Why wind and solar hit a brick wall in Congress
Add Axios as your preferred source to
see more of our stories on Google.
Photo illustration: Brendan Lynch/Axios. Photo: Paul Morris/Getty Images
Investments in red states and Trump-friendly messaging are proving no match for a perfect political storm that's blowing apart federal support for wind and solar.
Why it matters: While the GOP budget bill would spare incentives for some kinds of tech, it would quickly end the main tax credits for those two sources — and would add new taxes.
- Analysts say the provisions will sharply cut project growth.
Catch up quick: The Senate plan would cut off investment and production tax credits for wind and solar projects that don't begin operating by the end of 2027.
- And a surprise addition late Friday would impose new taxes on many future projects that use materials traceable to China.
State of play: Despite hopes for friendlier terrain than the House, the Senate bill got progressively worse for the industry, despite analyses showing jeopardy for red state investments and jobs.
- While renewables have enough GOP support in the narrowly divided House and Senate to give backers leverage, it wasn't atop the political radar.
- "I think the biggest problem for the clean energy credits is that they are a lower priority for the moderates than Medicaid in the Senate and SALT in the House," Jeff Navin, a partner at clean-tech lobbying and advisory firm Boundary Stone Partners.
Friction point: "The Freedom Caucus is going to have to swallow compromises on those issues, and they need something in return. The clean energy credits are something they want gutted, regardless as to their impact on the deficit," Navin told me via email.
Between the lines: Political temperament matters, too.
- "In addition to being political moderates, the moderates are moderate by deportment. They want to work things out, to be part of an agreement," Alex Flint, a former senior GOP Senate aide, tells me via email.
- "On the other hand, the far right are combative — they don't like government and are ungovernable — so, to date, they have been a bigger threat to a deal," adds Flint, executive director of the Alliance for Market Solutions.
The big picture: Another factor? It's President Trump's GOP.
- Trump is especially against wind power, which he's been criticizing sharply for years. Politico reported that Trump directly urged Senate Majority Leader John Thune to quickly end solar and wind incentives.
- The dynamic for EVs is similar, with Trump campaigning on pledges to scuttle federal support.
The intrigue: Some other kinds of clean tech have backing from the oil and gas industry, like hydrogen (which won a limited reprieve), geothermal and carbon capture.
- Wind and solar also had opposition in the ferocious lobbying fight over the bill. The NYT looks at the crosscurrents and zooms in on fossil fuel advocate Alex Epstein's role (though he opposes the new tax on projects).
The bottom line: The overlapping political problems and lobbying headwinds were simply too much — even as clean tech industries have ditched climate messaging and played up their contribution to Trump's "energy dominance" goal.
