US Senate passes bill to cut clean energy tax credits by 2026
Author: PPD Team Date: 04/07/2025
In a tight 51–50 vote, the US Senate has passed the One Big Beautiful Bill, with Vice President JD Vance casting the tie-breaking vote. The bill brings major shifts to the country’s renewable energy policy.
The most significant change is an accelerated phase-out of tax credits for wind and solar projects. To qualify for production and investment tax credits, construction must begin before June 2026. Projects must be operational by the end of 2027.
Tax credits for clean vehicles will also end sooner than expected. Purchases of new or used clean vehicles, including clean commercial vehicles, will lose eligibility after September 30, 2025. Credits for installing electric vehicle (EV) charging stations at homes or businesses will expire on June 30, 2026.
The bill also tightens rules around foreign involvement. Projects using components from or owned by entities deemed foreign threats will no longer qualify for tax credits.
Clean hydrogen gets a reprieve. Facilities that begin construction before January 1, 2028, can still claim credits under Section 45V. These projects are not subject to the foreign entity restriction, for now.
The bill has sparked pushback. Some call it a short-sighted move that weakens the clean energy transition. Others argue it is a necessary correction to protect domestic supply chains and taxpayer funds.