The so-called “Big, Beautiful Bill” will, if passed, make sweeping changes to the US’ clean energy market. While some of the worst provisions affecting the industry were stripped out during Senate proceedings earlier this week, it’s still pretty bad. In fact, the current language of the bill might as well be a middle figure to the domestic solar manufacturing industry.
As it stands, the bill guts many of the clean energy programs of Joe Biden’s signature 2022 Inflation Reduction Act. That includes killing off incentives for domestic and utility-scale solar power as well as the Clean Electricity Production Credit. Even worse, the bill axes the Domestic Content bonus that incentivized the use of US-made gear.
There were a number of provisions that did not survive its journey through the Senate, like the excise tax on renewable energy. As CBS News reported, the levy would have imposed an additional charge on projects that used materials from foreign countries. As CNN explained, this would have cut renewable energy projects in favor of extending the life of coal and gas turbine plants.
Rob Gardner is Vice President of Congressional and Regulatory Affairs for SEMA, the Solar Energy Manufacturers for America coalition. He walked me through the bill, explaining the effects of the changes for the US solar industry. “A positive is that it maintains production tax credits for manufacturers of clean energy components,” he said.
One tweak from an earlier version of the bill was the speed at which the existing tax credits would be withdrawn. As it stands, projects that are already approved will qualify for the present regime, as will any project beginning construction before June 2026. “Basically, a year after enactment [companies have] to begin construction on utility-scale solar projects to receive the full amount of the credit,” said Gardner. And, according to § 70512 (4)(a) those plants will need to be “placed in service” no later than December 31, 2027.
The bigger issue, however, is that the bill creates “uncertainty for long-term demand for US products,” according to Gardner. Put simply, American-made solar panels are more expensive than their Chinese counterparts due to higher manufacturing costs. By removing the incentives, including the Domestic Content bonus, the US is opening the door for Chinese-made alternatives. Gardner added “after the tax credits that incentivize domestic production and consumption expire, you will see a flood of Chinese product [in the market.]”
The US’s Environmental Information Administration projects that the US’ total domestic energy consumption will grow by almost two percent in the next year. A slowdown in new energy additions is the last thing the US needs, especially as renewables made up almost 90 percent of all new power generation capacity in 2024. But it’s likely that even with all of the changes in the bill, solar will remain the biggest technology used to implement new power generation capacity.
Abigail Ross Hopper, CEO of the Solar Energy Industries Association pulls no punches in her statement. She said the bill “undermines the very foundation of America’s manufacturing comeback.” Hopper added that “families will face higher electric bills, factories will shut down, Americans will lose their jobs and our electric grid will grow weaker.”
Jason Grumet, CEO of the American Clean Power Association described the bill as a “step backward” for American energy policy and an “intentional effort” to undermine “one of the fastest-growing sources of electric power.”
Environmental groups also believe the bill’s passing marks a dark day in the world’s fight against climate change. Greenpeace USA Deputy Climate Program Director John Noël, said in a statement that “this is a vote that will live in infamy” for its role in “doling out fossil fuel industry handouts.”
Environmental Defense Fund’s Vice President for Political and Government Affairs Joanna Slaney agreed. She said that the bill is “effectively cutting off supply of cheap energy right when the US needs it most.” In contrast, the bill offers a “10-year reprieve from paying a fee on wasteful methane pollution,” a gas significantly more harmful than carbon dioxide to the environment.
Research by clean energy company Cleanview suggests the bill may jeopardize up to 600GW of new renewable energy capacity. This is because of the tight deadlines the bill imposes to qualify for the existing credits, which again, need to begin construction before June 2026. That 600GW figure includes solar farms and battery storage projects in California and Texas that would need to be rushed to get working.
This article originally appeared on Engadget at https://www.engadget.com/general/trumps-big-beautiful-bill-is-a-middle-finger-to-us-solar-energy-152042835.html?src=rss
