Solar and wind excise tax dropped from Senate GOP megabill

Senate Republicans on Tuesday abandoned their effort to impose new taxes on solar and wind energy.

Text released by the Senate Rules Committee no longer includes a new tax on solar and wind projects if some of their components come from China. 

The excise tax had been a last-minute addition to the bill and was made public over the weekend. Many in the industry had warned it could kill future projects.

The removal of the last minute provision comes as Republicans struggled to keep their coalition together — and particularly sought to secure the vote of Sen. Lisa Murkowski (R-Alaska).

Murkowski, along with Iowa Republican Sens. Joni Ernst and Chuck Grassley, offered an amendment to remove the tax and loosen the phaseout of the tax credits.

The Rules Committee draft, unlike their amendment, does still impose a relatively sharp phaseout of the solar and wind energy credits, saying that projects that are not already producing electricity by 2028 will not qualify.

An earlier Senate draft was more lenient, saying that companies that start constructing projects by 2028 should get at least partial credit.

Sen. John Curtis (R-Utah) told reporters that removal of the excise tax also helped to ensure his support. 

Curtis said that when the tax was inserted over the weekend, he felt, “I have to have some changes.”

He said he now believes “we landed in the exact right spot.”

Curtis’s office said he helped secure some additional safeguards for low-carbon energy sources, including a provision that allows any solar or wind project that begins construction in the next year to get the full value of the credit – regardless of when they begin producing electricity.

Like in previous Senate iterations of the bill, the new one still has limits on how much of a project can come from China if it wants to claim the subsidies.

The energy provisions have been a significant point of contention among Republicans. The House version contained an even stricter provision requiring projects to start construction within 60 days of the bill’s enactment in order to qualify for the credit. 

It’s not entirely clear whether the provisions in the Senate version go far enough to satisfy conservatives in the House — some of whom have said they will resist any changes that water down their cutbacks to clean energy subsidies.

Meanwhile, Democrats slammed the package as raising energy costs and worsening climate change.

“Trump’s Big, Beautiful-for-Billionaires Bill is one massively destructive piece of legislation,” said Sheldon Whitehouse (D-R.I.) in a written statement.  “It saddles our children and grandchildren with trillions and trillions of dollars in debt – all to serve giant corporations, fossil fuel polluters, and billionaire Republican megadonors who are already among the richest people on the planet.”

Aris Folley contributed. Updated at 3:12 p.m. EDT.