Updated Senate bill slashes wind and solar incentives — and adds a new tax

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An updated draft of the Senate's megabill has significantly reduced tax incentives for wind and solar energy projects while introducing a new tax on future developments. The initial proposal allowed projects that began construction in 2023 to receive full credit, with a gradual reduction for those starting in subsequent years. However, the revised version now stipulates that only projects producing electricity before the end of 2027 will qualify for credits, raising the bar for eligibility.

Additionally, the new legislation imposes a tax on wind and solar projects that come into service after 2027, contingent on a certain percentage of their components being sourced from China. These changes are seen as a victory for the more conservative faction of the GOP, which has advocated for cuts to renewable energy credits, while the renewables lobby has criticized the alterations as detrimental to the sector's growth and the overall reduction of greenhouse gas emissions.