On July 3, 2025, the U.S. Congress passed the “One Big Beautiful Bill Act” (OBBBA), a sweeping tax and spending package championed by President Donald Trump. While the legislation includes significant tax cuts and increased funding for defense and border security, it also dismantles key provisions of the 2022 Inflation Reduction Act (IRA), particularly those promoting renewable energy. Environmental groups warn that these rollbacks could hinder progress toward reducing carbon emissions and combating climate change.
The OBBBA accelerates the phaseout of tax credits for wind and solar projects, ending incentives for projects that begin construction after June 2026 or are placed in service after 2027. Electric vehicle (EV) tax credits are set to expire by September 2025, and credits for EV charging infrastructure will end by June 2026. Additionally, the bill postpones the implementation of methane emissions fees for a decade and introduces new subsidies for fossil fuels, including expanded oil and gas leases and revived coal leasing.
Critics argue that these changes will have far-reaching consequences for the renewable energy sector. According to the Solar Energy Industries Association, the IRA had spurred over $843 billion in announced investments, with more than $321 billion already allocated. The rollback of tax credits threatens to stall numerous energy projects across the nation, potentially leading to job losses and increased energy costs.
Labor unions and environmental organizations have expressed concern over the bill’s impact on employment and economic growth. Carly Ebben Eaton, Wisconsin Policy Manager for the Blue Green Alliance, stated that the legislation “will kill economic growth and jobs, raise energy prices, and cede clean energy technology manufacturing to other countries.” In Wisconsin alone, clean energy tax credits have supported more than $8.6 billion in private investments.
The bill’s provisions also affect educational and public institutions. A new middle school under construction in Menasha, Wisconsin, had planned to include solar panels and energy storage, with the district expecting a $3 million reimbursement through the IRA’s direct pay program. With the repeal of this provision, such projects may face financial uncertainty.
Industry leaders have voiced their opposition to the bill. Elon Musk, CEO of Tesla and SpaceX, criticized the legislation as “utterly insane and destructive,” warning that it would damage future industries in favor of outdated ones. He emphasized that the cuts to renewable energy tax credits directly affect Tesla’s $2.7 billion energy generation and storage business.
Despite opposition, the bill passed the House with a narrow 218-214 vote and the Senate with Vice President JD Vance casting the tie-breaking vote. President Trump is expected to sign the bill on July 4, solidifying its provisions into law. Supporters argue that the legislation fulfills campaign promises and promotes investment, while critics contend that it favors the wealthy and undermines efforts to address climate change.
As the U.S. shifts its energy policy, the rollback of renewable energy incentives raises questions about the nation’s commitment to combating climate change and maintaining leadership in the global clean energy sector.
