House Tries to Repeal IRA Credits

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House Tries to Repeal IRA Credits

Plus Texas's bold move and proof that solar's not losing momentum (yet)

Aaron Nichols

May 16, 2025

Transcript

House Advances a Bill to Roll Back Clean Energy Credits

The House GOP passed their draft budget on Tuesday, targeting clean energy provisions from the Inflation Reduction Act (IRA).

Senate Republicans say the bill is only a starting point and that key changes will be needed.

What the House bill does:

The draft legislation from the Ways and Means Committee would:

Eliminate the residential solar tax credit (25D) after 2025
Phase down utility-scale credits (48E and 45Y) starting in 2029, ending by 2032
Preserve the manufacturing credit (45X) through 2031, then end it abruptly
Eliminate credit transferability two years after enactment
Shift eligibility for the credits from "start of construction" to "placed in service."
Impose sourcing restrictions linked to Foreign Entities of Concern (FEOC restrictions)
Allocate $2 billion to the Strategic Petroleum Reserve
Propose broader fossil fuel permitting reforms

Senate Republicans push back:

Several Senate Republicans say the House bill goes too far and lacks flexibility.

Sen. Kevin Cramer (R-ND) said the 2029 phaseout is too soon for newer technologies like advanced nuclear and geothermal: "It's too short for truly new technologies."
Cramer has proposed ending credits only for "mature technologies" like wind and solar.
Sen. Shelley Moore Capito (R-WV) called the House approach a "blanket repeal" and said she expects it to change.
Sen. John Hoeven (R-ND) described the bill as a starting point for negotiations.

As we know, four Senate Republicans warned that repealing IRA credits could raise energy prices and undercut recent manufacturing gains in an April letter.

However, 21 House Republicans previously advocated for the Inflation Reduction Act shortly after President Trump’s election, yet voted for the current bill, which is effectively a repeal.

What's next:

House Republicans aim for a floor vote before Memorial Day.
The Senate is expected to write its own version of the bill.
Any changes in the Senate would require a second House vote.

The bottom line:

The House bill would significantly scale back clean energy incentives, especially for behind-the-meter solar. Senate Republicans have indicated they want a different approach, meaning the current proposal is unlikely to pass as written.

Solar is Top Source of New Electricity-Generating Capacity for 19th Month in a Row

Solar energy continues to dominate U.S. electricity growth.

March 2025 marked the 19th consecutive month that solar was the largest source of new generating capacity, according to new data from the Federal Energy Regulatory Commission (FERC).

By the numbers:

31 solar projects came online in March, totaling 446 MW
In Q1 2025, solar and wind provided 7,076 MW, or 97.8% of all new capacity
Natural gas, once dominant, added just 147 MW in the first quarter (only 2% of the total)
Oil added a marginal 11 MW

Solar's share of new capacity:

66.6% in March
72.3% for the first quarter
Solar has been the top source of new capacity since September 2023

Context:

Just five years ago, solar made up only 3.8% of capacity
Ten years ago: 1.0%
Solar's share of new capacity has increased more than tenfold in a decade

Texas Senate Passes Bill, Could Penalize Solar Without Backup Power if Passed By House

New legislation in Texas would require solar projects to purchase backup power or face financial penalties. Developers would need to buy backup power through natural gas or battery storage.

What’s in the bills:

Companion bills HB 3356 and SB 715 aim to address perceived grid “reliability” issues
The Senate passed SB 715; House version is still pending a vote
The bill would apply to both new and existing solar projects

The key provision:

Solar plants would have to “match” their power output at night, when they aren’t normally expected to produce electricity.

If not, they’d be required to buy backup power or face fines.

Critics warn:

Legislation could shut down existing solar operations
It may raise electricity costs by $5.2 billion/year, according to the Texas Association of Business
Consumers could pay $225 more per year

Part of a broader trend:

This is the third major Texas Senate bill aimed at limiting renewable growth:

Senate Bill 388 would require 1 MW of new gas for every new MW of renewables
Senate Bill 819 seeks to restrict land leasing for solar and wind

Why it matters:

The legislation reflects a shift in Texas GOP politics.

Despite 80% of Republican voters believing that renewables improve grid stability, recent primaries reduced pro-renewable energy voices in the state House.