A month after the House passed a version of the settlement bill, Senate Republicans released their views on the budget bill Monday night.
The Senate Treasury Committee’s language takes the sledgehammer into part of the Renewable-Friendly Inflation Reduction Act (IRA) to restrain others.
Solar, wind and hydrogen are the brunt of impact. On the other side of the ledger, geothermal, nuclear, hydroelectric power, and long-term energy storage appear relatively unharmed. The carbon capture has now come somewhere in the middle.
Senate Republicans are moving quickly to end the solar tax credits for residents, signing to charge people for them just 180 days after the bill is signed. Solar leasing companies will become unqualified for any credit and knock another foot out of the way under the solar market for homes.
Commercial wind and solar incentives are less generous than those under the IRA, which was expanded until 2032, but we see a longer timeline, but projects that begin within six months of the bill’s signature will be available for full credit. Then, if you start construction in 2026 you will receive 60% of your credits and 20% if you do so in 2027. The tax credit will then disappear.
The hydrogen tax credit ends this year and matches the version given to the house. The move adds yet another hurdle to hydrogen startups that have been buffeted by a ever-changing policy over the years.
Details will change, but carbon capture has been avoided. The main 45Q tax credits currently distinguish between the use of captured carbon, using businesses to receive less money, for example. The Senate GOP language abolishes distinctions and targets all carbon capture projects under the same incentive.
Other technologies such as nuclear, geothermal and hydroelectric power will receive a slight extension of the phasing out of tax credits. Currently, projects that begin construction in 2033 will receive full credits one year longer than the IRA. It then began phased out, falling to 75% of the tax credit in 2034, and to 50% in 2035 in 2035, and disappearing in 2036.
This move follows the priorities of wind and solar kneeling GOPs, while maintaining nuclear and geothermal energy. A lifeline of long-term energy storage is perhaps the most surprising addition, and indirectly can boost the wind and sun by making the settlement process more attractive as a 24/7 source, if unharmed.
However, this is not the last word. The bill cannot be signed directly by President Donald Trump. First, you need to pass the senator before heading home. When I head home, the deadline is set for July 4th.
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