Senate Republicans’ plans to slash clean energy tax credits differ significantly from the proposed cuts in the One Big Beautiful Bill Act passed by the House last month. 

Key provisions of the Senate’s version of the bill, intended to advance President Donald Trump’s tax and spending agenda, were released by the Senate Finance Committee on Monday. 

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While Republicans in the upper chamber aligned with those in the House on targeting green subsidies created or expanded by the 2022 Inflation Reduction Act, members of the Senate have opted to take a more lenient approach. 

Small wins for wind, solar, and baseload clean power

Similar to the House-passed legislation, the Senate’s legislative bill would repeal tax credits for renewables such as wind and solar. The cuts, though, don’t go as far. 

The House version would end “technology-neutral” tax credits, which apply to any zero-emissions electricity generation, for all clean energy projects, except nuclear, unless they can start construction within 60 days of the bill’s enactment and are placed in service by the end of 2028. It would also deny subsidies for expenditures for certain wind and solar leasing arrangements. 

While the Senate version also moves to end these credits, it provides a slower phase-out for the Clean Electricity Production Credit and the Clean Electricity Investment Credit. This phase-out begins in 2026 and ends by 2028.

Energy sources such as hydropower, nuclear, and geothermal would see even more relief under the Senate proposal, as credits would be available as late as 2035. 

These projects are given more time, and the Senate removed the language ordering the projects to be placed in service by 2028. Instead, they only need to have begun construction. 

Transferability 

Under the House-passed bill, Republicans looked to end a policy that allowed companies to sell tax credits to a third party. This process is known as “transferability.” 

House Republicans aimed only to allow nuclear energy projects to use this process as an exception. 

Senate Republicans have resurrected the policy, allowing it to be used for all eligible clean energy projects.

Critical minerals

One tax credit at risk in both bills is the advanced manufacturing production credit, which is meant to benefit producers of components for solar panels, wind turbines, batteries, and critical minerals. 

The House proposal would terminate the credit for all qualified products, including critical minerals, at the end of 2031. 

However, the Senate has moved to give the critical minerals industry some relief by extending the credit’s phase-out starting that same year. Under their proposal, producers could claim 75% of the credit in 2031, 50% in 2031, and 25% in 2033 before it is phased out the following year. 

Tax breaks for fossil fuels

Senate Republicans have also moved to include a tax break for oil and gas producers that was not detailed in the House-passed bill. 

According to Bloomberg, the provision appears to stem from legislation proposed by Sen. James Lankford (R-OK). It would allow oil and gas companies subject to a 15% corporate alternative minimum tax to deduct some drilling costs when reporting their taxable income. 

The outlet estimated that this could result in a tax break worth more than $1 billion for companies like ConocoPhillips. 

Hitting electric vehicles 

The Senate’s proposed bill also offers some relief for future electric vehicle owners, stripping the House-passed proposal to impose a fee on newly registered EVs.

House Republicans aimed to charge a $250 fee for every EV and $100 for every hybrid vehicle upon registration.

While some Republicans had pressured leadership to include even higher fees in the Senate bill, the upper chamber omitted the provision entirely. Sen. Bernie Moreno (R-OH) told E&E News that it was left out over concerns that it would be too difficult to implement. 

EVs weren’t entirely spared, though, as the Senate bill also limits a number of EV-related tax credits. This includes terminating the Clean Vehicle Tax Credit, set to expire in 2032. While the House aimed to end this credit by the end of this year, the Senate package proposes ending the credit 180 days after the legislation is signed into law. 

Plus … a plug for public land sales 

The Senate Energy and Natural Resources Committee, led by Sen. Mike Lee (R-UT), also released its section of the upper chamber’s proposed reconciliation package, which includes a controversial provision that has split conservatives. 

The committee text orders the departments of Interior and Agriculture to sell some federal lands managed by the Bureau of Land Management. 

Alaska, Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming would be eligible for land sales. The provision would require the Bureau of Land Management and the Forest Service to sell a minimum of 0.5% and a maximum of 0.75% of their estates for housing development, which could result in more than 3 million acres of federal land being up for sale. 

The Committee on Natural Resources had proposed a similar provision for the House bill. However, it was dropped after pushback from key Republicans such as Montana Rep. Ryan Zinke.

Not the final text 

The text of the Senate’s bill has yet to be marked up and voted on before being sent back to the House for a final vote. 

Several members have already indicated that the text provided by the Finance Committee is subject to change as some Republicans look to soften the tax credit cuts and others aim to eliminate the subsidies. 

“They have been clear that this is not their final product, and there is an opportunity to influence it,” freshman Sen. John Curtis (R-UT) told Politico of the committee. 

HOW THE SENATE GOP TAX BILL DIFFERS FROM THE HOUSE BILL

As Republicans continue to debate over details, Senate Majority Leader John Thune (R-SD) wants to get the bill on the president’s desk by July 4. He aims to put it to a vote in the Senate sometime next week.