The fate of hundreds of billions’ worth of clean energy tax credits is among the last unresolved big-ticket items Republicans are hashing out before a series of planned committee markups on their big budget bill.
The Agriculture, Energy and Commerce, and Ways and Means committees are hoping to advance their versions of the party-line tax and spending package next week. Language could begin trickling out as soon as this weekend.
But negotiators say haggling is still happening on what to do with renewable energy incentives and other credits from the 2022 climate law.
“I’ve heard from people in Ways and Means there is a lot of disagreement in the room,” said Rep. Andrew Garbarino (R-N.Y.), who has been helping lead the charge to protect at least some of the credits. “It’s one of the things that’s the most contentious in the room.”
Seeking to influence the deliberations, Garbarino and Rep. Jen Kiggans (R-Va.) introduced the “Certainty for Our Energy Future Act.” It would phase out solar and wind incentives, disqualify companies tied to foreign adversaries, and continue the practice used by banks and other third parties known as “transferability.”
“By responsibly phasing out subsidies for technologies like wind and solar, and ensuring foreign adversaries like China and Russia can’t exploit American tax benefits, we are safeguarding both our energy independence and our taxpayers,” Kiggans said in a press release.
Republican Reps. Dan Newhouse of Washington, David Valadao of California and Mark Amodei of Nevada also signed onto the legislation.
“The goal was to find a place that people could live with,” said a Kiggans aide granted anonymity to speak about internal deliberations.
The aide said the lawmakers sought input from trade associations like the Edison Electric Institute and the American Clean Power Association, and both support the bill.
Kiggans and Garbarino have been among a group of 20 or so members publicly calling for GOP leaders to preserve some Inflation Reduction Act provisions. They are up against hard-liners who want to see deep spending cuts and who have called for full repeal of what President Donald Trump likes to call the “Green New Scam.”
The issue appears to remain unsettled. Ways and Means Chair Jason Smith (R-Mo.) was planning to head to the White House on Friday to meet with the president, according to POLITICO.
More letters, more demands
The pro-IRA members have become increasingly specific in their requests. Two letters sent to Smith on Thursday — one led by Rep. Mariannette Miller-Meeks (R-Iowa) and another by Rep. Juan Ciscomani (R-Ariz.) — called for protecting the Clean Electricity Investment Tax Credit (48E), the Clean Electricity Production Tax Credit (45Y) and the Advanced Manufacturing Production Tax Credit (45X).
“We respectfully urge the Committee to maintain Section 45X in its current form,” the Ciscomani letter reads. “This policy exemplifies effective tax legislation — targeted, impactful, and aligned with our national interests. By continuing this successful program, we reinforce the America First agenda and help secure American manufacturing leadership for generations to come.”
Republican Rep. Julie Fedorchak and Sen. Kevin Cramer — both former North Dakota state regulators — are lobbying to phase out wind and solar investment and production credits in favor of technologies like nuclear, carbon capture for fossil fuels and geothermal.
“With these very generous production tax credits, it’s hard for investors to put their money anywhere else,” Fedorchak said of wind and solar subsidies.
“So I think it’s time to phase them out. They are not developmental technologies anymore. They are market proven. They are widely available on the grid. … I think they worked. Seventeen percent of the grid’s resources are wind and solar.”
A Fedorchak bill released last month would phase out credits for wind and solar over the next five years. It would also get rid of transferability, which allows project sponsors to transfer their credits to a third party to reduce their tax burden.
A major question is how far Republicans go in defending their views on energy incentives by threatening to tank the whole megabill effort. Many are more fired up about state and local tax deductions.
“I’m much more passionate about SALT; it is a hill I’m willing to stake my entire congressional career on,” said Rep. Nick LaLota (R-N.Y.). Asked whether that applied to clean energy incentives, too, he said, “No.”
“I’m interested in them; I don’t think we should throw out the entire IRA,” LaLota said. “There are provisions in it which I think are good for the country, are good for my constituents. But I am all in on SALT.”
Energy and Commerce
The Energy and Commerce Committee has similarly been consumed by another issue that has divided Republicans: Medicaid.
While committee members have been sparring over potential cuts to the safety net program, debates over the panel’s energy and climate portfolio have continued.
Rep. Jay Obernolte (R-Calif.), who sits on the Commerce, Manufacturing and Trade Subcommittee, said E&C’s energy-related plans have been “an equal focus” of internal conversations, even if less public.
“Every time we meet, we go over the energy portion of the title,” he said. “There have been really substantive discussions on all that.”
Environment Subcommittee Vice Chair Dan Crenshaw (R-Texas) called the climate and energy portions “some of the easier parts” of their proposal. He said Republicans have developed “a long list” of ideas.
Committee leaders have discussed rolling back EPA’s tailpipe emissions rule, which Republicans say is a de facto electric vehicle mandate. They believe that could generate more than $100 billion in savings by reducing demand for EV tax credits. But those could be eliminated.
Members have also mentioned wanting to undo a federal fuel efficiency regulation, potentially pulling back up to $10 billion in Department of Energy grants and loans, and revoking EPA climate and environmental justice grants. It remains unclear whether any of those ideas will make it into the committee’s proposal.
“You can’t pick and choose what you like and what you don’t like,” said Rep. Brian Fitzpatrick (R-Pa.), a member of the Ways and Means Committee who has advocated for clean energy policies. “You can fight for it in advance, but eventually the product that’s on the floor: Is it good or bad for your constituents?”
