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Tax bill passed by House Republicans would gut Biden-era clean energy tax credits

[May 23, 2025] By MATTHEW DALY, ALEXA ST. JOHN and MATTHEW BROWN

WASHINGTON (AP) — The multitrillion-dollar tax breaks package passed by House Republicans early Thursday would gut clean energy tax credits that Democrats approved three years ago while supporting increased mining, drilling and other traditional energy production.

A marathon session that began Wednesday resulted in 1,100-plus page legislation that curbs billions of dollars in spending across food assistance, student loans, Medicaid and action to address climate change.

The bill, which now heads to the Senate, repeals or phases out more quickly clean energy tax credits passed in the 2022 Inflation Reduction Act during former President Joe Biden's term. Biden’s climate law has been considered monumental for the clean energy transition, but the House bill effectively renders moot much of the law's incentives for renewable energy such as wind and solar power.

Clean energy advocates said the bill walks back the largest government investment in clean energy in history.

“In a bid to cut taxes for billionaires and provide a grab bag of goodies to Big Oil, the majority in the House took a sledgehammer to clean energy tax credits and to the protection of our public lands," said Christy Goldfuss, executive director of the Natural Resources Defense Council.

“These credits are delivering billions of dollars in new investments in homegrown American energy -- creating jobs, lowering energy costs and addressing the climate crisis that is fueling floods, fires and heat waves,'' Goldfuss said.

President Donald Trump celebrated the bill’s passage, calling it “arguably the most significant piece of Legislation that will ever be signed in the History of our Country.” Trump appealed to the Senate to pass the measure as soon as possible and send it to his desk.

The Senate hopes to wrap up its version by early July. At least four Republican senators, led by Lisa Murkowski of Alaska, have urged continuation of energy tax credits, including support for traditional and renewable energy sources. Republican-led states and Congressional districts have benefited from billions of dollars in clean energy manufacturing investments spurred by the Biden-era subsidies.

Full-scale repeal of current credits "could lead to significant disruptions for the American people and weaken our position as a global energy leader,'' the senators said in a letter to Senate Majority Leader John Thune, R-S.D.

"A wholesale repeal, or the termination of certain individual credits, would create uncertainty, jeopardizing ... job creation in the energy sector and across our broader economy,” the senators wrote in the April 9 letter. The letter was also signed by GOP Sens. John Curtis of Utah, Thom Tillis of North Carolina and Jerry Moran of Kansas.

In a win for House moderates and some Western lawmakers, the House bill strips language that would have allowed the sale of hundreds of thousands acres of public lands in Utah and Nevada. Opponents argued the sales would have opened the door for more oil and gas drilling.

What was gutted in the bill

The House bill takes an axe to tax credits for rooftop solar installments and eliminates electric vehicle tax credits after 2025, with a one-year exception for EVs manufactured by automakers that have sold fewer than 200,000 cars that qualified for the credit.

Credits for solar and electric vehicles, which reduce harmful emissions, help to boost demand for the technologies and drive down their cost.

House Republicans also tightened tax credit restrictions for projects associated with foreign entities, including China — an added blow to domestic clean energy expansion since China dominates much of the supply chain.

The bill slashes a three-year phase-down schedule previously proposed, and instead cuts off projects that don’t start construction within 60 days of the bill’s passage. Those projects would also have to start operating before 2029.

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Pumpjacks operate in a pasture, Sept. 30, 2024, near Hays, Kan. (AP Photo/Charlie Riedel, File)

“This bill threatens the clean energy industry at a time when it’s proving to be not only economically beneficial — lowering costs, creating jobs and fueling local economies — but also essential to America’s energy future," said Andrew Reagan, president of Clean Energy for America, an industry group.

The American Petroleum Institute, which represents the oil and gas industry, applauded the bill as a step to “restore American energy dominance.”

“By preserving competitive tax policies, opening lease sales” for oil and gas drilling and advancing permitting reforms, the legislation “is a win for our nation’s energy future,” API President Mike Sommers said in a statement.

No sale of public lands

At the behest of Montana Rep. Ryan Zinke and some other Republicans, lawmakers stripped a provision that would have sold or transferred about 460,000 acres (186,155 hectares) of federal land in Nevada and Utah to local governments or private entities.

The proposal exposed sharp divisions between Western Republicans who say the federal government controls too much of their states and others such as Zinke, a former Interior secretary in Trump’s first term whose state is protective of access to lands for hunting and recreation.

“At the heart of the matter is that public land that’s in the federal estate belongs to everybody,” Zinke told The Associated Press Thursday. “To suggest that you’re going to sell land to pay off the debt, I think that’s misguided and, quite frankly, disingenuous."

The land sales had been inserted in the bill following a late-night committee vote, despite earlier pledges from Republican leaders that the sales were off the table.

Supporters said they would generate revenue and ease growth pressures by creating room for more and cheaper housing in booming Western cities such as Las Vegas, Reno, Nevada, and St. George, Utah. Those communities are hemmed in by federal property, which makes up 80% of the land in Nevada and 63% in Utah.

A spokesperson for Nevada Republican Rep. Mark Amodei, who sponsored the bid to sell federal lands in his state, said his office was “exploring all options” to make the transfers happen.

Housing advocates had cautioned federal land is not universally suitable for affordable housing, and some of the parcels to be sold were far from developed areas.

Tracy Stone-Manning, president of the Wilderness Society and a former director of the Bureau of Land Management under Biden, said she appreciated Zinke’s work to prevent the public lands sale.

But she said the bill was still a “big giveaway” to the private sector. “By opening hundreds of millions of acres to drilling, mining and logging to pay for tax cuts for the wealthy, this bill harms the tens of millions of people who like to hike, recreate or find solace in the outdoors,” she said.

Trump targets Biden's climate policy

At the same time the bill slashes support for clean energy, it paves the way for oil, gas and coal.

Through the bill, natural gas pipeline developers can pay a $10 million fee for expedited permitting, and applicants for a potential liquefied natural gas export site can pay a $1 million fee to be deemed in the “public interest,” circumventing what is usually a regulatory challenge.

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St. John reported from Detroit and Brown reported from Billings, Montana.

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