Republican budget bill dismantles climate law passed by Democrats
[July 02, 2025]
By MATTHEW DALY
WASHINGTON (AP) — The sprawling Republican budget bill approved by the
Senate Tuesday removes a proposed tax on solar and wind energy projects
but quickly phases out tax credits for wind, solar and other renewable
energy.
The Senate approved the bill 51-50 as President Donald Trump and GOP
lawmakers move to dismantle the 2022 climate law passed by Democrats
under former President Joe Biden. Vice President JD Vance broke a tie
after three Republican senators voted no.
The bill now moves to the House for final legislative approval.
The excise tax on solar and wind generation projects was added to the
Senate bill over the weekend, prompting bipartisan pushback from
lawmakers as well as clean energy developers and advocates.
The final bill removes the tax but mostly sticks with legislative
language released late Friday night and would end incentives for clean
energy sooner than a draft version unveiled two weeks ago.
Some warn of spike in utility bills
Democrats and environmental groups said the GOP plan would crush growth
in the wind and solar industry and lead to a spike in Americans’ utility
bills. The measure jeopardizes hundreds of renewable energy projects
slated to boost the nation’s electric grid, they said.
“Despite limited improvements, this legislation undermines the very
foundation of America’s manufacturing comeback and global energy
leadership,” said Abigail Ross Hopper, president and CEO of the Solar
Energy Industries Association. If the bill becomes law, “families will
face higher electric bills, factories will shut down, Americans will
lose their jobs, and our electric grid will grow weaker,'' she said.
The American Petroleum Institute, the top lobbying group for the oil and
gas industry, applauded the bill's passage.
“This historic legislation will help usher in a new era of energy
dominance by unlocking opportunities for investment, opening lease sales
and expanding access to oil and natural gas development,'' said Mike
Sommers, the group's president and CEO.
While Democrats complained that the bill would make it harder to get
renewable energy to the electric grid, Republicans said the measure
represents historic savings for taxpayers and supports production of
traditional energy sources such as oil, natural gas and coal, as well as
nuclear power, increasing reliability.
In a compromise approved overnight, the bill allows wind and solar
projects that begin construction within a year of the law's enactment to
get a full tax credit without a deadline for when the projects are
“placed in service,'' or plugged into the grid. Wind and solar projects
that begin later must be placed in service by the end of 2027 to get a
credit.
The bill retains incentives for technologies such as advanced nuclear,
geothermal and hydropower through 2032.
Bill ‘could have been worse,’ Murkowski says
Changes to the renewable energy language — including removal of the
excise tax on wind and solar — were negotiated by a group of Republican
senators, including Alaska Sen. Lisa Murkowski and Iowa Sens. Joni Ernst
and Chuck Grassley. Iowa is a top producer of wind power, while
Murkowski is a longtime supporter of renewable energy as crucial for
achieving energy independence, particularly for isolated rural
communities in Alaska.
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A Block Island Wind Farm turbine operates, Dec. 7, 2023, off the
coast of Block Island, R.I., during a tour organized by Orsted. (AP
Photo/Julia Nikhinson, File)
Murkowski, who voted in favor of the final bill, called her
decision-making process “agonizing.”
Changes that push back the timeline for terminating wind and solar
credits mean that “a good number” of Alaska projects would still
qualify, she said. “Again, it’s not all we wanted. It could have
been worse,” she told reporters Tuesday.
Murkowski praised provisions calling for more oil lease sales in the
Arctic National Wildlife Refuge and other areas in Alaska and
increased revenue sharing.
Rhode Island Sen. Sheldon Whitehouse, the top Democrat on the Senate
Environment and Public Works Committee, called the bill a “massively
destructive piece of legislation” that “increases costs for everyone
by walloping the health care system, making families go hungry and
sending utility bills through the roof.”
The bill “saddles our children and grandchildren with trillions and
trillions of dollars in debt — all to serve giant corporations,
fossil fuel polluters and billionaire Republican megadonors who are
already among the richest people on the planet,” Whitehouse said.
EV credits eliminated
Wyoming Sen. John Barrasso, the No. 2 Senate Republican, hailed the
bill for rescinding many elements of what he called the Biden
administration’s “green new scam,” including electric vehicle tax
credits that have allowed car owners to lower the purchase price of
EVs by $7,500. The bill also blocks for 10 years a first-ever fee on
excess methane emissions from oil and gas production. Industry
groups fiercely opposed the methane fee, which was authorized by
Democrats in the 2022 climate law but never implemented. The GOP
bill also increases oil and gas leases on public lands and revives
coal leasing in Wyoming and other states.
“Today, the Senate moved President Trump’s agenda forward,'' said
West Virginia Sen. Shelley Moore Capito, a Republican who chairs the
Senate environment committee.
Clean energy advocates were deeply disappointed by the bill, which
they argue undoes much of the climate law before it fully takes
effect.
“By eliminating a number of clean energy incentives and slashing
others, this bill represents a significant step backward for
America’s energy future,” said Nathaniel Keohane, president of the
Center for Climate and Energy Solutions, a nonprofit that seeks to
accelerate the global transition to net-zero greenhouse gas
emissions.
“Curtailing incentives for electricity generated from wind and solar
power is particularly shortsighted'' and will raise energy prices
for households and businesses and threaten reliability of the
electric grid, Keohane said.
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Associated Press writers Alexa St. John in Detroit and Becky Bohrer
in Juneau, Alaska contributed to this story.
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