HEADLINE: “Green Energy Provisions In The One Big Beautiful Bill Act: Unfortunately, A Mixed Bag” By Francis Menton
“On July 4 President Trump signed what everyone is now calling the “One Big Beautiful Bill Act.” (Doesn’t it cease being a “Bill” when it becomes an “Act”? Not this one, apparently.).”
Manhattan Contrarian
Green Energy Provisions In The One Big Beautiful Bill Act: Unfortunately, A Mixed B
On July 4 President Trump signed what everyone is now calling the “One Big Beautiful Bill Act.” (Doesn’t it cease being a “Bill” when it becomes an “Act”? Not this one, apparently.). The Act is a compendium of dozens of provisions relating to all aspects of the federal budget and taxation. As a result, many summaries that you may have read focus on things like income tax rates and deductions, and other such matters directly relevant to individuals. That leaves some other important subjects of the Act getting short shrift, particularly the provisions dealing with various aspects of the ongoing green energy scam. So I will try to hit the highlights on that subject here.
I previously had a post on May 24 covering the provisions on this subject in the version of the Bill that had just been passed by the House. That post was highly optimistic that the House’s language, if it could survive wrestling with the Senate, could essentially put an end to almost all of the green energy subsidies. Unfortunately, as you might expect from the swamp of Washington, the final language will likely let some of the scam continue.
But let’s start with the positive news. For your reference, in case you want to read the actual provisions of the Act, here is a link to the Table of Contents, with ongoing links to each section.
Rescission and repeal of green energy handouts from the Inflation Reduction Act
The fraudulently-named Inflation Reduction Act of 2022 contained more than twenty open-ended handouts to various sorts of programs supposedly related to decarbonization of the economy and saving the planet. Most this was to be administered by the EPA, representing a vast expansion of its prior mission. These grant programs were generally structured like open-ended entitlements, so that nobody could know the total amounts that would actually get spent in the end. These were essentially unlimited slush funds for left-wing activist groups. Estimates of the ultimate spend under these programs ranged into the trillions.
Title VI of the OBBBA goes through these things one by one and rescinds or repeals them. There are some twenty-four sections, from 60001 to 60024, providing for the rescissions. To give you just a smattering: Section 60001 rescinds funding for “clean heavy-duty vehicles”; section 60002 rescinds a “greenhouse gas reduction fund”; in section 60003 it’s funding for “diesel emissions reductions”; in 60005, it’s “air pollution in schools”; 60006 rescinds funding for the “low emissions electricity program”; in 60010 it’s “greenhouse gas corporate reporting”; etc., etc., etc.
In each case, the language of the OBBBA limits the rescission to “unobligated balances.” E.g., “The unobligated balances of amounts made available to carry out section 132 of the Clean Air Act (42 U.S.C. 7432) are rescinded.” (That’s the one that relates to heavy-duty trucks.). In other words, the statute unfortunately does not touch the “gold bars off the Titanic” extravaganza that took place in the closing weeks of the Biden administration. However, current EPA Administrator Zeldin and the Department of Justice may well have remedies available for some of the most abusive spending, even if supposedly already “obligated.”
Repeal and termination of tax credits
Title VII of the OBBBA is where we find the tax provisions. Chapter 5 of that is headed “Ending Green New Deal spending, promoting America-first energy, and other reforms.” Subchapter A is then headed “Termination of Green New Deal subsidies.” And there then follows a long list of tax credits and benefits getting terminated. Unfortunately, none of them gets terminated immediately; but many get terminated expeditiously.
For example, there’s Section 70502, “Termination of clean vehicle credit.” That amends another statute making the “clean” (electric) vehicle tax credit available until December 31, 2032, and replaces that date with September 30, 2025. That’s less than three months from now. You can see why Elon Musk is so upset.
There are varying dates for different credits getting terminated. For “residential clean energy credits” (e.g., putting solar panels on your roof), the date moves up from December 31, 2034 to December 31, 2025 — less than six months away. The new termination date for the “energy efficient home credit” moves up from 2032 to December 31, 2026 — now we’re talking a year and a half. The new termination date for the “new energy efficient home credit” is June 30, 2026.
But now let’s get to the big money — the tax credits that subsidize wind and solar electricity generation facilities. Here, unfortunately, the OBBBA falls short. As discussed in my May 24 post, the House version of the Bill provided for an effective ending of the massive tax subsidies to these projects by leaving only a 60-day window to commence construction, and a required “in service” date of 2028. The 60 day window to commence construction was particularly significant, because the program would be effectively ended before any more legislation to extend the deadlines could be making its way through Congress.
Well, now the period to commence construction on a qualifying wind or solar project has been extended until a year after enactment of the legislation. The “placed in service” date has supposedly been accelerated to December 31, 2027 (Sections 70511 and 70512), but energy analyst Alex Epstein points out that this is likely illusory:
[U]nder [a] last-minute carveout [inserted into the Bill], Big Green has 12 months to initiate as many subsidized projects as it wants using the insanely-easy-to-meet "construction" threshold. (All you need to do is commit 5% of expected project cost to buying re-sellable assets like solar panels.) Once they declare "construction"—e.g., in July 2026—they'll have 4 years (e.g., July 2030) to "place in service." And then some of those projects, e.g., most wind projects, will get 10 years of subsidies.
These tax credits are something that a taxpayer can qualify for by meeting the tests of the statute, without need to apply for some grant from an executive agency. In other words, there may be little or nothing that Trump can do to stop this.
So unfortunately, the bottom line is that the OBBBA is a mixed bag in terms of getting rid of outrageous subsidies for useless wind and solar generation. Big wind and big solar have lived to fight another day. It remains to be seen whether there will be another chance to try to get rid of these tax breaks during Trump’s term.
I’d like someone on Congress or staff to name names as to who slipped these last-minute changes into the Act.