US Senate Bill Seeks to End Solar and Wind Tax Credits by 2028

In a major policy shift, a US Senate panel has proposed a full phase-out of federal tax credits for solar and wind energy by 2028, while extending similar incentives for nuclear, hydropower, and geothermal projects through 2036. While widely anticipated, the move still underscores the blind kowtowing to President Trump in the Republican party, a poor portent of well thought through policy moves in the future as well.  A large number of executive orders issued by President Trump have stalled or faced pushback in the courts in recent weeks, as resistance builds up to many moves considered ill-considered at best, and corrupt at worst.  

The senate move has expectedly drawn sharp reactions from the broader clean energy industry, which fears the rollback could stall investment and job growth in solar and wind.

Solar and Wind Hit Hard by Revised Timeline

The draft bill, introduced by Senate Finance Committee Chair Mike Crapo, would scale back solar and wind tax credits / incentives introduced under the 2022 Inflation Reduction Act. While those incentives were originally set to remain until 2032, the Senate version accelerates the phase-out: reducing the value of credits to 60 percent in 2026, and removing them entirely by 2028.

In contrast, nuclear, hydro, and geothermal will continue to receive 100 percent credit until 2033, tapering off by 2036. 

Clean energy leaders criticised the uneven treatment. Abigail Ross Hopper, head of the Solar Energy Industries Association, said, “This legislation does not go far enough to remove the threat to one of America’s greatest economic success stories.”

Unsurprisingly, shares of several US-listed solar companies plunged in after-hours trading following the announcement.

Senate Offers Modest Revisions, Keeps Key Limits

The Senate version does allow more flexibility than the House-passed 'One Big, Beautiful Bill Act'. Unlike the House bill, which required projects to be completed by December 2028 to qualify, the Senate proposes that projects merely begin construction within specified years. This change offers breathing room amid project delays and grid interconnection bottlenecks.

The bill also retains the ability for developers to transfer tax credits to third parties - critical for reducing financing costs. This provision had been eliminated in the House bill.

However, the Senate retains restrictions on sourcing equipment and materials from ‘foreign adversaries,’ primarily targeting China. While slightly softened, these rules could still impact large-scale projects relying on Chinese solar modules or minerals.