Most of my writing is concentrated on policy and politics, which go hand-in-hand relatively well. So over the past few months, it was difficult to ignore the presence of the One Big Beautiful Bill Act’s (OBBA) passage, which is a landmark piece of now-law that affects every single aspect of our lives. From lower taxes, to increased spending on the military, and clean-energy subsidies- wait, what? Yes, there are numerous changes to tax credits for renewable energy sources in the law. The precedent for many “green” was founded in the Inflation Reduction Act of 2022, a hallmark bill pushed by many lawmakers on Capitol Hill. The act prioritized phasing out the usage of fossil fuels in return for countless tax credits that were meant to bolster Americans to adopt sustainable technology. The IRA expanded the Investment Tax Credit and Production Tax Credit, created a new tax credit to encourage the usage of electric vehicles, and enabled hundreds of billions of dollars in loans towards clean-energy infrastructure. In the end, the Inflation Reduction Act passed virtually among party lines in both the House and the Senate. The Democrats got their hope: directing billions of dollars towards the public and private sector would likely lead to more Americans utilizing sustainable energy, thus diminishing the need for fossil fuels. Long term, that vision was somewhat steady but slow, and the Republicans capitalized the law as leading towards higher prices at the pump and an example of perceived reckless spending. So come a Republican president, House and Senate, and many of the same GOP legislators sought to undo the recently enacted policies. The list of terminated policies is long:
- New, Commercial and Used Vehicle Credits, by September 30th, 2025.
- Energy Efficient Home Improvement Credit, by December 31st, 2025.
- Residential Clean Energy Credit, by December 31st, 2025.
- Clean Energy Investment and Production Credits, some phased out between 2026 and 2028.
- Third party arrangement for solar, wind and hydro projects, disallowed under the OBBBA.
- Alternative Fuel Vehicle Refueling Property Credit, for any property placed in service after June 30th, 2026.
- New Energy Efficient Home Credit (45L), by June 30th, 2026.
- Clean Hydrogen Production Credit, with construction deadlines applicable for the credit moved to December 31, 2027.
- And much, much more…
Republicans have claimed these Biden-era policies have spent too much without delivering results, but the argument has mostly focused on the perceived ‘leftism’ of climate change. On the other side, Democrats condemn the reversals as pampering towards big oil, special interests while ignoring the reality of climate change. Perhaps the most neutral argument regarding the phase-out is the effect it will have on energy costs, and the long term action to combat the omnipresent effect of global warming. Short term, the IRA did not lower energy costs in many states, as prices for certain utilities actually increased. Long-term, however, there is a different story. Prior to the OBBBA, the Department of Energy (DOE) projected that American families would put away over $38 billion in their pockets by 2030, while the Rhodium Group predicted savings of roughly $112 in energy bills per household by the year of 2030. From a sustainability perspective, the Inflation Reduction Act was a dream come true. Most independent models reached the conclusion that the IRA would lower carbon emissions by nearly 42% below 2005 levels by 2030, which would amount to nearly ⅔ of the carbon emission decrease pledged by the United States in the Paris agreement. Clean energy would comprise nearly 80% of U.S. energy by the end of the decade, which would lead to less blackouts, pollution, land conflicts, and inevitably fossil fuel consumption. Matters aside, energy credits for new projects, spanning from housing to solar fields, balanced various categories in mind that were intended to benefit the average working American. Not to mention, the IRA created more than 400,000 well-paying, government jobs from Alaska to Florida. 10,000 clean energy jobs have already been terminated, and groups like Energy Innovation foresee that the number will likely rise to a net loss of 840,000 following the current trajectory by the year 2030. Not only are many Americans denied the right to good paying jobs, but add unto that increasingly expensive utility costs in addition to higher costs due to tariffs, and millions of Americans is set up for failure due to the ignorance of the current administration. On the left, the Inflation Reduction Act of 2022 was simply viewed by many as a common sense ship meant to sail into the future with a set path for sustainability and reduced emissions. That, however, is not the priority of the current leadership in both the executive and legislative branches, and the effects of those priorities remain to be seen.
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