What’s at stake for clean energy in the U.S.
Clean energy tax credits are driving investments across the country— but changes proposed by Congress will affect families and energy competitiveness
The United States is experiencing a clean energy renaissance. But the path forward is far from certain. Congress is making decisions right now on the budget reconciliation bill that will determine whether the country's clean energy boom will continue or if it will lose momentum.
Since August 2022, nearly 2,400 new clean energy facilities have opened across the U.S. From new projects adding much-needed electricity to the grid, to the raw materials and technologies that go into batteries and solar panels, these investments total $321 billion. Looking ahead, another $522 billion in announced projects are still in the pipeline.
Clean energy projects are expanding domestic energy supplies and contributing to American energy abundance. Supply chains are moving back to the U.S. and reinvigorating domestic manufacturing. This is creating new jobs and economic opportunities. The result? Lower costs for American households and cleaner air for people across the country.
Bottom line—clean energy helps our energy sector, our communities and American businesses that compete globally.
The catalyst fueling this new clean energy economy is a suite of federal tax credits that Congress passed in 2022. According to research recently commissioned by The Nature Conservancy, from now until 2032, these tax credits will support nearly $32.5 billion in annual economic value add, generate over $16 billion in wages and support more than 285,000 jobs annually.
Despite all the benefits these tax credits are delivering, their future is in jeopardy. These provisions are part of the budget reconciliation legislation, the “One Big Beautiful Bill,” that is making its way through Congress. When the budget discussions started a few months ago, some members of Congress suggested repealing all the tax credits in one swoop. In response to a groundswell of efforts from industry, investors and nongovernmental organizations, other representatives in the House and Senate publicly acknowledged the benefits that the tax credits are delivering for their constituents. Those members of Congress have signed multiple letters of support and are speaking in the press about more targeted changes instead of a full repeal.
Even with this critical mass of support, the budget reconciliation legislation that passed the House in May would make stark changes to the existing tax credits. If enacted, there would be significant impacts to a number of economic sectors:
Impacts to existing tax credits:
-
Industrial
Restrictions and limitations were added to tax credits supporting advanced manufacturing of clean energy components, such as solar panels and critical minerals, and carbon capture and storage that will make it difficult to utilize the incentives. The clean hydrogen tax credit would be repealed.
Dive Deeper
Explore the economic impacts of investments driven by the tax credits from now to 2032.
Learn MoreTNC worked with BW Research Partners to compare the economic impacts of the tax credits remaining in place as they are and if the House’s proposed changes become law. The results show a stark contrast. The repeals, earlier phase-outs and amendments would cut potential jobs over the next seven years by 64% and economic output by 58% across the country. We also took a deeper look at the impacts in ten states.
Jobs supported by clean energy tax credits
Expected change from House reconciliation-
Utah
- 22893
- 3971
-
Alaska
- 2575
- 483
-
Nebraska
- 9500
- 2255
-
West Virginia
- 6715
- 1603
-
North Carolina
- 66427
- 21287
-
Kansas
- 15409
- 6030
-
Louisiana
- 26079
- 10462
-
Ohio
- 76123
- 31695
-
Pennsylvania
- 87892
- 42873
-
South Carolina
- 42945
- 28029
Baseline
House Bill
Economic Research
-
BW Research ran two different scenarios:
- Baseline impacts if the tax credits remain unchanged.
- Impacts if the changes in the House reconciliation bill become law.
The results speak for themselves. Clean energy is critical to supporting American jobs and the economy.
These are serious costs that will fall on states and communities that are counting on new investments. The promise of the clean energy economy is at risk.
Currently, the Senate is debating adjustments to the House bill. The Senate Finance Committee recently released their portion of the reconciliation bill, which includes the clean energy tax credits. Overall, it does strike a more moderate tone than the House’s version, but some projects already in the pipeline could still be impacted. The Senate proposal still isn’t where we want it to be and represents the hard compromises that are a product of current political dynamics. If the proposal can’t be further improved, we hope that the Senate’s final bill will at least maintain everything in the Finance Committee’s current proposal, but we are still advocating to preserve even more of the existing tax credits.
Clean energy is our best path forward for achieving U.S. energy independence and staying competitive on the global stage. We hope the Senate recognizes this and works towards this shared goal.
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