Illustration: Brendan Lynch/Axios
Senate Republicans reached a deal on Tuesday that would scrap a proposed new tax on wind and solar energy projects but would maintain a stricter IRA tax credit phaseout.
Why it matters: The new reconciliation bill text — hammered out after hours of overnight negotiations — is a small measure of relief for renewable energy developers who are desperate to avoid tougher restrictions.
- The amendment was approved 51-50, with Vice President Vance breaking the tie. Republicans Susan Collins, Lisa Murkowski and Thom Tillis voted against it. The full bill is now teed up for a floor vote.
Zoom in: The change comes after several GOP senators led by Joni Ernst and Murkowski circulated an amendment seeking to soften the IRA tax credit language.
- Their amendment would have extended clean electricity production and investment tax credits for wind and solar projects that begin construction begin construction by the end of 2027.
- But it currently appears that it won't get a vote. Lawmakers struggled to find ways to find other places to cut that would offset its added cost.
The text heading to a vote maintains language that would restrict tax credits to projects that were "placed in service" by the end of 2027.
- That's a much more difficult hurdle to clear as projects are often delayed in the grid review process.
Between the lines: The changes mark a modest win for the renewable sector and experts who warned the new excise tax on wind and solar could decimate the industry and cause higher power prices.
- But it's a setback for IRA-friendly Senate Republicans like Murkowski and Tillis. They were seeking to moderate the House-passed cuts and prevent projects from being cut off from the credits.
The big picture: Republican lawmakers, at President Trump's behest, have imposed harsh restrictions on wind, solar, and battery projects that make up the vast majority of proposed energy projects seeking to connect to the grid.
- Negotiations to soften the phaseouts played out overnight, with GOP leadership huddling with Murkowski, a key swing vote on the overall legislation that carries Trump's domestic agenda.
What's next: The Senate is expected to pass this version of the bill after a series of votes.
- But the debate would be far from over as the amended reconciliation bill moves to the House.
- Deficit hawks and anti-IRA hardliners there will loudly press for their party to hold firm and fully repeal the credits.
