Headline:
Senate Megabill Stuns Clean Energy Sector With New Tax and Sudden Credit Rollbacks
Subheadline:
Wind and solar industries face rising costs, uncertain futures as Senate Republicans push through sweeping legislation targeting renewable energy incentives.
By Gorgeous Trends Staff Writer
Published: June 30, 2025
In a move that has sent shockwaves through the renewable energy sector, the U.S. Senate has advanced a sweeping legislative package—dubbed the “megabill”—that eliminates key tax incentives for wind and solar projects while introducing a controversial new excise tax on components linked to foreign suppliers, particularly China.
The bill, championed by Senate Republicans and endorsed by former President Donald Trump, effectively reverses many provisions of the 2022 Inflation Reduction Act (IRA), which had turbocharged investment in clean energy across the United States.
What the Bill Changes
Under the new Senate megabill, clean energy developers face several major setbacks:
- Immediate End to Clean Energy Credits: The bill repeals the popular Production Tax Credit (PTC) and Investment Tax Credit (ITC) for wind and solar projects unless they are “placed in service” before December 31, 2027.
- New Excise Tax: A new tax—up to 30% for solar and 50% for wind—will be levied on projects that use components from so-called “foreign entities of concern,” a term that targets suppliers with ties to China.
- Strict Supply Chain Restrictions: Starting immediately, new wind and solar projects must comply with strict sourcing rules to avoid penalties, forcing developers to overhaul their procurement strategies and potentially delay installations.
Industry and Market Reaction
The announcement has roiled the stock market. Solar companies including First Solar, Sunrun, and SolarEdge saw double-digit percentage drops last week. Analysts estimate the bill could raise project costs by 10% to 20%, causing delays or cancellations across the country.
“This bill is a direct assault on America’s clean energy progress,” said Abby Hopper, CEO of the Solar Energy Industries Association. “It jeopardizes billions in investments, tens of thousands of jobs, and our ability to stay competitive globally.”
Wind developers echoed the concern, with several warning that rural projects—often supported by bipartisan lawmakers—could now become financially unviable.
Political Tensions Brewing
While the bill sailed through the Senate Finance Committee, moderate Republicans including Sen. Lisa Murkowski (R-AK) and Sen. Thom Tillis (R-NC) have expressed reservations about its potential to drive up energy costs and stifle job growth.
Democratic lawmakers, meanwhile, called the bill a “reckless rollback” that prioritizes fossil fuels at the expense of climate resilience and energy independence.
The bill also contains generous tax incentives for nuclear, hydro, geothermal, and hydrogen projects, signaling a realignment of federal clean energy priorities.
What’s Next
The bill now heads to the full Senate floor for a vote expected in early July. If passed, it will proceed to the House of Representatives, where Democrats are expected to mount strong opposition and possibly propose amendments to soften its impact.
In the meantime, renewable energy developers are scrambling to assess how the proposed changes could affect ongoing and upcoming projects.
Bottom Line:
The Senate’s megabill marks a dramatic shift in U.S. energy policy, one that could reshape the renewable energy landscape for years to come. Whether this is a short-term political maneuver or a long-term restructuring of energy priorities remains to be seen—but the clean energy sector is already feeling the impact.
