GOP Senate Bill Favors Nuclear, Geothermal Over Wind and Solar

Senate Republicans Propose Changes to Reconciliation Bill

Following the House of Representatives' passage of their reconciliation bill last month, Senate Republicans unveiled their version on Monday evening.

The proposed language from the Senate Finance Committee significantly alters aspects of the renewable energy-focused Inflation Reduction Act (IRA), while leaving other provisions untouched.

Impact on Renewable Energy Sources

Solar, wind, and hydrogen technologies are projected to experience the most substantial effects. Conversely, geothermal, nuclear, hydropower, and long-duration energy storage are expected to remain largely unaffected.

Carbon capture initiatives fall into an intermediate category, receiving modified treatment.

Changes to Tax Credits

Senate Republicans are aiming to terminate residential solar tax credits quickly, establishing a 180-day window following the bill's enactment for individuals to submit claims.

Solar leasing companies would be disqualified from receiving any credits, further impacting the residential solar market.

Commercial wind and solar incentives would have a longer timeframe, though less extensive than those provided under the IRA, which extends through 2032.

Projects initiating within six months of the bill's signing would qualify for the full credit.

Those commencing construction in 2026 would receive 60% of the credit, and in 2027, 20%. The credit would then be eliminated.

Hydrogen and Carbon Capture Adjustments

Hydrogen tax credits would be scheduled to expire this year, aligning with the House-passed version.

This presents an additional challenge for hydrogen startups, which have already faced policy instability.

While carbon capture was not eliminated, the details would be altered.

Currently, the 45Q tax credit differentiates between carbon uses, offering less funding for enhanced oil recovery.

The Senate GOP’s proposal removes this distinction, making all carbon capture projects eligible for equal incentives.

Other Technologies and GOP Priorities

Nuclear, geothermal, and hydropower technologies would receive a slight extension in the phase-out of tax credits.

Projects beginning construction in 2033 would be eligible for the full credit, a one-year extension compared to the IRA.

The credit would then phase down to 75% in 2034, 50% in 2035, and expire in 2036.

These changes largely reflect the GOP’s stated goals of limiting wind and solar energy while supporting nuclear and geothermal power.

The inclusion of support for long-duration energy storage was unexpected.

If retained, this could indirectly benefit wind and solar by enhancing their reliability as 24/7 energy sources.

Next Steps

This bill is not yet final and cannot be signed into law by President Donald Trump in its current form.

It must first be approved by the Senate parliamentarian before being sent to the House of Representatives.

The House has established a deadline of July 4th for passing the complete package.