Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Investments»Congress’s “One Big Beautiful Bill” Will Shrink Renewable Energy Investments—Yet Some Technologies Are Preserved
    Investments

    Congress’s “One Big Beautiful Bill” Will Shrink Renewable Energy Investments—Yet Some Technologies Are Preserved

    August 4, 20258 Mins Read


    In July 2025, Congress passed the “One Big Beautiful Bill Act” (OBBBA) through a process known as reconciliation, which expedites legislation related to spending, revenue, and the debt limit. The bill, among many other changes to existing taxation and spending provisions, makes significant alterations to public incentives for climate and energy-related investments. 

    More From Our Experts

    Clean energy technologies and infrastructure investments have soared since the Joe Biden administration’s 2022 Inflation Reduction Act (IRA). Investment in building and deploying low-carbon technologies was 71 percent higher in the two years following the IRA, compared to the two years prior. 

    More on:

    Climate Realism

    Energy and Climate Policy

    Energy and Environment

    Fiscal Policy

    Budget, Debt, and Deficits

    The OBBBA pulls back billions of dollars in funding earmarked for climate and clean energy investment under the IRA, which experts say will likely shrink U.S. renewable energy investments and hamper decades-long efforts to reduce U.S. greenhouse gas emissions. 

    The bill preserves limited tax incentives for some clean energy industries, prioritizing certain technologies and investments over others. Solar and wind energy and electric vehicles will be the most affected by the reduction of these incentives, while other technologies—such as small modular reactions, enhanced geothermal, and carbon capture and storage—will maintain many of their current investment incentives or see a more gradual reduction than will wind and solar.  

    Wind and Solar Energy

    Wind and solar constitute a growing percentage of utility-scale electricity generation in the United States, making up 15.6 percent of U.S. electricity generation in 2024 up from 8.0 percent in 2018. In addition, utility-scale solar investments have increased by 56 percent, from pre-IRA levels. 

    More From Our Experts

    In addition, utility-scale solar investments have increased by 56 percent, from pre-IRA levels. IRA tax credits could be used to support both investing in clean energy projects and producing electricity from low-carbon sources including wind, solar, geothermal, hydropower, and nuclear energy. The OBBBA eliminates these credits for unfinished wind and solar facilities after 2027. 

    Under the IRA, producers of wind and solar components were also eligible for advanced manufacturing credits, which allowed them to obtain a tax deduction for their investment in renewable energy projects. Manufacturers of solar panels, wind turbines, clean hydrogen-producing electrolyzers, and other low-carbon energy technologies saw large increases in investment after the IRA, with solar manufacturing investment reaching $10 billion from just $890 million two years earlier. Under the OBBBA, solar and battery components will continue to receive credits for advanced manufacturing components, while wind components will be phased out immediately.  

    More on:

    Climate Realism

    Energy and Climate Policy

    Energy and Environment

    Fiscal Policy

    Budget, Debt, and Deficits

    By moving funding away from solar and wind sources, the Trump administration is prioritizing so-called baseload power facilities, which provide consistent electricity output regardless of weather conditions or time of day. However, these types of facilities can take longer to build and integrate, which could postpone additions to the grid electricity supply.

    Nuclear Energy

    Unlike other low-carbon energy sources that are affected by the OBBBA, nuclear energy maintains a significant amount of the incentives established or expanded under the IRA. 

    The OBBBA preserves many of the tax breaks designed to support advanced nuclear technology demonstration projects and expand existing nuclear plants. Unlike wind and solar, where similar tax credits will expire much earlier than they would have under the IRA, new nuclear projects remain eligible for the credit until 2028, the original timeline established under the IRA.

    The OBBBA also preserves the nuclear power production credit, which aims to boost power production from the current fleet and new nuclear technologies. The bill also allocates $125 million to developing small modular reactors for military use. 

    Nuclear energy enjoys bipartisan focus and support due to its role in promoting U.S. energy security, geo-economic competitiveness, and climate goals. Recent executive orders and the OBBBA’s preservation of nuclear energy federal funding signal that the federal government will continue to treat nuclear energy as a priority.

    Geothermal Energy

    Geothermal energy uses the Earth’s heat to generate power, and it is one of the technologies that remains supported in the OBBBA. Only 0.4 percent of U.S. electricity production came from geothermal energy sources in 2023, yet next-generation geothermal energy projects are gaining momentum across the country. Geothermal is also garnering significant bipartisan support due to its ability to provide a steady source of power and its technological overlap with the oil and gas industry.  

    Energy Secretary Chris Wright played a public role in defending IRA tax credits for geothermal energy, lauding its ability to “help enable AI, manufacturing, reshoring, and stop the rise of [American] electricity prices.”

    Under the OBBBA, geothermal power plants continue to qualify for clean energy investment and production tax credits until 2033. 

    Electric Vehicles

    The OBBBA made significant reductions to federal support for the entire EV supply chain, including domestic car and battery manufacturing, charging infrastructure, and consumer purchases. The bill terminates Biden-era consumer tax credits for new and used EVs in September 2025, six years earlier than they would have been under previous legislation. It also eliminates tax credits for charging equipment after September 2025, seven earlier than previously planned.

    Since the passage of the IRA in 2022, total private investments in EV production, including EV assembly and battery manufacturing, have grown 45 percent compared to the two years before the IRA came into effect. Removing incentives for manufacturers and consumers could slow the U.S. EV industry’s momentum by lowering EV sales, threatening supply chain investments, and allowing China to continue to widen its lead in the global EV market.

    Foreign Entity of Concern (FEOC) Restrictions

    The OBBBA takes measures to limit the number of tax credits that companies with certain types of foreign ties can claim. These changes further restrict investment credits for a variety of industries, including solar, wind, nuclear, advanced manufacturing, and carbon capture. Groups are labeled foreign or foreign influenced if they’re connected to China, Iran, North Korea, or Russia. 

    Both President Biden and President Trump have attempted to reshore supply chains for national security reasons. With these FEOC safeguards, the Trump administration seeks to limit foreign influence on critical energy supply chains. However, this addition also creates a regulatory environment where few companies are eligible for the remaining tax credits. For instance, China dominates the solar manufacturing and assembly supply chain, yet U.S. companies cannot enter contracts with Chinese entities under the new rules. These changes could limit expansion of clean energy industries in the United States, like wind and solar.  

    The World This Week

    CFR President Mike Froman analyzes the most important foreign policy story of the week. Plus, get the latest news and insights from the Council’s experts. Every Friday

    Clean Energy Financing Mechanisms

    Alongside shifting technology credits, the OBBBA limits the lending power of the Department of Energy’s Loan Programs Office (LPO). The LPO provides long-term financing for clean energy projects and has been crucial for getting larger projects off the ground. For example, it helped restart a Michigan nuclear power plant by providing a $1.52 billion loan guarantee, which will provide baseload power from the end of this year until 2051.

    However, the LPO is expected to lose unappropriated funds for several large-scale programs for clean energy, including: 

    • $3.6 billion from the Loan Guarantee Program, which supports the deployment of innovative clean energy technologies;
    • $5 billion from the Energy Infrastructure Reinvestment Program, which supports projects that revitalize or replace nonoperational energy infrastructure; 
    • $3 billion from the Advanced Technology Vehicle Manufacturing Program, which provides loans to manufacture components of advanced technologies; and
    • $75 million from the Tribal Energy Loan Guarantee Program, which supports energy investment in tribal communities.

    These cuts, or recissions, to the LPO, paired with terminated tax credits, create an uncertain federal funding environment for private project developers, potentially further impeding renewable deployment.

    In a report by Princeton’s Zero-Carbon Energy Systems Research and Optimization (ZERO) Lab, researchers found that the OBBBA will shrink investment in U.S. electricity and clean fuels by $500 billion by 2035, while increasing greenhouse gas emissions by about 190 million metric tons every year. The report also concluded that the bill will reduce clean electricity generation in 2035 by over 820 terawatt-hours, which accounts for more than the amount of nuclear or coal in the U.S. electricity supply today. Additionally, U.S. household and business energy expenditures will increase.

    Although the OBBBA will have significant consequences for affordability and deployment of all clean energy technologies, the remaining investment incentives for nuclear, geothermal, and other select technologies provide an opportunity for broader bipartisan work on these technologies and continued momentum for some low-carbon energy sources.

    Akkshath Subrahmanian is climate and energy intern at CFR.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    RBI urges banks, corporates to drive investments amid tariff, geopolitical uncertainties | Business News

    Investments

    DoDEA Day Strengthens Bonds Between Educators and Military Community at Ramstein Air Base | Article

    Investments

    The smarter property bet lenders can’t ignore

    Investments

    More than 50 percent of Hongkongers plan to work past retirement age

    Investments

    India bonds rise as Powell’s dovish remarks partly offset fiscal concerns

    Investments

    Prudently managing post-retirement portfolio need of the hour

    Investments
    Leave A Reply Cancel Reply

    Top Picks
    Cryptocurrency

    NEWS: FIUs in France, Germany and Poland focus on cryptocurrency money laundering risks

    Property

    Drew Scott & Linda Phan’s Son Parker Is a ‘Property Brother’

    Commodities

    Ozzy Osbourne is on the cover of the new Metal Hammer

    Editors Picks

    Le Real Madrid s’impose face à l’Atlético en huitièmes de finale aller de la Ligue des champions

    March 5, 2025

    Cryptocurrency Investors Join Mpeppe With Sirwin & Bitstarz Profits, 20% Instant Bonus Available Now

    August 21, 2024

    5 ways cryptocurrency could narrow the racial wealth gap

    March 29, 2025

    Next Cryptocurrency to Explode, 23 March — Alchemy Pay, PancakeSwap, StarkNet, Lido DAO

    March 23, 2025
    What's Hot

    $27.3 million in financing secured for a two-property industrial portfolio in New England

    July 30, 2024

    Argentina’s Milei under scrutiny over cryptocurrency post in suspected rug pull scam

    February 15, 2025

    BTC Faces Trouble: 5 Alternative Coins Whales Are Investing In Right Now

    August 23, 2024
    Our Picks

    Introducing Lendlord’s New BRRR Analyser: Revolutioni…

    August 19, 2024

    Argentina’s economic shock therapy and fintech boom are wiping out peso notes

    August 10, 2024

    Jumpex Cryptocurrency Exchange Announces Permanent Closure of Platform by November 30, 2024

    October 12, 2024
    Weekly Top

    Crescent Energy to acquire Vital Energy in US$3.1 billion shale deal – BNN Bloomberg

    August 25, 2025

    Dow, S&P 500, Nasdaq slip after record-setting surge as Nvidia earnings loom

    August 25, 2025

    RBI urges banks, corporates to drive investments amid tariff, geopolitical uncertainties | Business News

    August 25, 2025
    Editor's Pick

    Charter Hall Retail REIT augmente sa participation dans Hotel Property Investments à près de 77%. -Le 03 février 2025 à 01:02

    February 2, 2025

    If You Invested $10K in These 3 Dividend Stocks 10 Years Ago, You’d Be a Millionaire

    June 17, 2025

    4th World Utilities Congress strategic conference spotlights future of global utilities

    May 24, 2025
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.