Meera Krishnan | June 6, 2025

A new legislative push from House Republicans—dubbed the “One Big Beautiful Bill”—seeks to dismantle core pillars of the Inflation Reduction Act (IRA), a signature Biden-era law responsible for catalysing an unprecedented boom in renewable energy investment across the United States. The bill, passed by the House in May, proposes an accelerated repeal of clean energy tax credits and incentives. Its prospects in the Senate remain uncertain. But the signal is clear: the politics of America’s energy transition remain as volatile as the climate it hopes to influence.

A Shortened Lifespan for Long-Term Incentives

Chief among the bill’s provisions is the truncation of key tax credits that have underpinned the growth of clean energy. These include the Clean Electricity Production and Investment Credits (Sections 45Y and 48E), which are now slated to vanish for any project that does not begin construction within 60 days of the bill’s enactment or enter service by the end of 2028.

Also on the chopping block are credits supporting advanced manufacturing and clean transport—most notably those for electric vehicles and battery components. These had spurred a nascent manufacturing renaissance in regions long left behind by globalization, and their removal could leave many such communities in limbo once again.

Economic Consequences, Political Irony

Analysts warn that the bill could dramatically undercut investment in wind, solar, and battery storage—sectors which, since the passage of the IRA in 2022, have attracted over $185 billion in announced manufacturing commitments. A recent study by the Rhodium Group estimates that clean energy capacity additions could fall by 57–72% by 2035 if the repeal takes effect. That would, in turn, raise annual U.S. emissions by up to a billion metric tons over the next decade.

The economic fallout would be uneven but ironic. Many of the Republican-held districts that voted for the repeal are precisely those that have benefited most from the IRA’s incentives. According to the Solar Energy Industries Association, some 330,000 clean energy jobs could be lost nationwide, with Texas alone potentially forfeiting over 34,000. Thirteen House Republicans who backed the bill represent districts collectively in line for more than $40 billion in clean energy investment.

Musk vs. MAGA

Perhaps the most surprising opposition to the bill has come from Elon Musk, the electric-vehicle magnate and erstwhile ally of the Republican right. In a rare rebuke, Musk accused Donald Trump and House Republicans of undermining energy independence and damaging American competitiveness. Mr. Trump, never one to shrink from a fight, responded with characteristically personal barbs. The spectacle of two of the right’s highest-profile figures trading blows over tax credits adds a surreal flourish to what is otherwise a highly consequential policy debate.

The Senate's Quiet Calculus

Despite its theatrical branding, the bill’s path forward is far from assured. Some Senate Republicans—mindful of the economic gains their states have enjoyed under the IRA—are reportedly uneasy about the scale and speed of the proposed rollback. There is speculation that the upper chamber will soften the bill’s more draconian elements, perhaps by phasing out credits more gradually or preserving support for certain industries.

A Fork in the Grid

Whether the “Big Beautiful Bill” dies in the Senate or is reborn in a tamer form, it is a stark reminder that America’s energy transition remains hostage to political whims. The IRA may have brought capital and confidence to clean energy markets, but its durability was always contingent on electoral math. In the coming months, investors and project developers will be watching Washington—not the weather—for clues about the future of the American grid.

This article was published with the help of AI.