House Republicans sent a message to the clean energy industry Thursday by axing key provisions of Democrats’ landmark climate law in their mega reconciliation bill.
Senate Republicans are planning to have the last word.
The legislation that passed the House early Thursday made a number of changes impacting clean energy tax credits under Democrats’ Inflation Reduction Act. Those changes — more aggressive than earlier drafts of the House bill — are expected to significantly restrict the ability for clean energy sources like wind and solar to claim the lucrative credits, while carving out wins for the nuclear sector that has been cheered by Republicans.
The Senate, where Republicans can only afford to lose three votes, likely represents the final chance to pare back some of the changes, which industry groups have warned could undermine billions in investment and tens of thousands of jobs across the country.
The upper chamber is widely expected to moderate the House version. POLITICO spoke to five Senate Republicans who plan to consider changes to the House rollbacks, with one key Republican indicating Thursday the rollbacks go too far.
“We have a lot of work that we need to do on the timeline and scope of the production and investment tax credits,” said Sen. Thom Tillis (R-N.C.), a member of the Finance Committee that has jurisdiction over the credits. “Undoubtedly, there’s going to be changes.”
Tillis is one of four GOP senators who urged party leadership in April against broadly gutting the credits, along with Sens. Lisa Murkowski (R-Alaska), John Curtis (R-Utah) and Jerry Moran (R-Kan.). All four signaled a willingness Thursday to take another look at the House bill — though they declined to outline specific changes they want to see.
“The House has spoken, and now the Senate will speak, and I’ve been pretty clear where I’m at,” Curtis said Thursday.
Murkowski said Senate Republicans are “obviously going to be looking at” the provisions added late Wednesday “as well as the final product, and kind of seeing where we start our conversation.”
Moran said he has “always been a supporter” of phasing out credits for wind and solar, but noted he needs to thoroughly evaluate the House bill “to see how acceptable [that is] or if that is too damaging.”
Republicans like Sens. Kevin Cramer (R-N.D) and Shelley Moore Capito (R-W.Va.) had already balked at the deep cuts in an earlier draft of the legislation approved by the House Ways and Means Committee.
And Sen. Ron Wyden (D-Ore.), the top Democrat on the Finance Committee, noted the technology-neutral clean electricity credits he helped write are “very popular with Republicans” in the upper chamber, especially because they support technologies like geothermal and nuclear.
“They got greedy, some of the sponsors [in the House], and now some of the Republican senators are saying, ‘We can’t go along with that,’” Wyden said.
In the months and weeks leading up the vote, dozens of House Republicans had joined letters and statements defending the credits. That fact — and the number of clean energy projects poised for GOP districts — gave many in the clean energy industry confidence that Republicans would largely preserve clean energy credits. But those House members ultimately supported the package on Thursday — increasing the stakes for Senate Republicans to make changes.
Rep. Jen Kiggans (R-Va.), one of the most outspoken defenders of the tax credits, said in a statement she voted for the bill because it delivers on other key GOP priorities, but she remains “deeply concerned” about rollbacks to the credits, especially the more aggressive cuts made just prior to the vote.
“As the bill moves to the Senate, I hope further changes will be made to protect the tax credits that are already creating jobs and providing energy for Virginia families,” Kiggans said.
Rep. Andrew Garbarino (R-N.Y.), who said late Wednesday he opposed the IRA changes made to appease conservatives, missed the vote but said he would have supported the package.
While the Senate is widely expected to moderate the IRA rollbacks, it will have to weigh them against other painful cuts and priorities for the megabill. To some clean energy advocates, the House vote was a warning sign that support is not assured until the final vote.
Chris Moyer, a former staffer for then-Senate Majority Leader Harry Reid and Sen. Cory Booker (D-N.J.), said in a statement the vote was a “real wake up call for the clean energy industry that took too much solace in a few letters from House Republicans.”
“For many in the industry, it’s their first up-close experience with the strong tide for partisan politics that prevents party divisions on major votes like this one,” said Moyer, who is now president of Echo Communications Advisors. “This is a hard-learned lesson, and the only option left is to hope the Senate will show more backbone in fixing the House’s errors.”