The Trump administration is considering eliminating various Biden-era climate action policies designed to invest in America’s burgeoning green energy industry. U.S. House representatives recently introduced plans to phase out renewable energy tax credits, cut federal spending on clean energy and electric vehicles, and pull back funding dedicated to climate action in an attempt to pass a budget that aligns with President Donald Trump’s anti-green energy agenda.
President Trump frequently criticized the Biden administration for investing tens of billions of dollars into building out the country’s green infrastructure and vowed to rescind all federal funds earmarked for climate action if he were elected. True to form, the GOP immediately began dismantling clean energy and climate action policies put forth by the Biden administration, dealing a massive blow to America’s nascent green energy industry.
A proposal laid out by the House Committee on Energy and Commerce now seeks to raise $6.5 billion in federal funding by repealing some of the climate action-related sections of the 2022 Inflation Reduction Act (IRA). The landmark legislation invested hundreds of billions of dollars into building out a wide network of public EV chargers in the U.S. and spurring the growth of a robust domestic supply chain by incentivizing companies to source raw materials from local firms or allies.
The House Ways and Means panel has also introduced another proposal to phase out or cancel impactful IRA tax credits, such as the EV purchase tax credit for consumers and credits for improvements in home energy efficiency. A recently released document notes that the proposal also seeks to eliminate various critical green energy subsidies by 2031. While adopting these proposals would result in a budget more in line with President Trump’s energy agenda, it would have significant consequences for the country.
Groups that represent the wind and solar industries argue the proposals could lead to the loss of countless American jobs and clash with President Trump’s goal of expanding America’s domestic capacity for energy. Solar Energy Industries Association President Abigail Ross Hopper says that with demand for energy in the commercial sector surging as American businesses fight to compete with foreign firms, many consumers are turning to renewable energy to avoid high energy prices.
Consequently, the U.S. House proposals risk undermining national efforts to achieve Trump’s energy dominance agenda. These proposals would rapidly phase out the technology-neutral 45Y credit for renewable energy sources like solar, wind, geothermal, and nuclear. They would also eliminate a 2022 IRA provision that allowed the sale of tax credits to finance project construction. On the other hand, the budget proposals would retain carbon capture and sequestration tax credits, which primarily benefit the gas and oil industry, and extend a sustainable aviation fuel tax credit.
It remains to be seen how these policy changes will impact the trajectory of companies like SolarBank Corp. (NASDAQ: SUUN) (Cboe CA: SUNN) (FSE: GY2) that had positioned themselves to address the market for clean energy solutions like solar systems in the U.S. and other major markets.
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