


Senate Republicans’ move to step up attacks on the wind and solar industries in the latest version of the mega tax and policy bill has shocked clean energy groups and fossil fuel advocates alike, as many warn a new tax on renewables could send energy bills soaring in the coming years.
The tax provision was quietly added to the more than 900-page revised ‘One Big, Beautiful Bill’ Act released close to midnight on Friday, targeting projects utilizing materials from China.
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The excise tax would only be imposed on wind and solar projects – regardless if they claimed federal subsidies or not – marking the strongest push as of late from Republicans in Congress to hit the renewable energy industries.
It would apply to wind and solar projects completed after 2027 that fail to meet complicated restrictions on using components from China, which currently dominates global supply chains for critical components like batteries, turbines, critical minerals and more.
The tax would be based on how much foreign materials used exceeds set limits and calculated then as a percentage of the total cost of all manufactured components used in the project. The penalty rate would be around 30% for wind projects and 50% of solar.
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While supporters of the provision say it would incentivize domestic production of all components for wind and solar projects, many warn that it could actually do more harm as other sources of energy continue to fall far behind renewables in how quickly it takes to deploy.
Critics of federal subsided renewable energy projects have often pointed to sources like natural gas as the main and fully domestic alternative to wind and solar. While widely considered to be more reliable than intermittent renewables, the lead time for new natural gas facilities is considerably much longer than that of wind and solar.
In recent months, natural gas project developers have been warned they may have to wait as long as seven years to receive a gas turbine — a critical component of any new gas-fired power plant. Meanwhile, installations for wind and solar projects can take as little as less than one year.
Sen. Thom Tillis (R-NC), who announced his retirement over the weekend after opposing the Republican megabill, pointed to this on the Senate floor yesterday.
The Republican Senator criticized his party’s move to accelerate attacks on wind and solar projects, noting that the renewable energy sources are critical for meeting growing power demand from data centers.
“What you have done is you have created a blip in power service because there isn’t going to be a natural gas power generator any time soon,” he said.
Other notable Republicans, including U.S. Chamber of Commerce Chief Policy Office Neil Bradley and energy pro-fossil fuel lobbyist Alex Epstein, who supported cutting green subsidies, have agreed that the tax provision goes a step too far.
“Overall, the Senate has produced a strong, pro-growth bill. That said, taxing energy production is never good policy, whether oil & gas or, in this case, renewables,” Bradley wrote in a post to X. “Electricity demand is set to see enormous growth & this tax will increase prices. It should be removed.”
Texas-based energy expert Doug Lewin also took to X to urge for the Senate text to be amended, indicating that more deployment of renewables can actually benefit the oil and gas industries.
“Y’all, this doesn’t have to be a zero sum game. Texas exports more gas than we burn in power plants TODAY. That gap could widen; oil & gas profits would go up,” Lewin wrote. “THAT’S ENERGY DOMINANCE. This whole gas versus renewables cage match some people want to create is incredibly stupid.”
Clean energy experts warned over the weekend that the new tax provision would impact many solar and wind companies, even those that have already begun to untangle their supply chains from foreign nations like China.
Industry groups estimate that the new tax provision would increase taxes on clean energy businesses by as much as $7 billion by 2036.
Frank Macchiarola, chief advocacy officer of American Clean Power, told the Washington Examiner that if kept in, the provision could dramatically slash the deployment of wind and solar by upwards of 300 gigawatts — a decrease that could be detrimental as energy demand from artificial intelligence and data centers continues to rise.
“We could be looking at an increase of up to 10% in electricity bills as a result of this legislation,” Macchiarola said.
Analysts with the Rhodium Group have also estimated that the tax would increase costs for wind and solar projects by upwards of 20%, costs that would likely trickle down to consumers.
“$450 billion in lost capital investment. These are significant, significant numbers, and again, at the absolute worst possible time,” Macchiarola added. “We’re going to need every single resource that we can find in this country to be able to meet the growing demand that’s driven by the data center increase as a result of AI.”
Other clean energy advocacy groups, including the Environmental Defense Fund and Community Solar Access, have warned that the combination of the tax and other provisions in the bill targeting the wind and solar industries will result in thousands of job losses, major investment cuts, and grid reliability issues.
The revised One Big Beautiful Bill Act makes it harder for wind and solar projects to receive federal subsidies, slashing existing tax credits for projects that are not “placed in service” by the end of 2027.
On Monday, the Senate began a so-called vote-a-rama on the massive tax and policy legislation, with Democrats expected to introduce dozens of changes and amendments.
Clean energy advocates are hopeful members of the left side of the aisle will introduce an amendment doing away with the solar and wind tax provision, particularly as some say it breaks with the bill’s overall purpose to lower taxes.
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“The whole purpose of the reconciliation bill is to provide tax relief for the American people, and so this provision stands out, really, as something that’s caught in direct conflict with the objectives of this bill,” Macchiarola told the Washington Examiner.
“We’re facing significant increases in electricity demand up to about potentially 50% over the next 15 years, where we’ve seen 25 years of flat electricity demand in this country. We now see a different picture, and at the worst possible time, Congress proposes to increase taxes on those who are developing U.S. clean energy projects that are going to help bring electricity to the grid,” he added.