MUCH CAN STILL BE SAVED

Senate committees have started to share their contributions to the larger budget reconciliation package—and if anyone’s generating a lot of buzz, it’s the Finance Committee.

In their draft text released earlier this week, the committee proposed changes that would increase the debt ceiling by an additional $1 trillion despite even steeper cuts to Medicaid than the House budget bill.

Needless to say, it’s already drawn criticism—but it’s a little better for clean energy than we were expecting.

Here’s what the committee proposed:

  • Longer phaseout timelines for the clean energy production and investment tax creditswith some energy sources treated more generously than others. The credits for geothermal, energy storage, nuclear, and hydropower projects are fully preserved through 2033. Meanwhile, wind and solar projects are eligible for the full value of the credit if they start this year, 60% if they start in 2026, and 20% if they start in 2027. This is a huge change from the House’s budget bill—which would have limited eligibility to projects that started construction within 60 days of the bill’s passage—but still a mixed bag.
  • 180-day phaseout periods for consumer tax credits. A number of consumer tax credits, including the consumer EV tax credit, residential clean energy tax credits, and home energy efficiency credits, will remain in place for 180 days after the passage of the bill. Some exceptions are the $7,500 EV tax credit, which would be terminated immediately, and a credit for energy-efficient homebuilding, which would be extended for 12 months after the bill’s passage.
  • Transferability. The draft text includes a provision to preserve the Inflation Reduction Act’s transferability provisions for as long as the tax credits are in place. This is a win—transferability has made clean energy project financing much simpler by allowing developers and manufacturers to sell their credits to other companies, helping to mobilize $500 billion in private capital.

Of course, these are just proposals for now—and the process is far from over.

In order for the budget bill to make it to President Trump’s desk, the Senate needs to do more than get enough in-house support for their bill—they have to pass a bill the House is on board with. If the two chambers can come to an agreement, the Senate can use a vote-a-rama to incorporate those negotiations in the form of a “wraparound” amendment. If they can’t, they risk months of back and forth between the chambers.

How much change we’ll see in the meantime is anyone’s guess.

And make no mistake—this is still a terrible bill. It undercuts the cheapest, most easily scalable energy sources (solar and wind). If passed, it will eliminate the driving forces behind the U.S. manufacturing renaissance, jeopardize our economy and clean energy future, and raise energy costs for everyone while making the ultra-wealthy even richer.

In the coming weeks, let’s do everything we can to support the improved provisions while fighting for a better deal for solar, wind, and other incentives on the chopping block!