Senate Tax Bill Sparks Debate on Renewable Energy Credits

The U.S. Senate's tax committee has suggested an incremental elimination of solar and wind energy tax credits by 2028, contrasting with extended incentives for hydropower, nuclear, and geothermal energy, favored by the Trump administration. This proposal emerges as a draft bill, drawing attention following its circulation on Monday.

The draft, unveiled by Republican Senator Mike Crapo, aims to completely phase out solar and wind tax credits initiated under the Biden-era Inflation Reduction Act by 2026 and 2028, respectively. Meanwhile, full incentives for hydropower, nuclear, and geothermal projects are to persist until 2033 and gradually diminish by 2036, eliminating what are seen as redundant clean energy subsidies.

The announcement prompted a downturn in U.S. solar company shares and sparked debate over the possible implications for electricity reliability and national investments. With some unchanged restrictions on foreign materials, and renewed avenues for developers to transfer tax credits, the Senate bill reflects both contrasts and continuations of the House's earlier version.

(With inputs from agencies.)