S. energy production, with a focus on fossil fuels, in part to ensure the power industry can supply the AI industry's growth. But he has also promised to wipe out subsidies for renewables. The Senate bill would roll back incentives for wind, solar, batteries and other clean energy technologies created by President Joe Biden's 2022 Inflation Reduction Act, and add a new tax on these projects if they cannot prove their products are made without Chinese parts. Those provisions were harsher on the credits than the previous Senate version and even the House version. Sean McGarvey, president of the North America's Building Trades Unions (NABTU), which represents over 3 million construction workers, blasted the bill's impact on jobs. "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," he said in a statement, referring to an oil pipeline project blocked by Biden's administration. Republican Senator Thom Tillis of North Carolina, one of two Republicans who voted against advancing the bill, also blasted the bill on the Senate floor overnight and warned that it will cause power shortages by hamstringing renewable energy and battery storage. Tillis drew ire from Trump for voting against the motion to advance the bill and has since said he does not plan to run for re-election. "What you have done is create a blip in power service, because there isn't going to be a gas-fired generator anytime soon," he said on the floor. Tillis had worked as a consultant covering the utility industry and said the bill ignores the reality of the soaring demand for power by data centers. Brian Schatz, a Democratic Senator from Hawaii, also railed against the bill's impact. "This bill will increase prices. The 500-GW less energy in the next decade is pretty much exactly the amount we will need to meet rising demand," he said. "You don't have to love clean energy or be an environmentalist to understand that this is a basic question of supply and demand," he said. Reporting by Valerie Volcovici Editing by Marguerita Choy Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Climate & EnergyGrid & InfrastructureGasSolarClimate Change Valerie Volcovici Thomson Reuters Valerie Volcovici covers U.S. climate and energy policy from Washington, DC. She is focused on climate and environmental regulations at federal agencies and in Congress and how the energy transition is transforming the United States. Other areas of coverage include her award-winning reporting plastic pollution and the ins and outs of global climate diplomacy and United Nations climate negotiations.

Despite last-minute changes, US Senate bill deals big blow to renewable energy

WASHINGTON, July 1 (Reuters) - The U.S. Senate's massive budget bill that passed on Tuesday will make it harder to develop wind and solar energy projects, despite the removal of some contentious provisions, industry advocates and lawmakers said. The Senate dropped a proposed excise tax on solar and wind energy projects that don't meet strict standards after last-minute negotiations with key Republican senators seeking better terms for renewables. Iowa Senator Joni Ernst, fellow Iowa Senator Chuck Grassley and Alaska Senator Lisa Murkowski, whose votes were crucial to the bill's passage, had introduced an amendment calling for removal of that tax, which caught lawmakers by surprise after it made it into the last draft text. Many Republican states host large renewable energy industries. The Senate also changed language about which solar and wind projects can use the 2022 Inflation Reduction Act's tax credits. In the Senate's final version, projects will be able to use the lucrative credits if they begin construction before 2026. A previous version was based on when the projects enter service. But overall, the Senate bill will make it too challenging to move forward with many new wind and solar energy projects, likely depriving the United States of added electricity capacity at a time of soaring energy demand, critics said. That could mean higher consumer bills and lost jobs around the country at project sites dependent on the credits. "Senate Republicans just voted to trigger the largest spike in utility bills in American history," said Lena Moffitt, executive director at climate advocacy group Evergreen Action. Research firm C2ES estimated that the United States will lose 2.3 million jobs as a result of the bill. Another research firm, Energy Innovation, projected that the bill would result in a fall of 300 GW of electricity capacity at a time of soaring demand due to data center and AI growth. Business and labor groups earlier this week had blasted the bill's phaseout of tax credits. The Senate bill effectively phases out renewable energy tax credits after 2026 if projects haven't started construction. Otherwise, wind and solar projects whose construction starts after that must be placed in service by the end of 2027. Community solar project developers warned that the bill would stop in their tracks thousands of projects already under development. "This bill will strand thousands of energy projects under development, jeopardize billions of dollars in private investment, and kill hundreds of thousands of good-paying American jobs -- from electricians to contractors to local landowners and farmers who rely on these projects for stability," said Jeff Cramer, president of the Coalition for Community Solar Access. Meanwhile, the bill included a new tax credit for coal used in steel making that had been typically available only for critical minerals used in weapons making and green energy. Opponents said that could lead to hundreds of millions of dollars in subsidies for an industry that has suffered in recent years. Heather Reams, president of conservative clean energy group Citizens for Responsible Energy Solutions, praised the bill for preserving tax credits to boost hydrogen, nuclear energy, geothermal and hydropower, as well as carbon capture technologies. But she urged House lawmakers to try to make the wind and solar tax credits more useable. "As this bill moves back to the House, we encourage members to maintain their support for these critical tax provisions, which bolster domestic energy generation to secure true American energy dominance," she said. Reporting by Valerie Volcovici; Additional reporting by Timothy Gardner; Editing by Cynthia Osterman and Mark Porter Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Climate & EnergyGrid & InfrastructureSolarWindClean Energy Valerie Volcovici Thomson Reuters Valerie Volcovici covers U.S. climate and energy policy from Washington, DC. She is focused on climate and environmental regulations at federal agencies and in Congress and how the energy transition is transforming the United States. Other areas of coverage include her award-winning reporting plastic pollution and the ins and outs of global climate diplomacy and United Nations climate negotiations.

Senate GOP tax bill could crush wind and solar power, advocates say

WASHINGTON (AP) -- Clean energy advocates were already bracing for a Republican-led bill that would phase out tax credits for wind, solar and other renewable energy as President Donald Trump and GOP lawmakers moved to dismantle the 2022 climate law passed by Democrats under former President Joe Biden. But a proposal that emerged over the weekend was even more drastic than they thought. It was more aggressive in ending incentives for clean energy than a previous Senate version and would even impose new taxes on some wind and solar projects while boosting production of coal used in steelmaking. The Senate was moving Monday to approve Trump's big bill of tax breaks and spending cuts even as Democrats lined up to challenge it. The GOP plan is "a death sentence for America's wind and solar industries" that will lead to a spike in Americans' utility bills and jeopardize hundreds of renewable energy projects slated to boost the nation's electric grid, said Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee. "Their plan started out as a phase-down of the tax credits I wrote for wind and solar" in the 2022 climate law, Wyden said. "But now they're proposing an outright massacre with punishing new taxes on these industries that happen to be the cheapest and easiest ways to get new energy on the grid." Republicans said the tax-cut bill represents historic savings for taxpayers and supports production of traditional fossil-fuel energy sources such as oil, natural gas and coal, as well as nuclear power, increasing reliability. "To achieve this record level of savings, we are slashing Biden's Green New Deal spending and promoting America-First energy,'' Idaho Sen. Mike Crapo, chairman of the Senate Finance panel and a lead architect of the bill, said in a statement. "We stop penalizing fossil fuels in favor of unreliable and expensive green energy, and instead support consistent energy sources, making energy affordable again." Crapo said. The Senate bill eliminates "hundreds of billions of dollars of the Green New Deal subsidies, including ending wasteful credits like the EV tax credit," he added, referring to a Democratic measure included the climate law to provide incentives for electric vehicles that don't emit planet-warming greenhouse gases. Some moderate senators, such as Sen. John Curtis, R-Utah, were seeking to strip the new tax on wind and solar and make other other changes, but it was unclear whether those proposals would advance. If approved unchanged, the measure will kill investment in renewable energy and jeopardize hundreds of gigawatts of new power supply that would otherwise help the U.S. meet rapidly rising electricity demand as data centers, artificial intelligence and other growing uses strain the power grid, environmental advocates said. Advocates of green energy worry of a daunting future The GOP plan would "lock in higher household energy bills, kill American jobs ... and torch our future,'' said Mattea Mrkusic, who leads energy policy for the environmental group Evergreen Action. The bill would cut off climate law credits for projects that aren't "placed in service" -- that is, plugged into the grid -- by the end of 2028. That timeline is more aggressive than previous proposals and virtually impossible for most projects to meet, advocates said. The legislation also blocks credits for companies using components from adversaries such as China and adds a new tax on wind and solar projects that don't follow certain supply chain rules. Princeton University Professor Jesse D. Jenkins said he was surprised at the Senate bill's speed in ending wind and solar incentives and shocked at the proposed tax credit for metallurgical coal, a highly polluting form of coal that is used in steel-making and often exported to countries like India and Brazil. "This bill kills the industries of the future while subsidizing the industries of the 19th century. It's insanity!" Jenkins said in a post on social media. If passed as proposed, the bill lead to higher energy prices, fewer jobs, less investment in American energy production and less confidence in the American business environment, Jenkins said. A volley of responses comes in from both sides Tom Pyle, president of the conservative American Energy Alliance, called the Senate bill a move in the right direction. "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," Pyle said, referring to the 2022 climate law. "Extending green giveaways on the backs of American taxpayers is shortsighted and neglectful," Pyle said. "It's time for Congress to deliver both energy reliability and the largest tax cut in history to President Trump and the American people." Jason Grumet, CEO of the American Clean Power Association, called the Senate bill a "midnight dumping" and said it would punish the fastest-growing sectors of the U.S. energy industry. "It is astounding that the Senate would intentionally raise prices on consumers rather than encouraging economic growth and addressing the affordability crisis facing American households," Grumet said. The bill would "strand hundreds of billions of dollars in current investments" and land hardest on rural communities that would benefit the most from clean energy investment, he said. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, called the bill "a direct attack on American energy, American workers and American consumers." "Make no mistake: If this bill passes, Americans will pay the price -- literally," Hopper said. "Power bills will rise. Factory jobs will vanish. Families will be forced to spend more just to keep the lights on and their homes cool. All while we become more dependent on foreign energy and more vulnerable to blackouts."

Opinion | How Trump's 'Big, Beautiful Bill' Will Make China Great Again

Can you hear it -- that loud roar coming from the East? It's the sound of 1.4 billion Chinese laughing at us. The Chinese simply can't believe their luck: that at the dawn of the electricity-guzzling era of artificial intelligence, the U.S. president and his party have decided to engage in one of the greatest acts of strategic self-harm imaginable. They have passed a giant bill that, among other craziness, deliberately undermines America's ability to generate electricity through renewables -- solar, battery and wind power in particular. And why? Because they view those as "liberal" energy sources, even though today they are the quickest and cheapest ways to boost our electricity grid to meet the explosion of demand from A.I. data centers. It is exactly the opposite of what China is doing. Indeed, Beijing may have to make July 4 its own national holiday going forward: American Electricity Dependence Day. You cannot make this up: China and even Saudi Arabia are doubling down on solar power to meet the needs of the A.I. data centers it wants to recruit from the West, while Trump's "big beautiful bill" actually does just the opposite. It quickly phases out tax credits enjoyed by utility-scale solar and wind -- as well as electric vehicle tax credits. This virtually guarantees that China will own the future of solar energy, wind power and electric cars and trucks, as well as autonomous vehicles. Thankfully, Trump and friends did keep until 2036 a major Biden-era tax credit for companies that build other emissions-free technologies like nuclear reactors, hydroelectric dams, geothermal plants and battery storage. The problem is that it can take up to 10 years to build a nuclear plant in America, and, as The Times reported, the bill added "complex restrictions" to the battery credits "that bar recipients from having ties to 'prohibited foreign entities' like China.'' As a result, "some worry that the restrictions are so complicated that the credits could end up being unusable for many projects." In sum, this dog's breakfast of a bill -- rushed through without a single congressional hearing with independent energy experts or even one scientist -- is sure to put at risk billions of dollars of investments in renewable energy, mostly in Republican states, and potentially kill the jobs of tens of thousands of U.S. workers. By the way, the bill also bans for 10 years a first-ever fee on excess methane emissions from oil and gas production, a key driver of global warming. So, in one fell swoop, this bill will make your home hotter, your air-conditioning bill higher, your clean energy job scarcer, America's auto industry weaker and China happier. How does that make sense? It doesn't. And the person in America who knows that best is actually Elon Musk. It is really sad to me that Musk, who is without question one of America's greatest manufacturing innovators -- having started globally leading companies making electric vehicles, renewable rockets, battery storage and telecommunications satellites -- has discredited himself with so many voters because of his dalliance with Trump and because of his Department of Government Efficiency's capricious cuts to the government work force. Because of that, many will not understand the vital truth that Musk has been shouting to his fellow Americans: Trump's bill is "utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future." This is not complicated and this is what China knows: There has never been a more intimate connection than there is now between a nation's ability to generate huge amounts of electricity at affordable prices (and in the cleanest way possible) and its ability to develop A.I. engines that consume huge amounts of electricity as they learn and generate answers that could give us the tools we need to cure diseases, discover new materials and even produce the holy grail of cheap, clean, climate-saving fusion energy. To put it differently, there has never been a more intimate connection between the amount of cheap, clean electricity a nation can generate for A.I. models and its future economic and military might. That is why Musk and many others find it so "insane and destructive" that Trump and his G.O.P. cult have rejected an energy policy of "all of the above as clean as possible as fast as possible" -- oil, natural gas, coal, wind, hydro, nuclear, solar, geothermal, hydrogen -- that is always working to phase out the dirtiest for the cleanest, the way China often has. Instead, Trump has chosen instead to kneecap America's renewable energy industry the way China has not. The president has even called clean energy tax credits a "scam," saying he'd rather spend the money anywhere else. This is industrial-scale foolishness. I was struck by a quote from an energy expert in The Wall Street Journal the other day. "The big-picture outlook for energy is we are going to be less competitive because of this law," said Nick Nigro of Atlas Public Policy. "Ten years from now we could look back on this moment as the time in which the U.S. pulled back and essentially lost the transition to clean energy." Alas, truth be told, Democratic Party progressives helped to make Trump and his party this foolish on energy with their own crazy fantasies. Too many of them behaved as if we could go cold turkey from a fossil fuel economy to a clean and green one, without scaling cleaner fuels to bridge the transition, like natural gas and nuclear, and without loosening permitting standards for more transmission lines to get clean power from the middle of the desert to the cities where it is needed. Few Americans understand how far ahead of us China already is in this realm and moving farther ahead, and faster, every day. Consider this snapshot: In 2000 China produced just over 1,300 terawatt hours of electricity while the U.S. produced nearly 3,800 (a terawatt is equal to a million megawatts). Fast forward to today, China produces over 10,000 terawatt hours while the U.S., since 2000, has added only 500 -- an increase of only 13 percent in two and a half decades. Much of China's electricity growth originally came from expanded coal-fired generation, but in recent years it has been driven by expanding hydro, solar, wind and battery sources, which are easier, cheaper and quicker to build and also help the climate. As a recent article from Shanghai in the The Financial Times put it: "China is on its way to becoming the world's first 'electrostate,' with a growing share of its energy coming from electricity and an economy increasingly driven by clean technologies. It offers China a strategic buffer from trade decoupling and rising geopolitical tensions with the U.S." As for Trump's goal of making America globally energy dominant during his term of office, his bill just made that impossible. There is no path to energy dominance in the next five years without renewables. Let's say you want to generate additional electricity for more data centers just through natural gas today. Even if you have an abundance of gas, as America does, you need more giant turbines to convert the gas to electricity. If you ask the major manufacturers of those turbines -- GE Vernova, Siemens Energy and Mitsubishi Power -- they will likely tell you that they will be very happy to deliver you one, but you will be lucky to have it installed by 2030. That is how long their backlogs are. And there is no telling what that turbine will cost with all of Trump's new steel and aluminum tariffs. By contrast, you can build and put online a new solar farm with battery storage in Texas in just 18 months. "During the past quarter, Texas took the lead in clean power installations, adding an impressive 2,596 MW of new utility-scale solar, wind and storage capacity," reads an October research report from Texas A&M, referring to megawatts of power. "This milestone marks the first time Texas has surpassed California to become the top solar state in the nation.'" A Texas energy expert, Doug Lewin, posted last week that the Texas grid, known as ERCOT, recently reported that the state had added 10,000 megawatts of power in just the last year -- most of it from supercheap solar power with battery storage, so energy can be distributed at night when the sun is not shining. As a result, Texas has seen a drop in brownouts on its grid because of more renewables combined with bigger storage batteries. Texas can still deploy solar-plus-batteries in the future, but now the electricity will cost consumers a lot more thanks to the Trump bill. If that higher monthly electricity bill bothers you, call Energy Secretary Chris Wright. He assuredly knows better, but like every other sycophant in Trump's cabinet he seems to have just told the boss what he wanted to hear. As Wright must know, solar energy plus storage batteries made up 81 percent of the new electricity capacity added in the U.S. in 2024, according to the U.S. Energy Information Administration. Now Trump's idiotic bill will slash that amount. The result for Americans? The research firm Energy Innovation, whose peer-reviewed energy modeling is widely respected, projects that Trump's effort to diminish America's renewable energy industry will cause wholesale electric power prices to increase roughly 50 percent by 2035, and that cumulative annual consumer energy costs will increase more than $16 billion by 2030. It also projects that some 830,000 renewable energy jobs will be lost or not created by 2030. For all of these reasons, I am certain there are only two political parties in the world today cheering the passage of this bill: Trump's Republican Party and the Chinese Communist Party -- because nothing is more destined to make China great again than Trump's "big, beautiful, America surrenders the future of electricity to Beijing" bill. The Times is committed to publishing a diversity of letters to the editor. 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Congress Is Raising Electricity Bills to Pay for Tax Cuts

The Republican megabill could be setting America up for the worst energy-affordability crisis since the 1970s. Of all the elements of the One Big Beautiful Bill Act, perhaps none is as obviously self-defeating as getting rid of tax credits for clean energy. That decision will not simply set back the fight against climate change. Congressional Republicans could also be setting America up for the worst energy-affordability crisis since the 1970s. Unlike then, this time we'll have imposed it on ourselves. Electricity demand in the United States is rising faster than it has in at least two decades. AI data centers are using huge amounts of power to train new models. More Americans are plugging their electric cars and hybrids into the grid. Rising temperatures mean more air-conditioning use. Failure to meet this rising demand with adequate supply results in higher prices. From 2000 to 2022, U.S. electricity prices rose by an average of about 2.8 percent a year; since 2022, they have risen by 13 percent annually. Fortunately, the timing of this demand spike coincided with a boom in renewable energy. According to the federal Energy Information Administration, 93 percent of the electricity capacity added to the grid this year will come from a combination of wind, solar, and battery storage. That trend was set to accelerate dramatically in the coming years thanks to the Inflation Reduction Act, which provided tax credits that made building clean power sources cheaper. Investment in those sources has accordingly spiked, and hundreds of new projects could begin generating power over the next decade. The IRA is generally seen as a climate bill, but it was also an energy bill. It provided a jolt to the American power sector at a moment when the sector desperately needed new supply. Or so it seemed. The Senate version of Donald Trump's One Big Beautiful Bill repeals the clean-energy tax credits in the IRA for all wind and solar projects that don't begin construction within a year of the bill's passage or become fully operational by 2028. (And even if a project begins construction in the first half of 2026, it will need to meet extremely onerous domestic-sourcing requirements that many experts believe will be nearly impossible to satisfy.) As a result, future clean-energy projects, including many that have been announced but not yet built, will cost about 50 percent more than those that received the credits, according to an analysis by Jesse Jenkins, who leads the Princeton ZERO Lab. The inevitable result is that far fewer will come into existence. "It's hard to think of a bigger self-own," Jenkins told me. "We're effectively raising taxes on the country's main sources of new power at a time when electricity prices are already rising." Jonathan Chait: They didn't have to do this The purported justification for these cuts is that renewables are unreliable energy sources pushed by woke environmentalists, and the country would be better served by doubling down on coal and natural gas. "More wind and solar brings us the worst of two worlds: less reliable energy delivery and higher electric bills," wrote Trump's Energy Secretary Chris Wright in an op-ed last week. In fact, renewable energy is cheap and getting cheaper. Even without the tax credits, the price of onshore wind has fallen by 70 percent, solar energy by 90 percent, and batteries by more than 90 percent over the past decade. The IRA, by making these sources even more affordable, was projected to save American consumers an average of $220 a year in the decade after its passage. The cost savings from renewables are so great that in Texas -- Texas, mind you -- all of the electricity growth over the past decade has come from wind and solar alone. This has made energy grids more reliable, not less. During the summer of 2023, the state faced several near failures of its electricity grid; officials had to call on residents to conserve energy. The state responded by building out new renewable energy sources to stabilize the grid. It worked. "The electrical grid in Texas has breezed through a summer in which, despite milder temperatures, the state again reached record levels of energy demand," The New York Times reported last September. "It did so largely thanks to the substantial expansion of new solar farms." In fact, the energy secretary's description of wind and solar -- as unreliable and expensive -- is more aptly applied to fossil fuels. Coal is so costly relative to other energy sources that investment in building new plants has dried up. The natural-gas industry is facing such a crippling supply-chain crisis that the wait time for a new gas turbine -- the combustion engine that converts natural gas to usable energy -- can be as long as seven years. "What we've consistently heard from the industry is that, right now, there is just no way to get a new natural-gas plant running before 2030, and quite possibly even later," Robbie Orvis, the senior director for modeling and analysis at the think tank Energy Innovation, told me. The cost of actually building one of those plants, meanwhile, has more than doubled in the past few years, pushing utilities to invest heavily in renewable sources, which can be built much faster and often at a lower cost. Now Congress has decided to kneecap the energy sources that are available to meet rising demand. Orvis predicts that this could result in one of the fastest, sharpest rises in energy prices since the Arab oil embargo of the 1970s, which featured record-high oil prices, long lines and rationing at gas stations, and a nationwide inflation spike. An Energy Innovation analysis of an earlier, similar version of the bill found that, by 2035, the average yearly energy bill will be $473 higher in Michigan, $590 higher in Maryland, $668 higher in California, and $777 higher in Texas than it would have been if the IRA credits had remained in place. (Several other sources have produced similar results, including analyses of the final Senate bill.) Blackouts and grid outages will become more frequent. Power-intensive industries such as AI and manufacturing will struggle under the weight of higher energy costs. China will solidify its dominance over clean-energy supply chains. "Just think of Trump's own priorities: lower energy prices, becoming an AI superpower, reindustrializing America, outcompeting China," Princeton's Jenkins said. "Getting rid of these credits hurts all of those goals." But there is one priority missing from that list: owning the libs. Partisan polarization around clean energy has grown so extreme since the passage of the IRA that Trump and many other Republicans apparently see destroying it as an end in itself. An earlier version of the Senate bill went further than repealing subsidies. It included an excise tax on solar and wind energy -- the Republican Party, taxing energy -- that would have added an additional 10-20 percent cost onto most projects. That provision was scrapped after a handful of moderate senators objected, but the fact that it ever existed is stunning enough. As the bill headed to the House of Representatives for final consideration, some members claimed that they wouldn't support it without even harsher restrictions on clean energy. Representative Chip Roy of Texas attacked the Senate bill for not targeting clean-energy tax credits more aggressively, calling it "a deal-killer of an already bad deal" and setting up the absurd possibility that the IRA would be saved only by Republicans' inability to agree on how badly to eviscerate it. Jessica Riedl: Congressional Republicans might set off the debt bomb The desire to stick it to liberals is so intense that Republicans are evidently willing to inflict disproportionate economic pain on their own voters. The Energy Innovation analysis found that the states that will experience the sharpest increase in electricity costs as a result of the bill are Kansas, Texas, Oklahoma, South Carolina, Missouri, and Kentucky. A separate analysis found that of the 10 states that will lose the most total renewable energy capacity as a result of the repeal, nine voted for Trump last year. Congressional Republicans might be betting that the consequences of their legislation will take long enough to materialize that they won't be blamed. Thanks to the numerous clean-energy projects in the pipeline today, the sharpest energy-price increases won't come into effect until after 2030. By that time, a Democratic president could very well be in office, stuck with the higher energy costs sown by their predecessor, reaping the political whirlwind.

GOP tax bill draws flack on energy provisions from some onetime allies

The massive legislation slashes federal funding on renewables and clean energy initiatives just as U.S. energy demand soars. The massive tax and immigration bill advancing through Congress could raise energy prices in much of the United States and make it harder for American companies to compete globally on AI and manufacturing as a result of deep cuts to federal support for wind and solar power, batteries and other renewable technologies, a wide range of experts warned on Sunday. Notably, some conservative voices, including the chief policy officer of the U.S. Chamber of Commerce, fossil fuel advocate Alex Epstein and onetime Trump ally Elon Musk, have vented their frustration about the bill's potential impact on energy prices and American business. "A massive strategic error is being made right now to damage solar/battery that will leave America extremely vulnerable in the future," Musk wrote on X on Sunday. In addition to phasing out tax credits for wind and solar power by 2027, the Senate version of the bill would add a new tax on wind and solar projects built after 2027 that use equipment made in China, which has rankled conservatives who worry it will raise energy prices. The bill also requires the federal government to sell more oil and gas leases and approve more coal production. Ultimately, power companies may still build many of the same renewable energy projects they were already planning, experts say. Wind and solar are still the fastest-to-build power sources available, while there's a years-long backlog for new natural gas turbines and nuclear plants face major delays. But the cost of building renewable projects will spike as subsidies vanish and cautious lenders demand higher interest rates to finance construction. "We will still build renewables," said Doug Lewin, president of the energy consultancy Stoic Energy and author of the Texas Energy and Power newsletter. "But we're going to build less of them, and what we build will be more expensive." Those who have cheered the end of subsidies for renewable power argue they have skewed the market toward less reliable sources of energy that ebb and flow with the weather. "Ending these federal giveaways will lead to a more market-driven allocation of capital, favoring energy sources that are more economically efficient and better suited to meeting growing demand," Thomas Pyle, president of the Institute for Energy Research, said in an email Sunday. The bill "positions the U.S. more effectively to respond to surging electricity demand," he added. "The prior trajectory toward 'net zero' emissions would have constrained capacity expansion and posed reliability risks." After a debate and consideration of amendments, senators expect to vote on the bill sometime on Monday. GOP leaders are still scrambling for votes with their razor-thin majority, but if they succeed, the measure will go back to the House for final approval in hopes of meeting President Donald Trump's self-imposed Independence Day deadline. The House passed a version of Trump's agenda in May, with similar cuts to energy spending. Energy costs expected to rise Congress is taking up the sweeping legislation as American energy demand is spiking as new data centers and factories devour more electricity -- something many in the fossil-fuel industry acknowledge. "Demand for affordable, reliable energy is increasing across all aspects of the economy, and the growth in AI will require around-the-clock power driven largely by natural gas," American Petroleum Institute President Mike Sommers wrote in a statement Sunday. "This bill seizes the opportunity to secure our energy future by unlocking investment, opening lease sales and expanding access to oil and natural gas." But power companies won't be able to meet that demand quickly with gas alone, experts say. Amid a global shortage of natural-gas turbines, the wait for new gas-burning power plants is up to seven years, according to S&P Global. New nuclear plants could take even longer. Companies are extending the lives of old coal plants, but they aren't investing in new ones because they're too expensive. Solar panels, wind turbines and batteries can be built more quickly and already make up more than 90 percent of the new electricity added to American power grids each year. That means power companies will keep building them even without subsidies -- they'll just shift the cost onto their customers, experts say. "We've got this surging energy demand. Our ability to deploy more stuff that's not wind, solar and storage is supply-chain limited. And what Congress wants to do is make it significantly more expensive to build out the stuff we can build," said Robbie Orvis, senior director for modeling and analysis at the clean-energy think tank Energy Innovation. "And that means it will make electricity rates more expensive." Power companies won't just pass on the cost of their lost tax credits, experts say. They'll also pass on the cost of a new tax on wind and solar equipment built in China, taking effect in 2027, that Senate Republicans included in their version. That tax is paired with funding cuts for American wind and solar manufacturing, making it less likely that power companies could switch from Chinese to U.S. suppliers. "Electricity demand is set to see enormous growth & this tax will increase prices," Neil Bradley, chief policy officer of the traditionally GOP-friendly U.S. Chamber of Congress, posted on X on Saturday. "It should be removed." Another risk that industry watchers see: The whipsaw policy changes from former president Joe Biden to Trump have spooked investors, meaning they'll charge higher interest rates when they lend money to energy projects to make up for the risk they're taking, which also raises the price of energy. "That uncertainty has to be priced into future financial deals for these projects," Orvis said. Still, while energy price hikes are expected, they will vary from state to state, according to economic models from policy think tanks including Energy Innovation and the Rhodium Group. Growth of data centers and manufacturing will slow Rising energy prices and delays in building new power plants will slow the growth of factories and data centers in the United States, experts say. "If they can't find the power here, they will go somewhere else to find the power," said John Hensley, senior vice president for markets and policy analysis for the American Clean Power Association, an industry group representing wind and solar interests. "You're already starting to see them look at places like Canada, Iceland or the Nordic countries that have surplus electricity available." Meanwhile, tech companies urged lawmakers to focus on the implications for artificial intelligence. Lawmakers should "deploy an all-of-the-above energy strategy that ensures sufficient generation capacity from a diverse supply of energy sources, including nuclear, geothermal, and solar to support the development of AI," Janae Washington, a spokesperson for the Information Technology Industry Council, wrote in an email on Sunday. "We urge the Senate to prioritize a reliable and resilient energy mix that advances AI innovation and growth and reject provisions that will harm the U.S.'s ability to compete in the global race for AI and energy dominance," Washington wrote. The bill would also end direct subsidies for making solar panels, wind turbines, batteries and electric cars in the United States. Spooked manufacturers are already canceling planned factories, and the swift end of promised tax credits could doom the brief boom in U.S. manufacturing, which is mostly built on EVs and green energy projects. Some experts worry that will cede key industries to Chinese firms at the expense of the United States. "We're undermining the entire infrastructure to onshore those industries, and we're going to make it a lot more expensive for other industries like AI and data centers to move here and to onshore here by making their energy costs go through the roof," Orvis said. Meanwhile, North America's Building Trades Unions estimates the bill will eliminate up to 1.75 million construction jobs. "If enacted, this stands to be the biggest job-killing bill in the history of this country," the group warned Saturday. "Simply put, it is the equivalent of terminating more than 1,000 Keystone XL pipeline projects." The push to 'electrify everything' will dwindle Under the Biden administration, green energy advocates imagined a nationwide push to reshape the energy system and "electrify everything," switching cars from gas engines to electric motors, homes from gas furnaces to heat pumps, and so on. That push was always going to be an expensive challenge -- and a top target for Republicans. "Even before this legislative shift, the feasibility of fully electrifying transportation, heating, and industrial processes was already in question due to the physical and economic realities of the grid," wrote Pyle, of the Institute for Energy Research, in his email. In the long run, the United States is still moving toward replacing some fossil fuel energy sources with electricity -- but much more slowly than it seemed a year ago, experts say. "Based on this legislation and everything else the administration has done so far, there will definitely be a slowdown in the rate of electrification," Orvis said. That will have consequences for climate change and air quality, but it may also put the country at a competitive disadvantage in the emerging clean energy industry. "The rest of the world is going to continue to electrify, and they'll get all the parts and components from China," said Lewin. "China is going to be able to wield significant political power in the world because of their lock on the supply chain for electricity."

How the Trump tax bill could help China win at A.I.

The GOP tax bill guts subsidies for the fastest-growing sources of U.S. electricity, solar and wind. Meanwhile, China races ahead with a broad energy strategy. Republicans in Congress produced a surprise winner this week when they axed hundreds of billions of dollars in federal clean-energy subsidies: China's artificial intelligence industry. China is pouring money into energy production to support its bid to dominate AI. America's tech industry, meanwhile, has been scrounging for more energy to run power-hungry AI data centers and strongly urged Congress not to wipe out solar and wind tax credits. Solar panels and windmills are the fastest-growing sources of power in the United States, accounting for 80 percent of new energy being added to the grid. Yet Republican lawmakers and Trump administration officials remain intent on stifling clean energy progress in America, calling it Biden-era folly. Now the consequences of the massive cuts in the GOP tax and budget bill are coming into focus. Modeling of the package by energy economists shows they will substantially reduce the amount of electricity added to the U.S. power grid in the coming years, even as China races ahead. Wind and solar power "is critical in the near term," said Ben King, director of the U.S. energy program at the Rhodium Group, a research firm that has developed projections of the bill's impact. "This creates a risk that energy projects just won't get built. At the same time, China is adding staggering electricity capacity." The wind and solar electricity China added to its power grid in just the first five months of this year is more than quadruple all the new electricity the U.S. added to its grid from all sources in 2024. China is simultaneously rapidly expanding its fleet of fossil fuel and nuclear plants. The Trump administration plans to accelerate new electricity generation from natural gas and nuclear power, but those efforts will take years, experts warn. There are no major new nuclear plants under construction, and they can take a decade or more to build. A global backlog of gas turbines means it can take five years just to build a single new gas-powered plant. "We need a huge amount of electricity after 20 years in which we did not have to deal with rising demand," said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. "Other countries are moving fast and being quite innovative. If we are not adding new power to the grid, companies are going to have to get it from other places." According to the think tank Energy Innovation, the cuts in the Senate's version of the bill, which survived the House vote intact Thursday, would reduce the amount of new electricity the U.S. is able to bring online over the next decade by 344 gigawatts -- enough to power nearly half the homes in the country. The loss of such generation would create an immense challenge for not just AI companies, but other industries needing to power factories as well as residential customers struggling with rising utility costs. The models are built on the premise that the loss of tax credits will boost development costs, which would require solar and wind operators to force up rates, rattling investors and risking the viability of projects. The 344 gigawatts in new power that Energy Innovation estimates would be lost is based on an assumption that solar and wind development drops 50 percent by 2035. The Trump administration waves away such warnings as overblown. The president says the tax credits that have propelled the growth of renewable energy in the U.S. are a "scam," arguing wind and solar installations are a blight on the landscape. The administration contends intermittent energy produced by wind and solar, despite advances in battery technology, don't meet the needs of industry, especially the enormous, 24/7 demands of AI data centers. Energy Secretary Chris Wright calls renewable energy a "parasite" on the power grid, undermining its stability and consuming transmission-line capacity that could be delivering more stable gas or nuclear energy. "Winning the AI race will require a significantly larger supply of around-the-clock, reliable, and uninterrupted power - unfortunately, this was not a priority of the last administration," he said in a statement Wednesday night. Tech firms and their industry groups say that eliminating the tax incentives for clean power hamstrings their ability to compete with Chinese AI development. They also say it could lead to soaring electricity prices in the United States. Both the Data Center Coalition and the Clean Energy Buyers Association, industry groups led by tech firms, warned lawmakers that the imperiled tax credits are needed for domestic AI growth. The key tax credits for large wind and solar installations will be phased out for projects not under construction by the end of June 2026 under the bill, which Trump hoped to sign on Friday following expected House passage. The Biden-era incentives would have extended into the 2030s. There are thousands of eligible projects that have been announced but not yet started, amounting to half a trillion dollars in planned investment, according to Energy Innovation. Now the question is how many of those projects can start construction before the deadline. Depending on how many projects can get shovels in the ground quickly, said Aaron Zubaty, CEO of Eolian, a large clean energy developer, "the U.S. has a fighting chance to keep major data center developments domestic and not lose them to the Middle East." But, he said, China's advantage is nonetheless cemented by the budget bill. "I've had multiple people I work with in Europe say to me that it is pretty clear who is going to be the dominant superpower in a decade, and that it will not be the U.S.," he said. "Dominance now depends on who has the most electricity. And by only building new gas, coal, and nuclear power plants you are not going to be able to grow U.S. supply quickly enough." Industry officials say countries like Saudi Arabia, Qatar and the United Arab Emirates are aggressively courting American AI projects, offering plentiful, cheap power from renewables and gas. But locating major U.S. AI infrastructure in a region where alliances are constantly shifting and enemy combatants are an arm's length away, "is not good for America's national security interests or its economy," Bordoff said. To keep up with the demands of AI and other industries, federal regulators say the United States needs to add to its grid by 2035 the amount of power used by all of California, Texas and New York combined. Many companies are feeling burned by the abrupt reversal of clean energy incentives, said Jason Grumet, CEO of the American Clean Power Association, which represents several large companies heavily invested in both gas and renewables. As the Trump administration encourages investment in gas plants, companies are left to wonder if the federal support will still be there after a new president is in office. "Every part of the energy economy is worried that they will make investments that in four years will be disfavored by the next administration," Grumet said. "We need durable energy policy."

Trump's clean-energy grenade rattles high-tech industries

Why it matters: Critics say President Trump's megabill amounts to an abject surrender in the battle for the future of energy. The consequences for U.S. jobs, electricity prices and the AI arms race could reverberate for decades. Threat level: Jason Bordoff, who leads Columbia University's energy think tank, said the bill could hinder the U.S. in the AI race with China. "We need all the tools in the toolkit to meet rapidly rising electricity demand very quickly to win a competitive race with China for leadership in AI, and this bill makes that harder by throwing sand in the gear to renewable energy," he argued. The big picture: Trump has made "unleashing American energy" a pillar of his second-term agenda, casting it as central to both fighting inflation and powering the AI revolution's insatiable power demands. Between the lines: Trump has long favored fossil fuels, and he made clear on the campaign trail that he would reverse as much of President Biden's climate legacy as possible. What they're saying: In an interview with Fox News on Sunday, Trump called solar panels "ugly as hell," dismissed wind turbines as destructive, and praised coal as "clean, beautiful" and "very powerful." What to watch: Critics and clean-energy analysts warn the policies in the GOP bill could ripple across industries, supply chains and geopolitical fault lines. Friction point: Several GOP senators led by Sen. Joni Ernst and Lisa Murkowski are negotiating to soften the bill slightly, especially by stripping out new taxes on wind and solar projects. But their amendment has not yet received a vote. Zoom in: Analysts who support low-carbon energy warn of dire economic consequences if either the Senate or House versions of the GOP budget bill become law. State of play: As it stands, the Senate bill would quickly remove $7,500 consumer tax credits for buying electric cars, as well as credits for large wind and solar projects that aren't connected to the power grid by 2028. Other provisions in the Senate bill include: The House GOP version similarly pares back subsidies in the Democrats' 2022 climate law and beyond, though the measures are not identical. The bottom line: Bordoff, an Obama-era White House energy and climate aide, warned the "pendulum will swing back" on climate change -- and the U.S. risks falling behind when it does.

Trump's Big Beautiful Bill will accelerate an American energy crisis -- and it could cost the U.S. the AI race

America is facing an energy imperative: Grow power from all sources or face potential failure. That's failure in the race against China for AI supremacy; failure to provide ample affordable power for its citizens; and failure to make energy as clean as possible as climate change woes mount with each passing year. As President Donald Trump has touted American energy dominance, he has leaned on executive orders to expedite natural gas-fired power and new nuclear plants. But regulatory and supply-chain bottlenecks still put those projects several years out. Meanwhile, Trump's "One Big, Beautiful Bill" is intentionally handicapping more easily and faster-built wind, solar and battery storage projects that would help satiate the massive data center power demands of the large-scale cloud service providers known as hyperscalers. The final legislation approved by Congress on July 3 (the House concurred on a 218-214 vote) agrees to quickly unwind the clean energy tax credits that could have helped strengthen an already stretched electric grid. The GOP is leaning on clean energy cuts to support fossil fuels, while channeling the president's own anti-renewables sentiments: He has often decried the intermittent nature of wind and solar -- even if that unpredictability is increasingly offset by the growth of battery storage for renewable energy. And of course cutting tax credits helps offset federal spending elsewhere in the bill. Unsurprisingly, the clean energy industry is up in arms about the BBB legislation. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said it will increase electricity bills, shut down manufacturing facilities, cost many thousands of U.S. construction jobs, and weaken the grid. "This legislation [will] set back America's global competitiveness, destabilize our energy future, and weaken the very industries that power our economy and strengthen our national security -- while surrendering the 21st-century tech race to China," she said. On the other hand, with money flowing from fossil fuel interests to support Trump and Republicans last year, oil and gas lobbyists -- who frequently decry clean energy tax credits as unfair -- praised the final bill. Melissa Simpson, president of the oil and gas industry's Western Energy Alliance, hailed the "monumental bill that'll unleash the energy we need." She specifically touted "provisions promoting oil and natural gas production on public lands" and the halting of the emissions-related "excessive tax on natural gas." The final legislation rapidly phases out tax credits for all clean energy projects not online by the end of 2027 -- exempting those that break ground by June 2026. The Senate's original, less draconian language required starting construction by the end of 2027 -- a subtle but massive timeline difference for those scrambling to get projects up and running. This isn't just a problem for clean energy developers or environmental advocates; it could dramatically slow the country's planned and much-needed rapid increases in power generation. In simple terms, that means less power for increasingly electricity-hungry tech and manufacturing sectors, and a growing population -- meaning higher power bills for everyone, and possible shortfalls and brownouts. "The bill doesn't just burden families, it undermines our country," said Ari Matusiak, CEO of the Rewiring America nonprofit. "We need low-cost, abundant energy to compete globally. We will become collectively poorer, less resilient, and less equipped to lead in a rapidly changing world." After all, renewables accounted for almost 90% of new power generation installed in the U.S. last year, according to the Department of Energy. Cutting deadlines back to 2027 for completing most projects will result in about 20% fewer clean energy projects being built in the U.S. over the next 10 years, according to S&P Global Commodity Insights projections. "That's extremely meaningful," said Roman Kramarchuk, head of climate market and policy analysis for S&P Global. "This isn't 20% of a small share; this is 20% of the strong majority of the new deployments. "That's rough," he added. "What it will do is increase costs for power." Instead of so-called energy dominance, there's a growing plea from tech, utilities, and political moderates for scaled-up "energy abundance" -- a stance that embraces all forms of power to more rapidly build capacity and help push down prices. But both political parties have been tripped up by ideology, failing to support a strategy that includes clean energy and natural gas -- with the GOP targeting renewables and Democrats fighting fossil fuels. That's despite the urging of the Edison Electric Institute (EEI), an organization representing investor-owned electric utilities nationwide, and many others. "We're in unprecedented times for our industry; we haven't seen this type of load growth since the advent of air conditioning," EEI chairman and Exelon CEO Calvin Butler told Fortune. "We have to get new power generation built. It's going to take the all-of-the-above portfolio approach -- nuclear, gas, wind, solar, and new technologies like battery storage." Butler said he would have supported the legislation if it allowed clean energy projects to break ground by 2027, although later was preferred. "We believe the tax credits are key," he said. "We don't believe we can get to the energy dominance without having renewables as part of the solution." After U.S. power demand has remained relatively stagnant for a couple of decades, domestic electricity consumption is expected to spike by 25% from 2023 to 2035 and roughly 60% from 2023 to 2050, according to the International Energy Agency. To put those dollars in context, the entire market cap of Big Oil giant BP is $80 billion. A planned, super-sized Meta data center in Louisiana, for instance, would require twice the power used by the whole city of New Orleans. John Ketchum, CEO of NextEra Energy (173 on the Fortune 500) -- a massive utility and power developer -- estimates that anticipated gas-fired generation cannot even meet 20% of the data center needs from now until 2030. Despite record volumes of shale gas produced domestically in recent years, the turbines required to turn that gas into electricity are getting more costly and there aren't enough being manufactured because of supply chain challenges. "If it's not renewables, what is it going to be?" Ketchum said of the remaining 80% of data center power needs, while speaking at the Politico Energy Summit in June. While the legislation does not cripple clean energy -- a lot of utility-scale wind and solar will still be built -- it does substantially weaken its access to tax breaks and increase costs. A prior version of the bill didn't just phase out the tax credits; it also placed a brand-new excise tax on clean energy projects -- one that even renewable energy opponents bristled at. Some projections estimated the tax easily could have killed most pending clean energy projects, making them economically not viable. That tax was removed just before final Senate voting. Another last-minute change exempted clean energy projects from losing the tax credit if they break ground by June 2026, even if they exceed the 2027 completion deadline -- although these are still very tight timelines. Likewise, the legislation keeps the "transferability" of tax credits -- the removal of which was considered a backdoor "poison pill" meant to cripple the program. Transferability allows smaller developers to raise capital by transferring tax credits at a discount to larger buyers that can immediately take advantage of the tax benefits. The original House version of the bill had eliminated transferability. The legislation also places new "foreign entity of concern" (FEOC) provisions on renewable energy projects. The FEOC rules, which only applied to electric vehicle tax credits in the Inflation Reduction Act, would now apply to all clean energy tax credits, essentially limiting needed supply-chain materials from China. The House bill placed arduous FEOC provisions on projects, but the final version takes a more measured, phased-in approach. No matter how much new manufacturing is built in the U.S., many of the materials still only come from China and any delays or missteps cede more ground to China in the middle of a brawl for AI dominance as China rapidly builds more power from coal to wind and solar. While China is currently more reliant on coal than the U.S., China now sources about one-third of its power from renewables -- compared to about 22% in the U.S. -- and China is currently installing more solar power, for instance, than the rest of the world combined. As China continues to rapidly build more generation, U.S. slowdowns in any forms of new electricity infrastructure will give China more of a power boost in the AI race to supremacy. The legislation also undoes a bevy of other clean energy and efficiency efforts. The electric vehicle tax credit is axed, as is the credit for residential solar projects and for other home energy efficiency efforts. The megabill also comes as the Trump administration aims to roll back energy efficiency standards for home appliances and more. "Families will face rising electricity costs with fewer tools to do anything about it," said Matusiak of Rewiring America. "As energy demand from AI, data centers, and manufacturing explodes, households are boxed in, expected to pay more while getting less." Residential electricity costs in the U.S. already have risen by 13% on average from 2022 until now, according to the Department of Energy. And they are projected to keep increasing with demand growth from data centers and higher natural gas prices as a wave of liquefied natural gas export projects come online between now and 2030. Next up in the renewables sector is the continuation of a rabid race to break ground on clean energy projects to beat the tax credit deadlines. In a way, the more stringent the timelines, the bigger and faster the mad dash is to qualify for tax breaks -- even if fewer will be built overall. "This sector has done this before," Kramarchuk said. "There's always the rush to hit the deadlines." In the push for more fossil fuel-sourced power, new gas-fired turbines that aren't already contracted will take five years or so to be built. In the meantime, that means increasing the utilization of existing gas-fired power plants and working to keep more coal plants open for longer. "It means running your existing gas or coal units harder," Kramarchuk said. Not coincidentally, a tax break for coal exports was a late add to the legislation. By 2028, 50 gigawatts of existing coal capacity are scheduled to be retired. Some of those plants must stay online for longer to bridge the gap, but how much longer is even possible is unclear. "A lot of those plants are very old and require significant capital investments to keep them going," he said. To be clear, the end of tax credits does not mean the death of renewables. The GOP-aligned super PAC ClearPath Action, which supports efforts to combat climate change, called the bill a much better draft than some earlier versions that would have imposed additional taxes on renewables and "devasted" the clean energy industry. "Senate Republicans and House allies rejected that approach and preserved some financial tools to accelerate American innovation and invest in American manufacturing," said ClearPath CEO Jeremy Harrell. It does mean, however, that wind and solar projects will become more expensive. A lot of regional utilities and smaller developers may kill the clean energy projects on their drawing boards. But the hyperscalers, of course, have bigger budgets. "New wind and solar that would've been built, can be built. It's just going to cost a lot more," Kramarchuk said. "If you're a hyperscaler, then you probably have more latitude to pay more." As for the rest of us? Our electricity and heating bills will likely rise too.

Trump has dropped a big, beautiful bomb on America's economy

Electro-tech will win in the end because it is massively more efficient. Critics of clean energy love to hurl the laws of thermodynamics at their foes but they commit two intellectual crimes themselves: they skip over the detail that two thirds of fossil energy is in aggregate lost to the skies in heat, while roughly 90pc of electric energy is used for its final function. They hide behind the fallacy of primary energy demand. How many times have you heard that 80pc of our energy still comes from fossils, as if that tells you anything? But when you replace a dinosaur light bulb with an LED bulb you slash energy use by 80pc at a stroke. When you switch from a home gas boiler to an electric heat pump powered off the UK grid on an average energy mix, you also cut it by about 80pc. Bingo. As expected, Trump's omnibus bill guts the Inflation Reduction Act, Joe Biden's Rooseveltian bid to throw America back into the global race for electro-tech supremacy before the window closes altogether. But it goes further. It actively handicaps those new technologies that fall foul of Maga ideology. It is not a return to the free market. It rigs the market to defend the legacy status quo, though geothermal is spared, and so is nuclear fusion. "America's strength has always been that it lets old industries die but now it is now blocking the Schumpeterian process of creative destruction," said Ember's Kingsmill Bond. Market commentary has honed in on America's spiralling debt-to-GDP ratio and the dangers of a compound interest trap, as indeed it should. The omnibus bill - a "disgusting abomination", says Musk - sets the US on a path of fiscal deficits of 6pc to 7pc of GDP as far as the eye can see. The US treasury relies on foreign funds to soak up this debt and they know that Trump will force the Federal Reserve to slash rates and hold down bond yields by fiat, debasing the coinage in the manner of Henry VIII after he had exhausted his plunder from the monasteries. But there is another question for markets. It will become clearer over the next five years that "going electric" outcompetes fossils on pure price in most activities. At what point do global investors conclude that America is making a fatal and irreversible error? When will they judge that USA Inc no longer deserves an equity premium, and deserves a discount instead? That fundamental re-rating may not be far off. The bill eliminates tax credits for wind and solar but creates a new tax credit for coal. The federal coal royalty rate is slashed. Fees for wind and solar projects on federal land rise fivefold. The $7,500 (£5,495) subsidy for electric vehicles is axed. Electric vehicles (EVs) will pay a $250 annual road charge, double what petrol cars pay through fuel tax. Old Auto will get an effective $2,000 subsidy by making car loans tax deductible. Few EVs qualify because they fall foul of Trump's war on Chinese clean-tech components. The US Post Office has been ordered to sell its EV fleet. You get the drift. The whole thrust of policy is vindictive. Another generation of US car buyers will be locked into old technology. By the time that is cleared, EVs will have leapt further ahead and Chinese companies like BYD will own the planet. You can take the view that there should be no subsidies but the problem with this piety is that China already manufactures 80pc of the world's solar panels, 75pc of its batteries, and 70pc of its EVs. America needs turbo-charged incentives to have any hope of catching up. Wind and solar added over 90pc of all new power in the US over the last two years. Further projects are the only possible way to meet rising electricity demand for data centres between now and 2030 since there is a five-year supply chain blockage for new gas turbines. Every other option takes too long. Energy Innovation estimates that Trump's bill will deprive America of 340 gigawatts over the next decade and push up wholesale electricity prices by 74pc. Data centres will not be built because there won't be enough power. You could hardly find a better way to sabotage America's AI ambitions. It fritters away America's advantage in industrial costs just as China reaps a mirror-image gain from installing that much new wind and solar every year, at costs take your breath away. BNEF says the cost of Chinese solar modules fell below 10 cents per watt last year. That is tantamount to free power. The combined 24/7 cost of solar and batteries is already the cheapest form of power for the large majority of mankind in low latitudes. Four fifths live in countries that are net importers of fossil fuels. These nations have no interest in perpetuating a dependency on oil and gas that drains their balance of payments, year-in, year-out. It would be insane for them to invest in new infrastructure that locks them into this wealth loss for the next 40 years, or even to think of buying Trump's LNG at an exorbitant Asian spot price of $11 per MMBtu. They will buy Chinese solar panels, and then Chinese cars. They will go full electric. The energy trillions of the future will either go to China or those countries that carefully nurture their electrification industries. America has just dropped a big, beautiful, bunker-busting bomb on its own economy.

Senate version of Trump's "big, beautiful bill" would pummel renewable energy industry with new tax

Tracy J. Wholf is a senior coordinating producer of climate and environmental coverage for CBS News and Stations, based in New York. The latest version of the bill containing President Trump's second term agenda would hobble the renewable energy industry with a new excise tax, in addition to speeding up the sunsetting of tax credits and other benefits. The additional tax on wind and solar projects, which appeared on page 558 in the version of the bill released over the weekend, is estimated to increase consumer energy prices 8% to 10% and would tax clean energy businesses an additional $4-$7 billion by 2036, according to an analysis by the American Clean Power Association. The tax would apply to all projects that go into construction after June 16 through 2036, and it would also apply to projects that are placed into service after 2027, even if they already are under construction. Alaska Republican Sen. Lisa Murkowski told Politico Monday that she planned to introduce an amendment that would tie eligibility for the wind and solar tax credits to a project's construction start date, rather than its service date. The Senate is currently holding a marathon vote series on unlimited amendments to the bill. These wind and solar projects would have to pay the tax if a certain percentage of the value of their materials are sourced from prohibited foreign countries, like China. The provision is ostensibly designed to boost domestic manufacturing, but developing these projects by working around Chinese components would be cost prohibitive, and some data and AI companies -- which require prodigious amounts of energy -- could turn to China or other countries for reliable and affordable power sources, according to clean power experts. The Senate bill also scales back or eliminates renewable energy tax breaks that have been in place since 2005 and revised and expanded a few times since then, including in the 2022 Inflation Reduction Act. The most recent expansion contained tax breaks for individuals for electric vehicles, wind and solar development, and energy efficient appliances and provided tax credits for clean electricity-generating projects that went into service from 2023 through the end of 2032. Both the Senate and the House would end the renewable energy tax credits, but the Senate would accelerate the timeline in the House version, which would end the tax credits for renewable energy projects placed in service after 2028, a year later than the Senate would. Eliminating the existing tax credits would likely kill up to 72% of the new wind and solar installations that were to be completed in the U.S. over the next decade, according to analysis from Rhodium Group, a research firm. Tesla CEO Elon Musk, who until Saturday was silent on the bill after his social media spat with President Trump over the House version, said of the Senate bill that it was "Utterly insane and destructive." "It gives handouts to industries of the past while severely damaging industries of the future," he said in a post on X. And he predicted it would "destroy millions of jobs in America and cause immense strategic harm to our country!" Musk also said, "A massive strategic error is being made right now to damage solar/battery that will leave America extremely vulnerable in the future." According to Politico, President Trump asked Senate Majority Leader John Thune to further "crack down" on wind and solar energy by phasing out clean energy credits faster, rather than sunsetting the tax incentives more slowly, which moderate senators favored. Some asked for help easing the hit their states would take as a result of cancelled projects, job losses and higher energy prices. The renewable energy industry, manufacturing unions and even some conservatives also criticized the new tax. Conservative energy expert Alex Epstein, advocates ending the green tax credits, but he appeared to be taken by surprise by the excise tax, saying in a post on X, "I just learned about the excise tax and it's definitely not something I would support." The U.S. Chamber of Commerce also quickly condemned the tax. Neil Bradly, the Chamber's executive vice president, said on social media, "taxing energy production is never good policy, whether oil & gas or, in this case, renewables. Electricity demand is set to see enormous growth & this tax will increase prices. It should be removed." The North American Building Trades Union in a statement called the bill potentially "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," the statement continued. "In some cases, it worsens the already harmful trajectory of the House-passed language, threatening an estimated 1.75 million construction jobs and over 3 billion work hours, which translates to $148 billion in lost annual wages and benefits."

Senate GOP tax bill could crush wind and solar power, advocates say

WASHINGTON -- Clean energy advocates were already bracing for a Republican-led bill that would phase out tax credits for wind, solar and other renewable energy as President Donald Trump and GOP lawmakers moved to dismantle the 2022 climate law passed by Democrats under former President Joe Biden. But a proposal that emerged over the weekend was even more drastic than they thought. It was more aggressive in ending incentives for clean energy than a previous Senate version and would even impose new taxes on some wind and solar projects while boosting production of coal used in steelmaking. The Senate was moving Monday to approve Trump's big bill of tax breaks and spending cuts even as Democrats lined up to challenge it. The GOP plan is "a death sentence for America's wind and solar industries" that will lead to a spike in Americans' utility bills and jeopardize hundreds of renewable energy projects slated to boost the nation's electric grid, said Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee. "Their plan started out as a phase-down of the tax credits I wrote for wind and solar" in the 2022 climate law, Wyden said. "But now they're proposing an outright massacre with punishing new taxes on these industries that happen to be the cheapest and easiest ways to get new energy on the grid." Republicans said the tax-cut bill represents historic savings for taxpayers and supports production of traditional fossil-fuel energy sources such as oil, natural gas and coal, as well as nuclear power, increasing reliability. "To achieve this record level of savings, we are slashing Biden's Green New Deal spending and promoting America-First energy,'' Idaho Sen. Mike Crapo, chairman of the Senate Finance panel and a lead architect of the bill, said in a statement. "We stop penalizing fossil fuels in favor of unreliable and expensive green energy, and instead support consistent energy sources, making energy affordable again." Crapo said. The Senate bill eliminates "hundreds of billions of dollars of the Green New Deal subsidies, including ending wasteful credits like the EV tax credit," he added, referring to a Democratic measure included the climate law to provide incentives for electric vehicles that don't emit planet-warming greenhouse gases. Some moderate senators, such as Sen. John Curtis, R-Utah, were seeking to strip the new tax on wind and solar and make other other changes, but it was unclear whether those proposals would advance. If approved unchanged, the measure will kill investment in renewable energy and jeopardize hundreds of gigawatts of new power supply that would otherwise help the U.S. meet rapidly rising electricity demand as data centers, artificial intelligence and other growing uses strain the power grid, environmental advocates said. The GOP plan would "lock in higher household energy bills, kill American jobs ... and torch our future,'' said Mattea Mrkusic, who leads energy policy for the environmental group Evergreen Action. The bill would cut off climate law credits for projects that aren't "placed in service" -- that is, plugged into the grid -- by the end of 2028. That timeline is more aggressive than previous proposals and virtually impossible for most projects to meet, advocates said. The legislation also blocks credits for companies using components from adversaries such as China and adds a new tax on wind and solar projects that don't follow certain supply chain rules. Princeton University Professor Jesse D. Jenkins said he was surprised at the Senate bill's speed in ending wind and solar incentives and shocked at the proposed tax credit for metallurgical coal, a highly polluting form of coal that is used in steel-making and often exported to countries like India and Brazil. "This bill kills the industries of the future while subsidizing the industries of the 19th century. It's insanity!" Jenkins said in a post on social media. If passed as proposed, the bill lead to higher energy prices, fewer jobs, less investment in American energy production and less confidence in the American business environment, Jenkins said. Tom Pyle, president of the conservative American Energy Alliance, called the Senate bill a move in the right direction. "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," Pyle said, referring to the 2022 climate law. "Extending green giveaways on the backs of American taxpayers is shortsighted and neglectful," Pyle said. "It's time for Congress to deliver both energy reliability and the largest tax cut in history to President Trump and the American people." Jason Grumet, CEO of the American Clean Power Association, called the Senate bill a "midnight dumping" and said it would punish the fastest-growing sectors of the U.S. energy industry. "It is astounding that the Senate would intentionally raise prices on consumers rather than encouraging economic growth and addressing the affordability crisis facing American households," Grumet said. The bill would "strand hundreds of billions of dollars in current investments" and land hardest on rural communities that would benefit the most from clean energy investment, he said. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, called the bill "a direct attack on American energy, American workers and American consumers." "Make no mistake: If this bill passes, Americans will pay the price -- literally," Hopper said. "Power bills will rise. Factory jobs will vanish. Families will be forced to spend more just to keep the lights on and their homes cool. All while we become more dependent on foreign energy and more vulnerable to blackouts."

Senate GOP tax bill could crush wind and solar power, advocates say

WASHINGTON (AP) -- Clean energy advocates were already bracing for a Republican-led bill that would phase out tax credits for wind, solar and other renewable energy as President Donald Trump and GOP lawmakers moved to dismantle the 2022 climate law passed by Democrats under former President Joe Biden. But a proposal that emerged over the weekend was even more drastic than they thought. It was more aggressive in ending incentives for clean energy than a previous Senate version and would even impose new taxes on some wind and solar projects while boosting production of coal used in steelmaking. The Senate was moving Monday to approve Trump's big bill of tax breaks and spending cuts even as Democrats lined up to challenge it. The GOP plan is "a death sentence for America's wind and solar industries" that will lead to a spike in Americans' utility bills and jeopardize hundreds of renewable energy projects slated to boost the nation's electric grid, said Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee. "Their plan started out as a phase-down of the tax credits I wrote for wind and solar" in the 2022 climate law, Wyden said. "But now they're proposing an outright massacre with punishing new taxes on these industries that happen to be the cheapest and easiest ways to get new energy on the grid." Republicans said the tax-cut bill represents historic savings for taxpayers and supports production of traditional fossil-fuel energy sources such as oil, natural gas and coal, as well as nuclear power, increasing reliability. "To achieve this record level of savings, we are slashing Biden's Green New Deal spending and promoting America-First energy," Idaho Sen. Mike Crapo, chairman of the Senate Finance panel and a lead architect of the bill, said in a statement. "We stop penalizing fossil fuels in favor of unreliable and expensive green energy, and instead support consistent energy sources, making energy affordable again." Crapo said. The Senate bill eliminates "hundreds of billions of dollars of the Green New Deal subsidies, including ending wasteful credits like the EV tax credit," he added, referring to a Democratic measure included the climate law to provide incentives for electric vehicles that don't emit planet-warming greenhouse gases. Some moderate senators, such as Sen. John Curtis, R-Utah, were seeking to strip the new tax on wind and solar and make other other changes, but it was unclear whether those proposals would advance. If approved unchanged, the measure will kill investment in renewable energy and jeopardize hundreds of gigawatts of new power supply that would otherwise help the U.S. meet rapidly rising electricity demand as data centers, artificial intelligence and other growing uses strain the power grid, environmental advocates said. Advocates of green energy worry of a daunting future The GOP plan would "lock in higher household energy bills, kill American jobs ... and torch our future," said Mattea Mrkusic, who leads energy policy for the environmental group Evergreen Action. The bill would cut off climate law credits for projects that aren't "placed in service" -- that is, plugged into the grid -- by the end of 2028. That timeline is more aggressive than previous proposals and virtually impossible for most projects to meet, advocates said. The legislation also blocks credits for companies using components from adversaries such as China and adds a new tax on wind and solar projects that don't follow certain supply chain rules. Princeton University Professor Jesse D. Jenkins said he was surprised at the Senate bill's speed in ending wind and solar incentives and shocked at the proposed tax credit for metallurgical coal, a highly polluting form of coal that is used in steel-making and often exported to countries like India and Brazil. "This bill kills the industries of the future while subsidizing the industries of the 19th century. It's insanity!" Jenkins said in a post on social media. If passed as proposed, the bill lead to higher energy prices, fewer jobs, less investment in American energy production and less confidence in the American business environment, Jenkins said. A volley of responses comes in from both sides Tom Pyle, president of the conservative American Energy Alliance, called the Senate bill a move in the right direction. "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," Pyle said, referring to the 2022 climate law. "Extending green giveaways on the backs of American taxpayers is shortsighted and neglectful," Pyle said. "It's time for Congress to deliver both energy reliability and the largest tax cut in history to President Trump and the American people." Jason Grumet, CEO of the American Clean Power Association, called the Senate bill a "midnight dumping" and said it would punish the fastest-growing sectors of the U.S. energy industry. "It is astounding that the Senate would intentionally raise prices on consumers rather than encouraging economic growth and addressing the affordability crisis facing American households," Grumet said. The bill would "strand hundreds of billions of dollars in current investments" and land hardest on rural communities that would benefit the most from clean energy investment, he said. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, called the bill "a direct attack on American energy, American workers and American consumers." "Make no mistake: If this bill passes, Americans will pay the price -- literally," Hopper said. "Power bills will rise. Factory jobs will vanish. Families will be forced to spend more just to keep the lights on and their homes cool. All while we become more dependent on foreign energy and more vulnerable to blackouts."

Senate GOP Tax Bill Could Crush Wind and Solar Power, Advocates Say

WASHINGTON (AP) -- Clean energy advocates were already bracing for a Republican-led bill that would phase out tax credits for wind, solar and other renewable energy as President Donald Trump and GOP lawmakers moved to dismantle the 2022 climate law passed by Democrats under former President Joe Biden. But a proposal that emerged over the weekend was even more drastic than they thought. It was more aggressive in ending incentives for clean energy than a previous Senate version and would even impose new taxes on some wind and solar projects while boosting production of coal used in steelmaking. The Senate was moving Monday to approve Trump's big bill of tax breaks and spending cuts even as Democrats lined up to challenge it. The GOP plan is "a death sentence for America's wind and solar industries" that will lead to a spike in Americans' utility bills and jeopardize hundreds of renewable energy projects slated to boost the nation's electric grid, said Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee. "Their plan started out as a phase-down of the tax credits I wrote for wind and solar" in the 2022 climate law, Wyden said. "But now they're proposing an outright massacre with punishing new taxes on these industries that happen to be the cheapest and easiest ways to get new energy on the grid." Republicans say it will save people money Republicans said the tax-cut bill represents historic savings for taxpayers and supports production of traditional fossil-fuel energy sources such as oil, natural gas and coal, as well as nuclear power, increasing reliability. "To achieve this record level of savings, we are slashing Biden's Green New Deal spending and promoting America-First energy,'' Idaho Sen. Mike Crapo, chairman of the Senate Finance panel and a lead architect of the bill, said in a statement. "We stop penalizing fossil fuels in favor of unreliable and expensive green energy, and instead support consistent energy sources, making energy affordable again." Crapo said. The Senate bill eliminates "hundreds of billions of dollars of the Green New Deal subsidies, including ending wasteful credits like the EV tax credit," he added, referring to a Democratic measure included the climate law to provide incentives for electric vehicles that don't emit planet-warming greenhouse gases. Some moderate senators, such as Sen. John Curtis, R-Utah, were seeking to strip the new tax on wind and solar and make other other changes, but it was unclear whether those proposals would advance. If approved unchanged, the measure will kill investment in renewable energy and jeopardize hundreds of gigawatts of new power supply that would otherwise help the U.S. meet rapidly rising electricity demand as data centers, artificial intelligence and other growing uses strain the power grid, environmental advocates said. Advocates of green energy worry of a daunting future The GOP plan would "lock in higher household energy bills, kill American jobs ... and torch our future,'' said Mattea Mrkusic, who leads energy policy for the environmental group Evergreen Action. The bill would cut off climate law credits for projects that aren't "placed in service" -- that is, plugged into the grid -- by the end of 2028. That timeline is more aggressive than previous proposals and virtually impossible for most projects to meet, advocates said. The legislation also blocks credits for companies using components from adversaries such as China and adds a new tax on wind and solar projects that don't follow certain supply chain rules. Princeton University Professor Jesse D. Jenkins said he was surprised at the Senate bill's speed in ending wind and solar incentives and shocked at the proposed tax credit for metallurgical coal, a highly polluting form of coal that is used in steel-making and often exported to countries like India and Brazil. "This bill kills the industries of the future while subsidizing the industries of the 19th century. It's insanity!" Jenkins said in a post on social media. If passed as proposed, the bill lead to higher energy prices, fewer jobs, less investment in American energy production and less confidence in the American business environment, Jenkins said. A volley of responses comes in from both sides Tom Pyle, president of the conservative American Energy Alliance, called the Senate bill a move in the right direction. "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," Pyle said, referring to the 2022 climate law. "Extending green giveaways on the backs of American taxpayers is shortsighted and neglectful," Pyle said. "It's time for Congress to deliver both energy reliability and the largest tax cut in history to President Trump and the American people." Jason Grumet, CEO of the American Clean Power Association, called the Senate bill a "midnight dumping" and said it would punish the fastest-growing sectors of the U.S. energy industry. "It is astounding that the Senate would intentionally raise prices on consumers rather than encouraging economic growth and addressing the affordability crisis facing American households," Grumet said. The bill would "strand hundreds of billions of dollars in current investments" and land hardest on rural communities that would benefit the most from clean energy investment, he said. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, called the bill "a direct attack on American energy, American workers and American consumers." "Make no mistake: If this bill passes, Americans will pay the price -- literally," Hopper said. "Power bills will rise. Factory jobs will vanish. Families will be forced to spend more just to keep the lights on and their homes cool. All while we become more dependent on foreign energy and more vulnerable to blackouts." Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Senate Bill Hastens End of Wind, Solar Tax Credits and Imposes New Tax

A U.S. flag is draped at Union Station with the U.S. Capitol dome in the background on the day of a meeting of U.S. Senators, as Republican lawmakers struggle to pass U.S. President Donald Trump's sweeping spending and tax bill, on Capitol Hill in Washington, D.C., U.S., June 28, 2025. REUTERS/Ken Cedeno WASHINGTON (Reuters) -The latest version of the Senate's massive budget bill that the Senate is racing through for a vote as soon as Saturday deals a fatal blow to the use of tax credits in place since 2005 to spur more wind and solar energy and would set a new tax on those projects for the first time, renewable energy proponents said on Saturday. Despite hopes earlier in the week that the Senate would rework the budget megabill's language about the future use of Inflation Reduction Act tax credits to extend their use and make them more usable, the new version of the bill introduced by Senate leadership overnight will effectively repeal the incentives for solar and wind immediately. Instead, it imposes a new tax on wind and solar projects completed after Dec. 31, 2027 if they cannot prove they have not used any Chinese components, while offering a new tax break for coal production. It also accelerates the phase-out of clean energy manufacturing tax credits that have attracted billions in investments throughout the US, especially in Republican states. The clean energy industry and environmental groups decried the last-minute changes to the bill, saying that it will raise household energy costs and deprive the US of new, necessary and fast electricity capacity at a time of massive power demand amid a rush of construction of power-hungry data centers to power AI development. Trump's former advisor and head of DOGE Elon Musk blasted the bill on his social media platform X on Saturday, warning that the bill will "destroy millions of jobs in America" and cause "strategic harm." "It is utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future," he said. Energy security organization SAFE said in a statement that the bill, as written, would give an advantage to China, which dominates the clean energy and electric vehicle industries and is racing to outpace the US in AI development by taking away financing for energy storage, mineral processing and power projects. "Where the original Senate version was a recipe for energy stagnation, this is outright energy surrender -- all but guaranteeing Chinese dominance of critical minerals, industrial supply chains, and AI development," said Avery Ash, head of government affairs for SAFE. Green energy opponents praised the bill for ending support for renewable energy. Trump on Friday evening called for the end of the credits and said they no longer need support. "If, as supporters of the IRA are complaining, repealing these subsidies will 'kill' their industry, then maybe it shouldn't exist in the first place," said Tom Pyle, president of the American Energy Alliance. (Reporting by Valerie Volcovici; Editing by Chizu Nomiyama )

US Senate Bill's Clean Energy Cuts Draw Backlash From Labor, Business

WASHINGTON (Reuters) -The U.S. Senate's proposed cuts to clean energy subsidies in its version of President Donald Trump's tax and spending bill have drawn searing criticism from business and labor groups since they were unveiled over the weekend, with some arguing the moves will raise power prices and kill jobs. The pushback, which includes a swipe from Trump ally and Tesla CEO Elon Musk, comes as senators started voting on a potentially long list of amendments to the bill on Monday morning, giving renewable energy advocates on both sides of the political spectrum a last window to push for changes. "Taxing energy production is never good policy, whether oil & gas or, in this case, renewables," said Neil Bradley, policy director of the U.S. Chamber of Commerce, in a post on X over the weekend. "Electricity demand is set to see enormous growth & this tax will increase prices. It should be removed." "This would be incredibly destructive to America!" Musk posted on X, saying the cuts could endanger the development of energy-hungry artificial intelligence technology, among other things. Trump has said he intends to maximize U.S. energy production, with a focus on fossil fuels, in part to ensure the power industry can supply the AI industry's growth. But he has also promised to wipe out subsidies for renewables. The Senate bill would roll back incentives for wind, solar, batteries and other clean energy technologies created by President Joe Biden's 2022 Inflation Reduction Act, and add a new tax on these projects if they cannot prove their products are made without Chinese parts. Those provisions were harsher on the credits than the previous Senate version and even the House version. Sean McGarvey, president of the North America's Building Trades Unions (NABTU), which represents over 3 million construction workers, blasted the bill's impact on jobs. "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," he said in a statement, referring to an oil pipeline project blocked by Biden's administration. Republican Senator Thom Tillis of North Carolina, one of two Republicans who voted against advancing the bill, also blasted the bill on the Senate floor overnight and warned that it will cause power shortages by hamstringing renewable energy and battery storage. Tillis drew ire from Trump for voting against the motion to advance the bill and has since said he does not plan to run for re-election. "What you have done is create a blip in power service, because there isn't going to be a gas-fired generator anytime soon," he said on the floor. Tillis had worked as a consultant covering the utility industry and said the bill ignores the reality of the soaring demand for power by data centers. Brian Schatz, a Democratic Senator from Hawaii, also railed against the bill's impact. "This bill will increase prices. The 500-GW less energy in the next decade is pretty much exactly the amount we will need to meet rising demand," he said. "You don't have to love clean energy or be an environmentalist to understand that this is a basic question of supply and demand," he said. (Reporting by Valerie VolcoviciEditing by Marguerita Choy)

How Trump's 'big, beautiful bill' will make China great again

Can you hear it -- that loud roar coming from the East? It's the sound of 1.4 billion Chinese laughing at us. The Chinese simply can't believe their luck: that at the dawn of the electricity-guzzling era of artificial intelligence, the U.S. president and his party have decided to engage in one of the greatest acts of strategic self-harm imaginable. They have passed a giant bill that, among other craziness, deliberately undermines America's ability to generate electricity through renewables -- solar, battery and wind power in particular. And why? Because they view those as "liberal" energy sources, even though today they are the quickest and cheapest ways to boost our electricity grid to meet the explosion of demand from AI data centers. It is exactly the opposite of what China is doing. Indeed, Beijing may have to make July 4 its own national holiday going forward: American Electricity Dependence Day.You cannot make this up: Even Saudi Arabia is doubling down on solar power to meet the needs of the A.I. data centers it wants to recruit from the West, while Trump's "big, beautiful bill" actually does just the opposite. It quickly phases out tax credits enjoyed by utility-scale solar and wind -- as well as electric vehicle tax credits. This virtually guarantees that China will own the future of solar energy, wind power, and electric cars and trucks, as well as autonomous vehicles. Thankfully, Trump and friends did keep until 2036 a major Biden-era tax credit for companies that build other emissions-free technologies such as nuclear reactors, hydroelectric dams, geothermal plants and battery storage. The problem is that it can take up to 10 years to build a nuclear plant in America, and, as The New York Times reported, the bill added "complex restrictions" to the battery credits "that bar recipients from having ties to 'prohibited foreign entities' like China.'' As a result, "some worry that the restrictions are so complicated that the credits could end up being unusable for many projects." In sum, this dog's breakfast of a bill -- rushed through without a single congressional hearing with independent energy experts or even one scientist -- is sure to put at risk billions of dollars of investments in renewable energy, mostly in Republican states, and potentially kill the jobs of tens of thousands of U.S. workers. By the way, the bill also bans for 10 years a first-ever fee on excess methane emissions from oil and gas production, a key driver of global warming. So, in one fell swoop, this bill will make your home hotter, your air conditioning bill higher, your clean energy job scarcer, America's auto industry weaker and China happier. How does that make sense? It doesn't. And the person in America who knows that best is actually Elon Musk. It is really sad to me that Musk -- who is without question one of America's greatest manufacturing innovators, having started globally leading companies making electric vehicles, renewable rockets, battery storage and telecommunications satellites -- has discredited himself with so many voters because of his dalliance with Trump and because of his Department of Government Efficiency's capricious cuts to the government workforce. Because of that, many will not understand the vital truth that Musk has been shouting to his fellow Americans: Trump's bill is "utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future." This is not complicated and this is what China knows: There has never been a more intimate connection than there is now between a nation's ability to generate huge amounts of electricity at affordable prices (and in the cleanest way possible) and its ability to develop AI engines that consume huge amounts of electricity as they learn and generate answers that could give us the tools we need to cure diseases, discover new materials and even produce the holy grail of cheap, clean, climate-saving fusion energy. To put it differently, there has never been a more intimate connection between the amount of cheap, clean electricity a nation can generate for AI models and its future economic and military might. That is why Musk and many others find it so "insane and destructive" that Trump and his GOP cult have rejected an energy policy of "all of the above as clean as possible as fast as possible" -- oil, natural gas, coal, wind, hydro, nuclear, solar, geothermal, hydrogen -- that is always working to phase out the dirtiest for the cleanest, the way China often has. Instead, Trump has chosen instead to kneecap America's renewable energy industry the way China has not. The president has even called clean energy tax credits a "scam," saying he'd rather spend the money anywhere else. This is industrial-scale foolishness. I was struck by a quote from an energy expert in The Wall Street Journal the other day. "The big-picture outlook for energy is we are going to be less competitive because of this law," said Nick Nigro of Atlas Public Policy. "Ten years from now, we could look back on this moment as the time in which the U.S. pulled back and essentially lost the transition to clean energy." Alas, truth be told, Democratic Party progressives helped to make Trump and his party this foolish on energy with their own crazy fantasies. Too many of them behaved as if we could go cold turkey from a fossil fuel economy to a clean and green one, without scaling cleaner fuels to bridge the transition, such as natural gas and nuclear, and without loosening permitting standards for more transmission lines to get clean power from the middle of the desert to the cities where it is needed. Few Americans understand how far ahead of us China already is in this realm and moving further ahead, and faster, every day. Consider this snapshot: In 2000 China produced just over 1,300 terawatt hours of electricity while the U.S. produced nearly 3,800 (a terawatt is equal to 1 million megawatts). Fast forward to today, China produces over 10,000 terawatt hours while the U.S., since 2000, has added only 500 -- an increase of only 13% in 2 1/2 decades. Much of China's electricity growth originally came from expanded coal-fired generation, but in recent years, it has been driven by expanding hydro, solar, wind and battery sources, which are easier, cheaper and quicker to build and also help the climate. As a recent article from Shanghai in the Financial Times put it: "China is on its way to becoming the world's first 'electrostate,' with a growing share of its energy coming from electricity and an economy increasingly driven by clean technologies. It offers China a strategic buffer from trade decoupling and rising geopolitical tensions with the U.S." As for Trump's goal of making America globally energy dominant during his term of office, his bill just made that impossible. There is no path to energy dominance in the next five years without renewables. Let's say you want to generate additional electricity for more data centers just through natural gas today. Even if you have an abundance of gas, as America does, you need more giant turbines to convert the gas to electricity. If you ask the major manufacturers of those turbines -- GE Vernova, Siemens Energy and Mitsubishi Power -- they will probably tell you that they will be very happy to deliver you one, but you will be lucky to have it installed by 2030. That is how long their backlogs are. And there is no telling what that turbine will cost with all of Trump's new steel and aluminum tariffs. By contrast, you can build and put online a new solar farm with battery storage in Texas in just 18 months. "During the past quarter, Texas took the lead in clean power installations, adding an impressive 2,596 MW of new utility-scale solar, wind and storage capacity," reads an October research report from Texas A&M, referring to megawatts of power. "This milestone marks the first time Texas has surpassed California to become the top solar state in the nation.'" A Texas energy expert, Doug Lewin, posted last week that the Texas grid, known as ERCOT, recently reported that the state had added 10,000 megawatts of power in just the last year -- most of it from supercheap solar power with battery storage, so energy can be distributed at night when the sun is not shining. As a result, Texas has seen a drop in brownouts on its grid because of more renewables combined with bigger storage batteries. Texas can still deploy solar-plus-batteries in the future, but now the electricity will cost consumers a lot more, thanks to the Trump bill. If that higher monthly electricity bill bothers you, call Energy Secretary Chris Wright. He assuredly knows better, but like every other sycophant in Trump's Cabinet, he seems to have just told the boss what he wanted to hear. As Wright must know, solar energy plus storage batteries made up 81% of the new electricity capacity added in the U.S. in 2024, according to the U.S. Energy Information Administration. Now Trump's idiotic bill will slash that amount. The result for Americans? The research firm Energy Innovation, whose peer-reviewed energy modeling is widely respected, projects that Trump's effort to diminish America's renewable energy industry will cause wholesale electric power prices to increase roughly 50% by 2035, and that cumulative annual consumer energy costs will increase more than $16 billion by 2030. It also projects that about 830,000 renewable energy jobs will be lost or not created by 2030. For all of these reasons, I am certain there are only two political parties in the world today cheering the passage of this bill: Trump's Republican Party and the Chinese Communist Party -- because nothing is more destined to make China great again than Trump's "big, beautiful, America surrenders the future of electricity to Beijing" bill. This article originally appeared in The New York Times.

Republican senators seek to change Senate bill clean energy tax, improve tax credits

WASHINGTON (Reuters) -Republican Senator Joni Ernst has introduced an amendment to the U.S. Senate's tax and spending megabill that would change two of the most contentious parts of that bill and could give a small boost to wind and solar projects that had been targeted in the draft being debated on the Senate floor. The amendment introduced by Ernst, and supported by fellow Iowa Senator Chuck Grassley and Alaska Senator Lisa Murkowski would remove the proposed new tax on wind and solar projects that start after 2027 and make the credits available based on projects' construction start date instead of when they enter service. The amendment will be introduced on the Senate floor during Monday's "vote-a-rama" - a marathon of votes on amendments to President Donald Trump's tax and spending bill that drew searing criticism from business and labor groups since they were unveiled over the weekend, with some arguing the moves could lead to power shortages, raise power prices and kill jobs. Ernst and Grassley represent Iowa, which receives more than 60% of its electricity from wind power. Other Republican senators may also back the amendment. The pushback to the Senate bill, which includes a swipe from Trump ally and Tesla CEO Elon Musk, comes as senators started voting on a potentially long list of amendments to the bill on Monday morning, giving renewable energy advocates on both sides of the political spectrum a last window to push for changes. "Taxing energy production is never good policy, whether oil & gas or, in this case, renewables," said Neil Bradley, policy director of the U.S. Chamber of Commerce, in a post on X over the weekend. "Electricity demand is set to see enormous growth & this tax will increase prices. It should be removed." "This would be incredibly destructive to America!" Musk posted on X, saying the cuts could endanger the development of energy-hungry artificial intelligence technology, among other things. Trump has said he intends to maximize U.S. energy production, with a focus on fossil fuels, in part to ensure the power industry can supply the AI industry's growth. But he has also promised to wipe out subsidies for renewables. The Senate bill would roll back incentives for wind, solar, batteries and other clean energy technologies created by President Joe Biden's 2022 Inflation Reduction Act, and add a new tax on these projects if they cannot prove their products are made without Chinese parts. Those provisions were harsher on the credits than the previous Senate version and even the House version. Energy Secretary Chris Wright on Monday morning seemed to brush off warnings about the loss of generation capacity amid soaring demand. "The more we load our grid with intermittent generation, the worse the grid performs during times of maximum demand," he posted on the social media platform. "The One Big Beautiful Bill will help end wasteful subsidies and deliver more reliable energy for the American people!" In Texas, however, grid operator ERCOT said at its Board of Directors meeting last week that the state of the grid is strong and "ready for the challenges of extreme weather" this summer because of the new generation that has come online, and cited new large-scale solar energy and battery storage. JOB LOSSES, HIGHER BILLS Sean McGarvey, president of the North America's Building Trades Unions (NABTU), which represents over 3 million construction workers, blasted the bill's impact on jobs. "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," he said in a statement, referring to an oil pipeline project blocked by Biden's administration. Republican Senator Thom Tillis of North Carolina, one of two Republicans who voted against advancing the bill, also blasted the bill on the Senate floor overnight and warned that it will cause power shortages by hamstringing renewable energy and battery storage. Tillis drew ire from Trump for voting against the motion to advance the bill and has since said he does not plan to run for re-election. "What you have done is create a blip in power service, because there isn't going to be a gas-fired generator anytime soon," he said on the floor. Tillis had worked as a consultant covering the utility industry and said the bill ignores the reality of the soaring demand for power by data centers. Brian Schatz, a Democratic Senator from Hawaii, also railed against the bill's impact. "This bill will increase prices. The 500 GW less energy in the next decade is pretty much exactly the amount we will need to meet rising demand," he said. "You don't have to love clean energy or be an environmentalist to understand that this is a basic question of supply and demand," he said. (Reporting by Valerie VolcoviciEditing by Marguerita Choy)

Clean-energy backers blast US budget bill as a setback

WASHINGTON (Reuters) -Advocates of clean energy on Thursday decried the final passage of President Donald Trump's tax cut bill by the House of Representatives as a reversal of course on the energy transition, while fossil-fuel interests rejoiced. Trump's fellow Republicans in the House passed the bill 218-214 and it now heads to the president's desk. Trump is expected to sign it on Friday. The legislation sharply cuts access to a 30% tax credit for solar and wind power projects that had been set to run until 2032 and which developers had relied on. Research firm Energy Innovation projected that the bill would result in a fall of 300 gigawatts of U.S. electricity capacity, as demand soars for the first time in two decades, driven by growth in data centers and artificial intelligence. Meanwhile, demand for power from data centers is estimated at upward of 100 GW, according to nonprofit group American Clean Power. The bill's passage "is a dramatic swing in federal policy, disrupting the good-faith investments of American companies that are powering our economy and creating hundreds of thousands of jobs," said Jason Grumet, ACP's president. Jefferies global investment bank said in a research note to clients that the phaseout of the wind and solar subsidies will lead to a "medium-term rush" to claim credits, which could speed the roll-out of projects for a couple of years. After that period, investors will need to reassess such projects without them. It said nuclear and geothermal power, energy sources that the Trump administration favors for dependable electricity generation, received better access to credits in the legislation. Battery storage projects will also retain the full tax credit through 2033 and phase out fully by 2036. The "longer runway" for those baseload resources to use the tax credits won praise from the Data Center Coalition, whose members include Amazon and Microsoft. Mike Sommers, the president and CEO of the American Petroleum Institute, the top oil and gas lobbying organization, said Congress had advanced Trump's "energy dominance agenda" of maximizing oil and gas output. Production of oil and gas had already hit a record during the administration of former President Joe Biden. "We applaud Congress for unleashing our nation's oil and natural gas resources, and we look forward to President Trump signing this bill into law," Sommers said in a release. COAL GETS A BREAK Some tax credits favored by the oil industry, like those for hydrogen and carbon capture, were preserved in the bill. The bill also mandates sales of oil and gas drilling rights in federal lands and in waters off Alaska and the Gulf of Mexico, which Trump has renamed the Gulf of America. It allows coal used in steel making a new production tax break of 2.5% of costs that could be worth hundreds of millions of dollars for the industry. It also reduced royalty rates that coal companies have to pay when mining on public lands. Rich Nolan, the president and CEO of the National Mining Association lobbying group, said the bill supports "today's mining industry which stands ready to create additional jobs and revenues for our economy." Daniel Francis, a director with Generate Capital, said the focus for wind and solar industries will shift to states and communities. "Ultimately the impact of the bill will be to move decisions down the federal chain from Congress to states, counties and cities," he said. "Because economies run on power, because voters care about their power bills, and there is no alternative." (Reporting by Timothy Gardner and Valerie Volcovici in Washington; Additional reporting by Lisa Baertlein in Los Angeles; Editing by Matthew Lewis)

Senate bill hastens end of wind, solar tax credits and imposes new tax

WASHINGTON (Reuters) -The latest version of the Senate's massive budget bill that the Senate is racing through for a vote as soon as Saturday deals a fatal blow to the use of tax credits in place since 2005 to spur more wind and solar energy and would set a new tax on those projects for the first time, renewable energy proponents said on Saturday. Despite hopes earlier in the week that the Senate would rework the budget megabill's language about the future use of Inflation Reduction Act tax credits to extend their use and make them more usable, the new version of the bill introduced by Senate leadership overnight will effectively repeal the incentives for solar and wind immediately. Instead, it imposes a new tax on wind and solar projects completed after Dec. 31, 2027 if they cannot prove they have not used any Chinese components, while offering a new tax break for coal production. It also accelerates the phase-out of clean energy manufacturing tax credits that have attracted billions in investments throughout the US, especially in Republican states. The clean energy industry and environmental groups decried the last-minute changes to the bill, saying that it will raise household energy costs and deprive the US of new, necessary and fast electricity capacity at a time of massive power demand amid a rush of construction of power-hungry data centers to power AI development. Trump's former advisor and head of DOGE Elon Musk blasted the bill on his social media platform X on Saturday, warning that the bill will "destroy millions of jobs in America" and cause "strategic harm." "It is utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future," he said. Energy security organization SAFE said in a statement that the bill, as written, would give an advantage to China, which dominates the clean energy and electric vehicle industries and is racing to outpace the US in AI development by taking away financing for energy storage, mineral processing and power projects. "Where the original Senate version was a recipe for energy stagnation, this is outright energy surrender--all but guaranteeing Chinese dominance of critical minerals, industrial supply chains, and AI development," said Avery Ash, head of government affairs for SAFE. Green energy opponents praised the bill for ending support for renewable energy. Trump on Friday evening called for the end of the credits and said they no longer need support. "If, as supporters of the IRA are complaining, repealing these subsidies will 'kill' their industry, then maybe it shouldn't exist in the first place," said Tom Pyle, president of the American Energy Alliance. (Reporting by Valerie Volcovici; Editing by Chizu Nomiyama )

Despite last-minute changes, US Senate bill deals big blow to renewable energy

WASHINGTON (Reuters) -The U.S. Senate's massive budget bill that passed on Tuesday will make it harder to develop wind and solar energy projects, despite the removal of some contentious provisions, industry advocates and lawmakers said. The Senate dropped a proposed excise tax on solar and wind energy projects that don't meet strict standards after last-minute negotiations with key Republican senators seeking better terms for renewables. Iowa Senator Joni Ernst, fellow Iowa Senator Chuck Grassley and Alaska Senator Lisa Murkowski, whose votes were crucial to the bill's passage, had introduced an amendment calling for removal of that tax, which caught lawmakers by surprise after it made it into the last draft text. Many Republican states host large renewable energy industries. The Senate also changed language about which solar and wind projects can use the 2022 Inflation Reduction Act's tax credits. In the Senate's final version, projects will be able to use the lucrative credits if they begin construction before 2026. A previous version was based on when the projects enter service. But overall, the Senate bill will make it too challenging to move forward with many new wind and solar energy projects, likely depriving the United States of added electricity capacity at a time of soaring energy demand, critics said. That could mean higher consumer bills and lost jobs around the country at project sites dependent on the credits. "Senate Republicans just voted to trigger the largest spike in utility bills in American history," said Lena Moffitt, executive director at climate advocacy group Evergreen Action. Research firm C2ES estimated that the United States will lose 2.3 million jobs as a result of the bill. Another research firm, Energy Innovation, projected that the bill would result in a fall of 300 GW of electricity capacity at a time of soaring demand due to data center and AI growth. Business and labor groups earlier this week had blasted the bill's phaseout of tax credits. The Senate bill effectively phases out renewable energy tax credits after 2026 if projects haven't started construction. Otherwise, wind and solar projects whose construction starts after that must be placed in service by the end of 2027. Community solar project developers warned that the bill would stop in their tracks thousands of projects already under development. "This bill will strand thousands of energy projects under development, jeopardize billions of dollars in private investment, and kill hundreds of thousands of good-paying American jobs -- from electricians to contractors to local landowners and farmers who rely on these projects for stability," said Jeff Cramer, president of the Coalition for Community Solar Access. Meanwhile, the bill included a new tax credit for coal used in steel making that had been typically available only for critical minerals used in weapons making and green energy. Opponents said that could lead to hundreds of millions of dollars in subsidies for an industry that has suffered in recent years. Heather Reams, president of conservative clean energy group Citizens for Responsible Energy Solutions, praised the bill for preserving tax credits to boost hydrogen, nuclear energy, geothermal and hydropower, as well as carbon capture technologies. But she urged House lawmakers to try to make the wind and solar tax credits more useable. "As this bill moves back to the House, we encourage members to maintain their support for these critical tax provisions, which bolster domestic energy generation to secure true American energy dominance," she said. (Reporting by Valerie Volcovici; Additional reporting by Timothy Gardner; Editing by Cynthia Osterman and Mark Porter)