The One Big Beautiful Bill Act is generally a boon for American energy independence, consumer choice and grid security, but the Trump administration ought to strengthen it by limiting a key loophole in its text, argues a new report from the Institute for Energy Research (IER).
The new report, first provided to the Daily Caller News Foundation, outlines how the Treasury Department could aggressively clamp down on a loophole in the law for solar and wind projects that Trump alluded to in his Monday executive order, adding to the bill’s green energy subsidy reforms. Despite the last-minute Senate change that allows for green energy projects to receive tax credits if manufacturers pledge just 5% of their budgets by 2026, the reconciliation package signals a positive shift in U.S. energy policy in the aggregate, according to IER.
“I was disappointed that the Senate pulled a fast one on us at the eleventh hour,” President of IER Tom Pyle told the DCNF, though he noted that “in totality, it is a massive shift away from subsidizing intermittent, unreliable energy sources like wind and solar. … Depending on how the Treasury Department interprets legislation through guidance, we will see that it will be harder for wind and solar to continue to game the system like they have for decades.” (EXCLUSIVE: New Report Shows Benefits Of Trump Tax Plan Potentially Cutting Clean Vehicle Tax Credit)
The _One Big Beautiful Bill Act_ Represents a Sweeping Overhaul of U by audreystreb on Scribd
The green energy gambit in the One Big Beautiful Bill Act allows solar and wind projects to commit 5% of costs within 12 months to qualify as “under construction” and receive a four-year extension, according to IER. The Treasury Department can limit this loophole by altering the definition of “start construction,” to tighten the carveout in the law by requiring continuous construction and shorten safe harbor, the IER report states.
Former President Joe Biden established massive green energy subsidies and tax credits with his signature 2022 Inflation Reduction Act (IRA), which did not receive a single Republican vote.
Before Trump signed the reconciliation bill into law on July 4, he told Republicans that “we’ve got all the cards, and we are going to use them.” Several House Republicans said that Trump assured them he would use executive power to enhance the law and strictly enforce green energy tax credit phase-outs, which helped persuade some conservatives to back the bill. It is now up to the Treasury to enforce the phase-outs and the Department of the Interior (DOI) to review and revise policies under its jurisdiction that treat green energy preferentially.
Though the Senate caved on totally axing Biden-era wind and solar tax credits and instead adopted more generous phase-outs, it did benefit consumers by axing electric vehicle (EV) credits, according to IER.
The 10-year cost of federal tax expenditures for wind and solar have increased by a factor of 21 since 2015, according to IER. The report notes that the production and investment tax credits for solar, wind and other green energy technology were both enacted over 30 years ago, have been extended over a dozen times and were massively inflated by the IRA.
Solar and wind credits were set to make up over half of all energy-related federal tax expenditures from 2025-2034, according to the report, though that figure excludes EV tax credits, which were expected to reach $105.7 billion by 2034 before they were cut.
“It puts America in the driver’s seat for the future when it comes to affordability, reliability and the AI race. So, it’s a huge victory for common sense, back-to-basics energy policy, and we look forward to continuing to work with President Trump and Congress for the rest of his term,” Pyle told the DCNF. (RELATED: ‘Legally Dubious’: Biden-Harris Admin Set To Slap Tax On Methane Emissions)
Wind turbines operate at a wind farm near solar panels on March 06, 2024 near Palm Springs, California. (Photo by Mario Tama via Getty Images)
Additionally, the bill benefits the oil, gas and coal industries through easing burdens on companies, mandating some government land be used for mining and delaying the methane emissions fee until 2035, the IER report highlights.
“The methane tax was yet another example of punishing successful, domestic, homegrown energy,” Pyle argued.
The report hammers taxpayer-funded green energy technology, noting that wind and solar are notoriously expensive and cheapen grid reliability, which is already deteriorating as infrastructure ages and power plants are retired. It notes that the intermittent and unreliable nature of wind and solar is linked with skyrocketing energy costs, despite lobbyists and green energy advocates’ protestations.
“The threat of blackouts and brownouts has never been more pronounced than it is now today, after decades of this experiment of trying to replace dependable, reliable base load electricity generation with sources that only work when the wind blows and the sun shines,” Pyle said. Wind and solar advocates “keep claiming that they’re [green energy resources] low cost and affordable and the cheapest form of electricity, but at the same time they keep fighting and spending millions and millions of dollars to preserve their tax credits and their subsidies and their giveaways. So, which is it?”
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