A U.S. Senate panel has proposed ending federal tax credits for solar and wind energy by 2028 while extending incentives for nuclear, hydropower, and geothermal projects through 2036. The move, part of a Republican-backed budget bill aligned with President Donald Trump’s energy policy, revises provisions from the 2022 Inflation Reduction Act (IRA).
According to the draft from Senate Finance Chair Mike Crapo, solar and wind tax credits would begin phasing down in 2026—cut to 60%—and be eliminated by 2028. This marks a shift from current law, which delays the phase-out until 2032. In contrast, hydropower, nuclear, and geothermal facilities will retain full credit eligibility until 2033, with reductions beginning thereafter.
Industry leaders expressed mixed reactions. The National Hydropower Association praised the extension but criticized the exclusion of credits for facility upgrades. Abigail Ross Hopper of the Solar Energy Industries Association warned the bill jeopardizes a major U.S. economic success story. Shares of solar companies fell after the announcement.
The Senate version offers more flexibility than the House’s "One Big, Beautiful Bill Act," allowing projects to qualify for credits based on construction start dates, not completion deadlines. It also maintains the ability for developers to transfer tax credits—important for financing—unlike the House version.
However, the bill retains restrictions on clean energy projects involving Chinese materials. While some limits are eased for public companies, developers must now comply with new formulas assessing "material assistance" from foreign adversaries.
Consumer tax credits for rooftop solar panels and home energy upgrades are removed, a change criticized by clean energy advocates. Despite improvements, the bill could still impact over 75 gigawatts of planned renewable energy projects, industry experts warned.