Congress passed a massive tax and spending cuts package Thursday that curbs billions of dollars in spending across clean energy. That means people will be paying a lot more for home solar, energy efficiency and other green technologies — and the nation’s efforts to address climate change just got a lot more challenging.
The bill that awaits President Donald Trump’s signature supports mining, drilling and production of the oil, coal and gas that are largely driving Earth’s warming and the increasingly deadly and costly extreme weather that comes with it. Producing and burning these fossil fuels also contributes to air pollution and human health problems.
At the same time, the bill slashes tax credits for clean technologies including wind and solar energy. That will likely mean delay or cancellation of countless projects, affecting thousands of jobs and driving up household energy costs.
Here are four things to know about what the bill means for clean energy:
The climate law passed during former President Joe Biden’s term included tax credits for systems and projects at home — like solar and batteries — that save homeowners money over time and significantly cut greenhouse gas emissions.
These systems have gotten cheaper over the years but they’re still hefty upfront expenses that some homeowners would struggle to absorb without the credits. An average rooftop solar installation can run $20,000 or more; the credit has covered almost one-third of that. An average heat pump typically costs several thousand dollars; the tax credit reimbursed up to 30% of the cost, or $2,000.
The U.S. Treasury Department said more than 2 million families claimed more than $2 billion of the credit for upgrades such as windows, insulation, heating and cooling systems in tax year 2023 returns. More than 1.2 million families claimed more than $6 billion in the credit for solar installations, solar water heating, geothermal heat pumps and battery storage and other improvements that same year.
The bill ends both tax credits at the end of this year.
“No one asked Congress to make their energy bills even higher,” said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, a nonprofit that advocates for cutting energy waste. “Taking away incentives for energy-saving improvements would raise monthly bills for families and businesses.”
But Republican lawmakers hailed the measure. Republican Sen. Mike Crapo of Idaho, the chairman of the Senate Finance Committee, said it helps unleash American energy and will save taxpayers money.
“Extending good tax policy, delivering targeted relief and reining in wasteful spending is the best way to restore economic prosperity and opportunity for all Americans,” he said.
