House Republicans Pass Legislation To Eliminate Solar Tax Credits

Here's what happens next

Aaron Nichols

May 23, 2025

Transcript

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What’s new:

A lot has happened in the last week, alongside the Republican-led House trying to dismantle the Inflation Reduction Act.

Here’s an overview of the timeline:

May 16

The House Budget Committee blocked the initial draft budget bill. Five Republicans joined Democrats to stop the bill from advancing.

One of their reasons?

Some Freedom Caucus members believed it didn't go far enough in cutting clean energy tax credits (ending the "Green New Scam," in the words of one Congressman).

May 20

The U.S. International Trade Commission voted to impose new tariffs on solar panels from Southeast Asia. Tariffs up to 3,500% will take effect June 16.

May 21

Reports confirm that solar leasing dominates the commercial solar market.

Third-party ownership reached 72% in 2024.
Transferable tax credits have been key to that growth.

May 22, early morning

The House passed a revised budget bill in a 215–214 vote.

The new bill includes harsher restrictions on solar tax credits after last-minute changes.

Two Republican Congressmen who supported clean energy, Andrew Garbarino and David Schweikert, missed the vote.

What this House bill would do if passed:

End the residential solar tax credit (25D) after 2025.
Eliminate the ability for solar leasing companies to use the 48E tax credit.
Require projects to start construction within 60 days of enactment or be placed in service by the end of 2028 to qualify for 48E and 45Y credits.
End 48E and 45Y with no phase-out in 2028.
Restrict credit transferability starting in 2027.
Move compliance with Foreign Entity of Concern (FEOC) restrictions to the end of this year, December 31, 2025.
Preserve 45X manufacturing credit through 2029, with a phase-down through 2031.

Next step

The bill moves to the Senate, where changes are expected.

Senate Republicans have said they will propose a different approach. No tax credit changes will take effect unless the Senate agrees and the bill becomes law.

Go Deeper:

House Moves to Eliminate Solar Tax Credits

More about the tariffs:

What happened:

On May 20, 2025, the U.S. International Trade Commission (ITC) ruled that solar imports from Cambodia, Malaysia, Thailand, and Vietnam harmed U.S. manufacturers. This clears the way for new anti-dumping and countervailing duties.

Tariff details:

Tariffs were proposed by the Dept. of Commerce in April 2025. Final rates vary by country and manufacturer:

Cambodia: 650%–3,500%
Malaysia: 14%–250%
Thailand: 375%–972%
Vietnam: 120%–813%

Tariffs will apply to silicon solar cells and modules. The Commerce Dept. will issue formal tariff orders on June 9. U.S. Customs will begin collecting tariffs on June 16.

Background:

The petition was filed in April 2024 by the American Alliance for Solar Manufacturing Trade Committee, led by Hanwha Qcells and First Solar. The group alleged that Chinese-owned companies used Southeast Asia as a base to avoid existing Chinese tariffs.

The ITC agreed, finding these imports to be unfairly priced and subsidized.

Industry reaction:

Supporters of the tariffs say they will protect U.S. solar manufacturing and enforce trade law.
Opponents (including SEIA) argue the tariffs could raise costs and hurt U.S. solar producers who rely on imported cells.
SEIA warns the tariffs could stall solar deployment and undermine domestic manufacturing growth.

Current impact:

Imports from the four countries have already dropped in anticipation. The tariffs add further pressure to a solar industry already facing higher interest rates and tax credit uncertainty.