As Senate Republicans scramble to pass President Trump’s far-reaching domestic policy bill, climate activists and energy companies are lobbying to salvage tax credits for wind, solar and other climate-friendly technologies.
But they are running into formidable obstacles. Conservative activists, fossil-fuel lobbyists and Mr. Trump are demanding that lawmakers enact even deeper cuts to clean-energy subsidies, or even scrap them entirely.
At stake are hundreds of billions of dollars’ worth of tax incentives put in place by the Biden administration, the vast majority of which are flowing to Republican congressional districts.
Some are aimed at encouraging Americans to buy electric vehicles or put solar panels on their roofs. Others are intended to spur manufacturing of wind turbines, solar-panel components and other technologies that would help reduce planet-warming greenhouse gases. All the tax credits were greatly expanded as part of the Inflation Reduction Act of 2022, the Biden administration’s signature climate law.
“What is being proposed now will hurt businesses, and it will risk significant job loss,” said Lisa Jacobson, president of the Business Council for Sustainable Energy, a trade group. Her organization was one of several on Capitol Hill this week mounting a last-ditch effort to remind lawmakers of the jobs the law had created and what states stood to lose.
An initial draft of the Senate bill would phase out the tax credits for wind and solar power and electric vehicles starting next year, while incentives for nuclear and geothermal power would stay in place for another decade. The draft would also impose new restrictions on domestic manufacturers that rely on components from China.
On the campaign trail last year, Mr. Trump promised to eliminate clean-energy incentives. Faced with uncertainty, companies have so far canceled $15.5 billion in proposed factories and clean-energy projects this year, according to an analysis by E2, a nonpartisan group of business leaders and investors.
In May alone, according to the analysis, roughly $1.4 billion in electric-vehicle, battery and solar-panel factories were abandoned, overwhelmingly in Republican districts.
“In the zeal to undo the accomplishments of the prior party, American communities are collaterally damaged,” said Jason Grumet, chief executive of the American Clean Power Association, a trade group that is fighting to slow the phaseout of tax credits for renewable power.
The voices in favor of deep cuts to the subsidies have been just as tireless.
Alex Epstein, an author and founder of a think tank that argues fossil fuels are crucial for human prosperity, is one of the most influential figures calling for the permanent elimination of all clean-energy subsidies by 2028. Mr. Epstein says that the benefits of coal, oil and gas outweigh the negative effects of climate change. He has described wind and solar subsidies as “immensely harmful” to the nation’s power grid and “a cancer we have to get rid of.”
In a recent interview on Mr. Epstein’s podcast, Representative Chip Roy, Republican of Texas, said wind and solar jobs made the United States “weaker” and likened subsidies that create such employment to the drug trade. Mr. Epstein agreed, calling them “fentanyl jobs.”
On Tuesday Mr. Epstein acknowledged that his think tank, the Center for Industrial Progress, was funded by the fossil fuel industry, though he said it also took money from other industries. A separate group that Mr. Epstein formed, Energy Freedom Fund, also recently registered to lobby on fossil fuel issues, he said in an interview.
Mr. Epstein said that if renewable energy subsidies were not fully eliminated before the end of Mr. Trump’s term in office, it would be too easy for a future administration to revive them.
Currently, the Senate bill would allow companies to claim a tax credit worth at least 30 percent of project costs if they started construction of a new wind or solar farm this year and a smaller credit if they began construction before the end of 2027. After that, a tax break would no longer be available.
Mr. Epstein has criticized that language, pointing out that a company could begin work on a wind or solar farm this year but not actually complete it until the 2030s and still claim a tax break. He has lobbied senators to change the language so that the wind or solar farm would have to be fully “in service” by 2028 to claim a tax break.
Renewable-energy developers say that change would be disruptive and unworkable, as projects often face delays in obtaining government permits or other obstacles beyond a company’s control.
Mr. Epstein, once a relative outsider in Washington, these days is promoting his views at Republican gatherings on the Hill, including a recent Senate G.O.P. luncheon. “You deserve enormous praise for being engaged in this and being a voice that helped us enormously,” Mr. Roy, who serves as the policy director for the hard-right House Freedom Caucus, told Mr. Epstein on the podcast.
The American Energy Alliance, an oil and gas advocacy group, also announced a six-figure advertising campaign this week to influence lawmakers in Utah, Alaska, Idaho and the District of Columbia. The digital ads accuse Republican lawmakers like Senator John Curtis of Utah and Senator Lisa Murkowski of Alaska, who are fighting to protect tax credits that have led to job and manufacturing growth in their states, of protecting “costly and unnecessary” aid.
Those efforts got a boost on Sunday when Mr. Trump wrote that green tax credits are “a giant SCAM” and should be eliminated from the package, referring to “Windmills, and the rest of this ‘JUNK.’” He also wrote that “None of it works without massive government subsidy (energy should NOT NEED SUBSIDY!).”
It is not clear whether Mr. Trump was also calling for the elimination of subsidies for nuclear and geothermal power, two sources of emissions-free energy favored by his energy secretary, Chris Wright. Fossil fuels such as oil and gas have also benefited from their own specialized tax breaks for decades, though those breaks are not as significant as renewable energy subsidies.
The current draft of the Senate bill would preserve the Biden-era tax credits for sources of power that can run at all hours — such as nuclear reactors, geothermal plants, hydroelectric dams and industrial-scale batteries — through 2036. It would also expand tax breaks for biofuels and would subsidize companies that capture carbon dioxide from smokestacks and use it to extract oil from underground.
The White House did not respond for a request for comment.
Senate leaders hope to hold a vote on their version of the domestic tax package in the coming days and aim to get it to Mr. Trump’s desk by July 4. On Tuesday, Mr. Trump told lawmakers they should stay in session until it passed. “NO ONE GOES ON VACATION UNTIL IT’S DONE,” he wrote on his social network, Truth Social.
Senators will also need to hash out their differences with House Republicans, who passed a bill last month that restricts the clean-energy tax credits even further. Under the House version, companies building wind, solar, geothermal or battery-storage plants could get a tax break only if they start construction within 60 days after the bill becomes law and finish the project by the end of 2028. New nuclear plants could receive the credit as long as they start construction before the end of 2028.
Late on Tuesday, key Republican senators said they were still hashing out disagreements. “It’s fair to say we still have not found a resolution today,” said Mr. Curtis. He said much of the debate had centered on requirements that projects be placed in service by the end of 2028 to claim the credits, as Mr. Epstein has urged.
Mr. Curtis, a moderate who founded the Conservative Climate Caucus in 2021 when he served in the House, said he had a “thoughtful” discussion Tuesday morning with Mr. Epstein, whom he plans to meet with again on Wednesday. “I don’t think we’re aligned, but that doesn’t mean we haven’t had effective conversations,” he said.
Separately, when asked about the ads by the American Energy Alliance criticizing him and others, Mr. Curtis said, “Who?” He went on to say that the ads had had “zero impact” in Utah.
Senator John Hoeven, Republican of North Dakota, said there was broad agreement among Republicans about phasing out tax credits for wind and solar energy, which he called “mature industries” that no longer needed government support. But he said Senate Republicans were still haggling over how to treat energy projects that had already started construction and that made sense economically only with the credits in place.
“The one piece that we’re still working on is, for somebody who’s started their project, how do we make sure they’re fairly treated so they can complete and get the credit without extending it in a way that, you know, costs a lot more money?” Mr. Hoeven told reporters Tuesday.
After the Inflation Reduction Act passed in 2022, many Democrats said the law would be safe from repeal because it was disproportionately spurring investments in Republican-led states and congressional districts. Now, however, some Democrats are waiting to see whether any parts of law will remain intact.
Mr. Grumet of the clean-energy lobby was doubtful. “We’re way past that,” he said. But he said he held out hope that the Senate might go slower in phasing out federal support. “The expectation is that Congress will land the plane, not crash the plane,” he said.
Lisa Friedman is a Times reporter who writes about how governments are addressing climate change and the effects of those policies on communities.
Maxine Joselow is a Times reporter who covers climate change and the environment, with a focus on U.S. climate policy and politics.
Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming.
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