New Tax Bill Threatens U.S. Clean Energy Boom

(Washington, D.C. — May 12, 2025) The latest budget reconciliation proposal before two key U.S. House committees this week would dramatically roll back federal clean energy tax incentives and overturn critical EPA programs, undermining an American-made energy boom and domestic manufacturing, raising costs for businesses and families, and threatening people’s health with more pollution.  

The draft legislation would repeal or prematurely phase out critical incentives for clean energy deployment, manufacturing, energy efficiency and clean transportation. Taken together, these credits have catalyzed more than $400 billion in private investment since 2022, supporting hundreds of thousands of jobs nationwide — from battery plants in Arizona, wind manufacturing in Virginia and solar installation businesses across the country.  

“This draft pulls the rug out from under businesses and consumers alike,” said Joanna Slaney, Vice President for Political and Government Affairs at Environmental Defense Fund. “It would increase energy costs, jeopardize jobs, block innovation and cede U.S. manufacturing leadership to other countries while inviting more pollution into our communities.” 

The U.S. has seen historic growth in clean technology in recent years because of federal tax incentives. With electricity demand expected to surge — driven by data centers, manufacturing reshoring and electrification — these incentives are essential to supplying power reliably and affordably. Independent analysis shows that fully repealing the tax incentives could raise household electricity bills by as much as 20% in some states by 2026.  

The House Ways and Means Committee’s proposed cuts also threaten the electric vehicle supply chain and advanced manufacturing renaissance that is underway. Without these credits, major automakers warn of U.S. factories closing and jobs moving to other countries. The legislation risks reversing domestic manufacturing gains just as global competitors ramp up their own investments.  

The House Energy and Commerce Committee, meanwhile, proposed repeals of EPA tailpipe pollution standards and more protective fuel economy standards for the nation’s new cars and passenger trucks, rules aimed at speeding adoption of electric vehicles and providing cleaner air. It also proposed a 10-year delay of a fee on wasteful methane releases from oil and gas companies and the repeal of critical funding for communities to clean up their air at ports and schools and transition to cleaner technologies. 

“Slashing investments designed to help companies reduce pollution is unwise and undermines the administration’s promise of cleaner air,” Slaney said.  

The committees will meet separately Tuesday to debate and make changes to the bill, with the path in the full House and Senate still uncertain.