The giant policy bill muscled through Congress by Republicans is poised to remake American energy by slashing tax breaks for wind and solar power and electric cars while maintaining some federal support for sources like nuclear reactors and geothermal plants.
The legislation, which carries President Trump’s domestic policy agenda, provides a boost to fossil fuels and dismantles many of the biggest actions the federal government has ever taken to fight climate change, even as scientists warn that rising temperatures are creating acute dangers from extreme heat, deadly wildfires, crop failures and floods.
Yet there is still uncertainty about how changes from the bill will play out.
Solar farms could still get built even without federal subsidies, though they could be more expensive and more likely to use components made in China than in the United States. Other industries that get favorable treatment, like technology that captures carbon dioxide, could nevertheless struggle.
Here’s a rundown of the energy winners and losers in the bill, which was finalized by the House on Thursday and awaits Mr. Trump’s signature.
Loser: Wind and solar power
The bill would quickly phase out tax credits for wind and solar power, two of the fastest growing sources of electricity in the United States. Both industries could shrink but are unlikely to vanish, experts said.
Previously, companies building wind and solar farms could qualify for a tax credit worth at least 30 percent of costs if they began construction before 2034. Under the new law, projects would likely need to start construction within the next year — roughly by July 2026 — to have the best chance of getting the full credit. After that, the subsidy becomes harder to get and swiftly expires.
Developers are now racing to stockpile panels and equipment so they can beat that deadline. But hundreds of planned projects could get canceled or become pricier. All told, the amount of wind and solar capacity expected to come online by 2035 could fall by half, some analysts predict.
Still, in places like the breezy Great Plains or sunny Southwest, building wind and solar farms will remain one of the easiest ways to squeeze more electrons onto the grid, even without subsidies. Electricity demand is surging, and there is a multiyear backlog for new natural gas turbines. So utilities and tech companies may keep buying renewable energy, albeit at higher costs.
“We’ll continue to build out renewables, but we’ll build out a lot slower,” said David Carroll, chief renewables officer for ENGIE North America, a major power plant developer. The changes, he added, “are ultimately going to hurt consumers, because it’s going to raise prices.”
The renewable industry did prevail on Senate Republicans like John Curtis of Utah and Lisa Murkowski of Alaska to make a few last-minute changes. A contentious tax on future wind and solar projects got stripped from the bill. And solar leasing companies, which have made rooftop systems widely accessible, are no longer barred from tax credits, as they were in an earlier draft.
At the same time, the Trump administration has hindered renewable energy in other ways, such as halting federal approvals for wind farms. On Thursday, Representative Ralph Norman, Republican of South Carolina, who had withheld his support for the bill because it didn’t immediately cease tax credits for wind and solar, said Mr. Trump had promised to address his concerns through executive action. That assurance led him to vote for the bill, he said.
Possible winners: Nuclear, geothermal, batteries
While Republicans slashed support for wind and solar, they preserved until 2036 a major Biden-era tax credit for companies that build other emissions-free power technologies like nuclear reactors, hydroelectric dams, geothermal plants and battery storage. These sources can run at all hours, unlike wind and solar.
Mr. Trump has a longstanding animus for wind turbines and solar panels, which he calls “ugly” and inefficient. Chris Wright, the energy secretary, supports more nuclear power in addition to championing fossil fuels.
Experts say that new nuclear and geothermal plants could help tackle climate change, because they don’t generate greenhouse gases that warm the planet. But they will take time to develop and face challenges in scaling up, including high costs.
The tax credit could also still be claimed by anyone adding large batteries to the grid, something that companies are increasingly doing in California and Texas to back up wind and solar plants and prevent power outages.
Yet China currently dominates supply chains for batteries and Congress added complex restrictions to the credits that bar recipients from having ties to “prohibited foreign entities” like China. The Treasury Department would need to clarify those rules, and some worry that the restrictions are so complicated that the credits could end up being unusable for many projects.
“There’s a ton of uncertainty around these new rules,” said Advait Arun, a senior associate for energy finance at the Center for Public Enterprise, a nonprofit organization. “It’s premature to call this bill a victory” for nuclear and geothermal power, he said.
Loser: Electric cars
The bill is likely to put a major dent in the U.S. electric car market by repealing federal incentives that have been critical to its growth.
Tax credits worth up to $7,500 to buy new or used electric cars will end by Sept. 30, 2025 under the new bill. (Those credits were previously available until 2032.) Also expiring is a loophole that allowed companies to pass tax savings on to people who leased vehicles. Incentives for businesses to buy electric trucks will vanish.
Electric cars won’t disappear from dealerships, but they will get pricier. At the same time, the Trump administration is rolling back federal fuel-efficiency rules and has sought to block a California plan intended to force automakers to sell more zero-emissions vehicles.
Those factors together could mean tens of millions fewer electric cars sold over the next decade than previously expected, according to the Rhodium Group, a research firm.
That could leave the United States falling behind China and Europe, where electric vehicles are spreading rapidly. At the same time, some auto executives believe electric vehicles will eventually displace gasoline-powered cars and say they will keep investing in the technology.
“We are in a global competition with China, and it’s not just E.V.s,” Jim Farley, the chief executive of Ford, said recently at the Aspen Ideas Festival. “And if we lose this we do not have a future at Ford.”
Winner: Biofuels
Some technologies got a boost in the bill. A tax credit for so-called “clean fuels” like ethanol was extended for another two years, through the end of 2029. The bill also makes it easier for biofuels made from crops like corn to qualify, by easing emissions rules.
Critics of this provision have argued that while some biofuels could be useful for limiting climate change, such as certain sustainable aviation fuels, the current tax credit often subsidizes fuels that do little to cut planet-warming emissions. Yet the credit is popular with Republicans who represent farm states like Iowa and Nebraska.
Loser: U.S. factories
When Democrats in 2022 created and expanded a slew of federal tax breaks for electric vehicles, solar panels, wind turbines, batteries, they designed them to encourage companies to use components made in the United States. That spurred a manufacturing boom, including solar-panel glass recyclers in Georgia and electric-vehicle assembly lines in Kentucky.
The new law could derail many of those factories.
The old tax credit for solar power, for instance, offered developers a bonus if they used domestic panels. With that credit expiring by 2027, some companies looking to install solar may now prefer to use cheaper components from China, a manufacturing powerhouse.
“This bill will lead to a flood of Chinese imports, hurting U.S. manufacturing jobs and investments,” said Mike Carr, the executive director of the Solar Energy Manufacturers for America, a trade group.
The electric vehicle tax credit was likewise available only for domestically made vehicles. At least 24 U.S. factories had been set up to produce electric cars that qualify, including a General Motors battery plant in Ohio, according to Atlas Public Policy, a research firm. Axing the credit could reduce demand for U.S.-made vehicles, batteries and key minerals like lithium.
The policy bill “took a sledgehammer to the domestic E.V. and battery supply chain that will be felt in communities around the country, particularly in the Battery Belt, the Southwest, and the industrial Midwest,” said Albert Gore III, executive director of the Zero Emission Transportation Association, a trade group for electric vehicle manufacturers. The Battery Belt refers to southeastern states where manufacturing has become concentrated.
Possible winner: Hydrogen
Senate Republicans made a last-minute tweak that partially salvaged a lucrative tax credit for companies that make clean hydrogen fuels. The credit will now be available through the end of 2027 instead of being phased out this year, as House Republicans had proposed. (Previously, it was expected to last until 2033.)
When burned, hydrogen emits mainly water vapor, and it could be used instead of fossil fuels to make steel or fertilizer or to power ships. But most current hydrogen is produced from fossil fuels in a dirty process, and very little so-called “clean” hydrogen exists today.
Hydrogen companies praised senators for not abruptly ending the credit, though projects still face headwinds. The fact that wind and solar power will become more expensive could make it harder to produce renewable hydrogen. Some lawmakers also fear that the Trump administration could revoke $8 billion in Biden-era funding that created regional hubs around the country for the production, storage and transportation of clean hydrogen.
Loser: Energy efficiency
The bill terminates at the end of the year tax credits that were aimed at helping homeowners perform energy audits, upgrade their insulation, buy electric heat pumps or more efficient water heaters and install rooftop solar panels.
In 2023, more than 3.4 million homes in the United States used these credits to reduce their energy costs, said Ari Matusiak, the chief executive of Rewiring America, a nonprofit organization that promotes the electrification of homes. Now, he said, “families will face rising electricity costs with fewer tools to do anything about it.”
Winner: Fossil fuels
Mr. Trump came into office promising to expand the production and use of oil, gas and coal, the burning of which is heating the planet. In ways large and small, the bill achieves that.
The legislation mandates oil and gas lease sales in Alaska, the Gulf of Mexico and the American West. It lowers the royalty rates that coal companies pay to mine on federal lands. It provides additional tax breaks to oil and gas producers for “intangible drilling and development costs.” And it delays for 10 years a hefty fee on oil and gas companies that leak methane, a potent greenhouse gas, from their operations.
In a surprising last-minute change, Senate Republicans added a 2.5 percent tax break for U.S. production of metallurgical coal, a form of coal that has been used for decades in steel-making and is mainly exported to countries like India and Brazil.
The bill also increases the value of a tax credit for companies that capture carbon dioxide from smokestacks and inject the gas into oil wells to dislodge more crude, a process known as enhanced oil recovery.
But the rollback of clean energy tax credits will also aid the fossil-fuel industry. Fewer electric cars on the road mean higher gasoline consumption. And fewer wind turbines and solar panels mean that, at the margins, electric utilities will burn more gas and coal.
“This historic legislation will help usher in a new era of energy dominance by unlocking opportunities for investment, opening lease sales and expanding access to oil and natural gas development,” said Mike Sommers, the chief executive of the American Petroleum Institute, which represents oil and gas companies.
Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming.
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