Senate versus House Version of the IRA Provisions in the “Big Beautiful Bill”

Senate Republicans have introduced a tax bill that extends many “Green New Deal” energy giveaways past the end of President Trump’s term, despite the president wanting to end these giveaways. The Senate draft bill made several changes to a bill passed in the House last month — changes that are more favorable to the wind and solar industries. The Senate version of the Biden climate bill, the 2022 Inflation Reduction Act (IRA), phases out subsidies for solar and wind in 2026 by reducing the incentive to 60% of its value and ending it by 2028. Under current law, the tax credits are essentially unlimited. In a change from the House bill, the Senate would grant 100% of the credit to hydropower, nuclear, and geothermal facilities until 2033, then phase it out to zero by 2036. Like the House bill, the Senate version repeals all clean vehicle credits and residential clean energy and energy efficiency credits. The Senate bill also delays the complete phaseout of the advanced manufacturing production credit for critical minerals from after 2031, as proposed in the House, to after 2033.

In contrast, the House version of the bill requires “clean energy” sources to begin construction within 60 days of the bill becoming law to qualify for tax credits and to complete construction and be operating by the end of 2028. It also imposes stricter restrictions on prohibited foreign entities and repeals the transferability of many credits.

As IER’s sister agency, the American Energy Alliance, points out, projects that commence construction by 2027 would benefit in the Senate draft from a four-year “safe harbor,” making them eligible for tax credits through 2031. The Continuity Safe Harbor allows projects that began construction to still qualify for the tax credits if they are placed in service within a specific time frame. Because the Production Tax Credit (PTC) lasts for 10 years, wind and solar projects could receive federal subsidies through 2040. The Senate version also alters the House’s definition of prohibited foreign entities, allowing for more foreign ownership by those involved in projects.

The American Action Forum produced the following chart comparing the energy provisions of the Inflation Reduction Act to the Senate and House versions of the bill:

Wind and Solar Power are Not the Environmental Saviors of the Planet

Because wind and solar power cannot operate 24/7, as they require wind to blow and the sun to shine, they must be backed up by other power sources, resulting in additional costs to consumers and duplication of power sources on the grid. Besides their unreliability and higher price on a complete system basis, there are other issues associated with them. In Shattered Green Dreams: The Environmental Costs of Wind and Solar, the author finds a number of negative issues associated with wind and solar power:

• Massive Land Use Requirements: Wind and solar power require up to 10 times more land per unit of energy than coal or natural gas. Powering the U.S. entirely with wind would require land exceeding the size of two Californias.
• Wildlife and Habitat Impacts: Wind turbines are linked to habitat fragmentation and harm to bird, bat, and potentially whale populations, while solar farms displace wildlife and disrupt migratory patterns.
• Material and Mining Concerns: Solar panels, wind turbines, and batteries rely heavily on critical minerals, which are often mined in countries with poor environmental and labor standards. Domestic mining, which could reduce global ecological harm, is frequently opposed.
• Limited Lifespan: Wind and solar infrastructure have shorter lifespans (20–25 years) than natural gas (40 years) or nuclear plants (40–80 years). Repowering often occurs well before expected lifespans, further exacerbating the environmental impacts of wind and solar energy.
• Recycling Challenges: Some components in wind turbines and solar panels are hazardous, with few commercial recycling pathways. Current recycling pathways are uneconomic and underutilized, resulting in decommissioned wind turbines and solar panels often being sent to landfills, many of which are unable to handle large wind turbine blades. Massive wind graveyards have popped up, such as two gigantic ones on the outskirts of Sweetwater, Texas.

Conclusion

The Senate draft version of the “Big, Beautiful Bill” provides a softer approach to repealing provisions of Biden’s “Green New Deal” than the House version. It requires solar and wind projects to begin construction by 2028 to receive tax credits, which could result in the next Congress extending them, as the production tax credit has already been extended 14 times despite these technologies being around for decades. The Senate is neglecting the negative impacts of wind and solar power, including their higher costs and environmental challenges discussed above. These technologies make the United States far more dependent on China than it ever was on oil imports from the Middle East, since China controls many of the supply chains and the critical minerals needed for their production. The negative impacts are numerous and challenging enough that the Senate should not water down the House’s plan to quickly repeal Biden’s green giveaways, which add trillions to the deficit and increase the cost of energy for Americans.