On 17 June 2025 Reuters broke the news that Senate Republicans had drafted budget language to shrink and then erase the solar and wind investment and production tax credits by 2028.

The proposal arrives only three years after the Inflation Reduction Act set those credits as the backbone of national decarbonization strategy.

What the Senate Draft Says

The text from Finance Committee Chair Mike Crapo would cut the value of both credits to 60% in 2026, 20% in 2027, and 0% for projects beginning after 2027.

Residential rooftop solar loses its 30% credit after a 180‑day grace period, while credits for nuclear, hydropower, and geothermal extend to 2036.

The House took an even sharper look

The House passed the “One Big, Beautiful Bill Act” on 22 May 2025 with a near party line vote, demanding an even faster cutoff that ends eligibility by late 2025.

Conference negotiators must now merge the two texts, but both chambers share the same bottom line, no federal credits for new solar or wind after 2028.

Odds of passage

Because budget reconciliation needs only a simple Senate majority, the bill can clear the chamber if Republicans stay united.

Analysts expect frantic bargaining through late June, with moderates lobbying for limited grandfather clauses, yet most observers still assign better than even odds of enactment before Independence Day.

Market shock was immediate

Solar equities plunged on 17 June, with Sunrun falling nearly 40% and Enphase dropping a third in a single session.

The Invesco Solar ETF is now flirting with three year lows, signaling investor belief that residential and utility scale demand will crater post 2026.

How many projects could vanish

Energy Innovation modeling finds the Senate and House package would erase over half of the clean power capacity that analysts expected through 2035.

That shift means roughly 670 gigawatts of solar, wind, and storage might never leave the drawing board, a loss equal to the current entire US generating fleet.

Jobs on the line

The Solar Energy Industries Association warns that 330,000 solar and storage jobs could disappear by 2030 if credits vanish.

Losses hit installers, factory workers, and electricians in every state, with Texas, California, and Florida facing the steepest cuts.

Household wallets feel it too

Clean Energy Buyers Association models show average residential power bills rising 7% in 2026 and 10% by 2030 once cheap renewable supply stops expanding.

Families also lose the upfront rooftop credit, adding more than five thousand dollars to a typical 6 kilowatt home system cost.

Grid mix turns back toward fossil fuels

Princeton’s REPEAT Project estimates that early credit sunset keeps the grid only about 50% clean in 2035 instead of above 80% under current law.

More natural gas generation and delayed coal retirements push power sector carbon dioxide emissions up by as much as one billion tons this decade.

Reliability not guaranteed

Supporters claim fewer renewables will improve reliability, but grid planners caution that replacing eighty gigawatts per year of planned solar and wind with only a handful of gas peakers could leave reserve margins tight.

Transmission upgrades tied to renewable build outs may also stall, increasing congestion costs.

Nuclear, Hydro, and Geothermal step forward

The draft grants a full decade of certainty for these dispatchable clean resources, and that could rescue several existing nuclear plants from early retirement.

Developers of small modular reactors now have clearer revenue signals, although most projects still face lengthy licensing hurdles.

International ripples

Rolling back the credits undermines the industrial strategy that lured dozens of clean tech factories to American soil after 2022.

Canceled capacity could redirect investment back to Asia, letting Chinese suppliers reclaim solar panel market share that the IRA had begun to erode.

Historical lessons

Every prior lapse of the wind production credit triggered a bust year where installations fell more than 70%.

The 2015 PATH Act showed that gradual step downs sustain industry growth, suggesting today’s sharp cliff may cause a deeper and longer slump.

Winners and losers

Natural gas turbine manufacturers and nuclear operators gain runway, while solar and wind developers face immediate headwinds.

Utilities with coal or gas assets enjoy extension revenue but risk backlash when customer bills rise.

Consumer choices narrow

Without the federal rooftop credit and with efficiency incentives ending in 2025, homeowners are less likely to install heat pumps, smart panels, or solar arrays.

That slowdown reduces local electrician and HVAC employment and locks many households into higher utility costs over two decades.

State policies become the safety net

States with renewable portfolio standards or their own tax credits can cushion some of the impact, yet even California and New York relied on federal dollars to hit aggressive timelines.

Expect new state legislation seeking to replace lost federal support, though budgets are tighter than Washington’s.

Action items for employers

Clean energy firms should expedite late stage projects to break ground before 2026 and diversify into storage or efficiency services that keep some federal support.

Recruiters need to prepare contingency plans for workforce redeployment into adjacent infrastructure sectors.

Action items for investors

Interrogate company exposure to US solar and wind demand between 2026 and 2030 during earnings calls.

Look for balance sheets prepared to pivot to foreign markets or segments like standalone storage.

Action items for policymakers

If the rollback passes, consider bridge measures such as temporary loan guarantees or extended direct pay for projects already in queues.

Strengthen transmission permitting to ensure any gas or nuclear replacements can reach load centers promptly.

What comes next

Senate floor debate starts within days, and a final vote could come by early July.

Industry watchers will track amendments that could soften the phase down, particularly a possible grandfather clause for projects that secure interconnection before 2027.

Economic stakes by the numbers

SEIA estimates that repealing just the residential credit removes about eighty five billion dollars of consumer purchasing power through 2030, cash that would have flowed into local installers and Home Depot aisles.

Rhodium Group calculates that the combined Senate and House cuts raise systemwide US electricity costs by fifty one billion dollars a year by 2035.

Workforce disruption pathways

Clean energy labor markets had been scaling rapidly, with IREC reporting one in every fifty new American jobs created in 2024 came from solar or wind.

A sudden slump could mirror the 2011 collapse of solar manufacturing, when thin film maker Solyndra’s failure rippled across a then fragile job ecosystem.

Regional winners and losers

States like Iowa and Oklahoma had planned multi gigawatt wind buildouts that now look shaky, putting rural lease payments and county tax bases at risk.

Conversely, gas rich Appalachia could see renewed drilling and pipeline activity, partially offsetting job declines in renewables but reinforcing existing regional income divides.

Technology alternatives on the horizon

Battery storage still qualifies for a separate investment credit, and stand alone projects may cushion some reliability gaps created by slower solar growth.

Developers also eye emerging geothermal technologies such as enhanced closed loop wells, though those remain early stage and capital intensive.

Potential compromises under discussion

Lobbyists float a glide path that retains a 30% credit until 2028, then steps down 10 points annually to 0 by 2031.

Another idea would allow projects with signed interconnection agreements by 2027 to claim full value even if construction starts later, providing planning certainty.

What businesses can do now

Manufacturers should stress test sales forecasts under scenarios with partial credits, zero credits, and state only support, updating capital expenditure plans accordingly.

Companies with strong liquidity may find bargain valuations in distressed renewable asset sales, offering counter cyclical acquisition opportunities.

Six questions every stakeholder should ask

How dependent is our revenue outlook on projects that start after 2027?
Can our supply chain meet stricter domestic content rules without foreign entities of concern?
Do we have hedges against higher natural gas price volatility?
Which states in our footprint have authority to create replacement incentives?
What workforce retention strategies are in place if demand drops 50%?
How will higher retail rates affect customer adoption of electrification products?

Broader climate diplomacy context

The International Energy Agency notes that advanced economies must triple renewable build each year to align with net zero pledges.

The United States retreating from incentives risks slowing global momentum, reducing leverage when Washington urges other nations to accelerate their own transitions.

Financing landscape in flux

Tax equity investors, chiefly large banks, priced deals assuming a decade of certainty, and they may now reduce commitment volumes for 2026 onward.

Debt providers might raise interest rate spreads for merchant solar projects by up to 200 basis points to compensate for policy risk, squeezing returns.

Impact on corporate procurement targets

Over 400 US corporations have signed 24/7 clean power purchase agreements to decarbonize operations.

If new wind and solar contracts dry up, companies like Google and Walmart will struggle to hit Scope 2 goals, pushing them to lobby Congress for a softer landing.

Environmental justice considerations

Communities hosting peaker gas plants thought those units would retire as renewables grew, reducing local pollution hotspots.

Without new clean capacity, those peakers could run harder and longer, prolonging health burdens in neighborhoods already bearing disproportionate air quality impacts.

Research and development slowdown

Federal labs and universities rely on industry cost share funding linked to commercial project pipelines.

A thinner pipeline means fewer demonstration sites and smaller private contributions, potentially stalling next generation technologies like perovskite solar and long duration storage.

Tracking metrics going forward

Key indicators to watch include FERC interconnection request withdrawals, weekly gigawatt totals for new solar PPAs, and tax equity fundraising volumes.

Movement in these metrics will show whether the industry believes compromise is likely or the cliff is inevitable.

Case study: Texas solar boom at risk

Texas added more solar capacity than any other state in 2024, yet ERCOT data already show developers pausing megaprojects slated for 2027.

Local chambers fear losing thousands of construction jobs and hundreds of millions in rural county revenue if the phase out proceeds unmodified.

Ready to Move Forward?

Astute specialises in matching energy employers with the technical talent needed to thrive, even when policy shifts unsettle project plans.

Talk with Astute today about how the proposed credit rollback could reshape your workforce strategy.