On May 22, 2025, Trump’s proposal for a “One, Big, Beautiful Bill” passed the House of Representatives with a narrow 215-214 vote. It now awaits review by the Senate within the next month or so. We will update this blog post when there have been updates on this matter.
Despite making its way through the House, a handful of government officials as well as many concerned citizens are worried about the potential implementation of this bill and its direct consequences on the clean energy industry, among other sectors of life. In this article, we discuss the implications of the “One, Big, Beautiful Bill” and its direct impact on the environment and solar industry.
The Bill From A General Perspective
Before getting into the nitty gritty of its environmental implications, it’s important to understand some of the other major components of the “One, Big, Beautiful Bill.” Included in its proposal are the following:
- A $4,000 standard tax deduction for people 65 and older
- Big adjustments to Medicaid
- A major increase in the deduction limit for SALT (state and local taxes)
- Changes in tax credits for those with children
- An increase in the U.S. debt ceiling
- And many other things…
Beyond these components, there are many other factors playing into the proposal of this bill, which you can explore further and understand more potential effects if you visit the following link: “Big Beautiful Bill” House GOP Tax Plan: Preliminary Details and Analysis.
Tax Credit Cuts Galore
The largest environmental impact within the bill comes with the suggestions of cutting countless clean energy tax credits.
What Are Clean Energy Tax Credits?
Clean energy tax credits are deductions of varying amounts from taxes for people who produce, buy, and lease forms of clean energy. This could include building wind turbines, buying solar panels, installing geothermal heating systems, or investing in electric cars. The range of possibilities is wide in terms of what discounts are available for committing to a cleaner, more sustainable lifestyle. These tax credits are meant to act as financial incentives to push more people away from fossil fuel-based energy, and, instead, in the direction of renewables. The subsidies were initially introduced in the Inflation Reduction Act (IRA) of 2022, with the goal of making U.S. interest in clean energy investments loud and clear.
Which Tax Credits Are Being Cut?
This “One, Big, Beautiful Bill” proposes the gradual phasing-out of nearly every federal clean energy tax credit available. The five major clean energy tax credit categories that are being cut are listed below.
- Clean Vehicle Tax Credits
Prior to the “One, Big, Beautiful Bill, those who purchase new electric vehicles would typically get a $7,500 credit, and those who purchase used electric vehicles would still ordinarily get a hefty $4,000. Even those who lease electric vehicles are usually eligible for this deduction as well. However, the “One, Big, Beautiful Bill” would eliminate all of these credits by the end of 2025, making it so that people get no compensation for moving away from gas/diesel-based cars.
- Energy-Efficient Home Improvement Tax Credits
This category of tax credits typically benefits homeowners who make an active effort to make sustainable improvements to their home features/appliances. Examples of this include the following:
- Investing in more efficient doors, windows, skylights, and insulation materials
- Purchasing more energy-efficient air conditioners, water heaters, furnaces, boilers, and heat pumps
- Buying a biomass stove or boiler
- Scheduling a home energy audit
Homeowners who make these upgrades are currently eligible for a 30% tax credit on up to a cost of $1,200 worth of improvements (larger amount for heat pumps and biomass stoves). The “One, Big, Beautiful Bill” would also get rid of these credits before 2025’s end.
- Residential Clean Energy Credits
Residential clean energy tax credits apply to people who are opting to purchase new, clean energy property for their homes. Examples of applicable properties include the following:
- Solar panels
- Solar water heaters
- Wind turbines
- Geothermal heat pumps
- Fuel cells
- Battery storage
Anyone who invests in these clean energy home projects are usually eligible for a 30% tax credit for the total cost. However, if passed, the “One, Big, Beautiful Bill” would retract these tax credits from existence by the end of 2025.
- Credits For Builders Of Energy-Efficient Homes
Any builder who makes improvements to an existing home or constructs a new home that is energy-efficient can typically receive up to $5,000 in tax credits per home. The basis of the house being built energy-efficiently would rely upon the same standards of energy-efficient home improvements. The “One, Big, Beautiful Bill” would abolish this credit as well.
- Credits For Producers/Manufacturers Of Clean Electricity
Ordinarily, any taxpaying owners/operators of new facilities containing energy storage-related technologies are eligible for a series of production/investment-related tax credits depending on how clean and efficient their facilities are. Upon a potential passing of the “One, Big, Beautiful Bill,” these tax credits would expire for projects in which construction of these facilities begins more than 60 days after this bill is passed, or if said project is not ready for service use by 2028.
Furthermore, the advanced manufacturing production tax credit has been in place for anyone who produces components of clean energy property in the United States. Some eligible components include the following:
- Solar energy components
- Wind energy components
- Inverters
- Electrode active materials
- Qualifying battery components
- Critical minerals
The “One, Big, Beautiful Bill” proposes a gradual phase-out of this tax credit, with builders not being eligible to receive this tax cut for constructing wind energy components after 2027, and for all other applicable components after 2031.
What Could These Cuts Mean For Our Environment?
The potential passing of the “One, Big, Beautiful Bill” would likely undo the work of the 2022 IRA, which aimed to lower energy costs, create new jobs in the clean energy industry, address pollution, and reward those who sought energy sources alternative to fossil fuels.
If this bill were to be approved, deincentivization would occur on many levels. First of all, producers/manufacturers of clean energy would be less financially motivated to create clean energy projects. In fact, it’s expected that these tax credit cuts could result in a 17% reduction in renewable construction. Furthermore, the possibility of clean energy projects getting cancelled because of new restrictions and lack of financial subsidies will grow, which could result in fewer workers in these industries.
Beyond just the builders, average homeowners would also be less financially motivated to purchase said clean energy properties, along with energy-efficient appliances and vehicles.
Between the reduction in clean electricity source-building and a removal of incentivized tax credits, electricity bills could also rise potentially by $70-$110 in the next five years, which no one wants.
Finally, a deincentivization of the clean energy industry would also naturally fuel a further incentivization of the oil and gas industries. It is important to note that fossil fuels already receive financial subsidies from the government, just not on the consumer-facing end. Those subsidies would remain in-tact under the “One, Big, Beautiful Bill,” and, with the reduction of clean energy subsidies, would be even further encouraged. This could result in more greenhouse gas emissions and further progression of the effects of climate change, which is exactly the opposite direction that we want to be headed.
What Are The Effects of the “One, Big, Beautiful Bill” On The Solar Industry?
If this proposed bill passes, the impacts on the solar industry could be major. The much-admired 30% Residential Clean Energy Credit, formerly known as the Federal Solar Tax Credit (ITC), would be eliminated by the end of 2025. This would likely disincentivize some potential customers from ultimately switching to solar. The tax credit cuts, of course, would also impact those who manufacture and install solar systems, and may disincentivize their work as well, which could result in solar industry jobs being lost.
Between lessened demands and possibly fewer workers, there are a lot of uncertainties within the solar industry over the next few years. However, that does not mean that solar is not the way to go. Despite potential tax cuts, solar remains one of the most effective forms of clean energy and people should still continue to buy it, if not for their own financial benefit, then at least for the good of trying to become more sustainable/save our struggling environment.
Go Solar Now!
With that being said, there is no guarantee that this bill will pass and, even if it does, the federal solar energy tax credit is still in place at least until the end of 2025. That just means that now, more than ever, is absolutely the time to go solar. By committing to this renewable source before 2025’s end, not only will you reduce your reliance on fossil fuels, but you will also still be eligible for your tax credit before it is potentially eliminated. It’s time to take advantage of this opportunity – the present moment is awaiting you.
Our professional team in Danvers, MA is available to help homeowners in Massachusetts, southern New Hampshire, and southern Maine. Call us or explore our website to schedule a solar consultation to discuss your home/personal needs, energy costs, aesthetic concerns, our top-of-the-line solar products, pricing, and more.
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