As Republicans on the Senate Finance Committee prepare to release their portion of the GOP legislative package working its way through Congress, energy tax credits approved under the Biden administration remain a major part of their debate.
At issue are clean energy credits that were enacted under the 2022 Inflation Reduction Act, known as the IRA, and largely eliminated in the version of the bill that the House passed.
The bill would halt roughly $522 billion in investments approved in the IRA from being spent in communities across the country.
The House bill would roll back incentives for wind, solar and hydrogen power, phase out consumer tax credits for new electric vehicles, and terminate some credits for projects that begin construction more than 60 days after the bill's enactment, among other changes.
Lawmakers from both sides of the aisle say they are fielding calls from advocates and energy industry leaders concerned that without significant changes from the Senate, Americans will face higher energy bills and less jobs.
And the credits are already becoming fodder for political attacks. Groups like Protect Our Jobs, a political action committee spending money advocating for clean energy jobs, is funneling money into ads targeting House Republicans who supported the reconciliation bill.
"I'm a Republican, but now I'm seeing Republicans in Washington try to eliminate jobs like mine," says an electrician working in solar energy in one ad.
"How [tax credits] go is important" says GOP senator looking at House bill
A handful of GOP senators are advocating against a slash and burn approach on the energy credits.
GOP Sens. Lisa Murkowski of Alaska, John Curtis of Utah, Thom Tillis of North Carolina and Jerry Moran of Kansas cautioned against a "full-scale repeal of current credits" in an April letter to Senate Majority Leader John Thune, R-S.D.
"Many American companies have made substantial investments in domestic energy production and infrastructure based on the current energy tax framework," they wrote in the letter. "A wholesale repeal, or termination of certain individual credits, would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy."
In an interview with NPR, Sen. Curtis said he is having good conversations with other Senate Republicans who are "very receptive" to his concerns about the House bill.
"I think it's really important that Senate Republicans — and I wish House Republicans — look at this not from the standpoint of 'it's in the IRA, therefore it's bad', but rather what is in the country's best interest and what is the best tax policy and make good, thoughtful decisions," Curtis said.
He stressed the need to consider how to support business owners who had been making plans under the IRA.
"One of the worst things that we do to businesses is inconsistency and unpredictability. And therefore, I argue for a kind of appropriate off ramp," he said. "If we're closing these down, let's just do it in a way that takes into account those employees of those businesses, the banks that loaned on those projects and make sure we have business certainty."
Outside analysts say businesses are already feeling the impact. E2, a nonpartisan, pro-environment business group, has been tracking clean energy project announcements and jobs for over two years. The group's executive director, Bob Keefe, told NPR the market began responding before the House legislation was even written.
"Since January alone, we've seen $14 billion worth of new factories and other projects — clean energy, electric vehicle related plants, solar projects, wind projects, battery projects — $14 billion worth of business investment canceled in America because of the uncertainty over this bill," he said.
E2 estimates more than 10,000 announced jobs have been canceled because of concerns over the House bill.
"The House just pulled the rug out from all of those businesses who had been already investing and planning for this by saying that these tax credits were going to get repealed. And so, quite naturally, businesses are pulling back," Keefe said, noting the biggest states for clean energy projects are red states. "If the Senate doesn't fix it, our economy is going to suffer."
Group of House Republicans also wants changes
Senators aren't only hearing from industry leaders, they're also hearing from Republicans in the House.
"We had some good conversations with a handful of senators and have been having ongoing conversations," said Rep. Rob Bresnahan, R-Pa., who wants to see the Senate make adjustments to the House bill he voted for.
"The energy credits are very big for northeastern Pennsylvania," he told NPR. "I'm OK with the phase out, but giving enough runway for projects that have already been committed and pledged to be completed before having the rug ripped out from essentially underneath them."
Bresnahan is one of 13 Republican House members who sent a letter last week to Senate leadership, urging the chamber to "substantially and strategically improve our clean energy tax credit provisions" from the House-passed bill.
The group lists concerns about restrictions of transferability of some credits, the 60-day time limit for enacting projects and other issues.
"This approach jeopardizes ongoing development, discourages long-term investment, and could significantly delay or cancel energy infrastructure projects across the country," the letter reads. "Without a clear signal from Congress encouraging continued investments and offering business certainty as these provisions are phased out, project cancellations will continue to snowball."
Senate Finance Committee ranking member Ron Wyden, D-Ore., said he's optimistic that progress is being made among his GOP colleagues.
"What I'm doing is going literally senator by senator to those who support innovation or are concerned about not jacking up prices and understand that clean energy helps to create more competition and choice, which is a kind of Republican idea," Wyden told NPR.
But changes passed in the Senate would require approval in the House, and any major adjustments could jeopardize the delicate balance of support that allowed GOP leaders to force the bill through last month. House Speaker Mike Johnson, R-La., has repeatedly warned senators to tread lightly when it comes to changes in the bill.
Members of the far-right House Freedom Caucus have specifically called out clean energy incentives as a red line for their members.
"We want to be crystal clear: if the Senate attempts to water down, strip out, or walk back the hard-fought spending reductions and IRA Green New Scam rollbacks achieved in this legislation, we will not accept it," the group said in a statement.
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