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The Senate’s more flexible approach to rolling back green energy subsidies is putting the upper chamber on a collision course with the conservative House Freedom Caucus.
The Freedom Caucus, a powerful right wing bloc, has said it will “not accept” any changes that “water down” the dramatic cuts to the tax credits passed by the House.
And while draft legislation from the Senate this week does still deliver significant reductions in these subsidies, at least one key Freedom Caucus leader is already saying it’s not good enough.
“Yeah, I will not vote for this,” wrote Rep. Chip Roy (R-Texas) in a post on X, referring to the Senate bill’s tax credit provisions.
With the House version of the bill passing by just a one-vote margin, any further fractures in the lower chamber could jeopardize the bill’s future.
Both Senate and House moderates have argued that the House bill goes too far in its repeal of the Biden-era tax credits for climate-friendly energy sources.
Despite the push from House moderates, Roy and his Freedom Caucus colleagues successfully pushed the bill rightward in the lower chamber.
It’s not entirely clear who would win out between the House conservatives and the Senate moderates who have themselves warned against a “full scale” repeal of the credits.
The issue is one of several that threatens to hold up passage of President Trump’s “big, beautiful bill.” GOP gulfs over Medicaid and federal tax deductions in areas with high state and local rates also persist.
The House took a sledgehammer to the green energy tax credits, including by stating that only renewable projects that begin construction within 60 days of the bill’s passage would remain eligible.
The Senate version extends this timeline, allowing projects that begin construction this year to get full credit while projects that start construction next year would get 60 percent.
It also axes House language that would have required energy projects to start producing electricity by the end of2028 to get the credit.
Freedom Caucus member Rep. Josh Brecheen (R-Okla.), also raised concerns about the changes in a text to The Hill.
He cited analysis from fossil fuel advocate Alex Epstein, who said on X that basing the credit solely around a project’s construction rather than energy production could mean that companies are able to claim the credit for years longer, including after President Trump’s term is up.
Brecheen said he’s “hopeful those in [the] Senate and the American people realize over 10 different times since 1992 …Congress promised to phase out the Production Tax Credit, and every time Congress has not kept [its] word,” referring to one of the tax credits for low-carbon energy sources.
“We have to ensure we do this while President Trump is president to ensure it happens. Any promise to end beyond his term as president will turn out to be a mirage,” he added.
While conservative Republicans have sought as drastic as possible cuts to the incentives for climate-friendly energy sources, their more moderate counterparts have argued that doing so could be disruptive for U.S. companies that are trying to make investments in domestic energy production.
Sen. Thom Tillis, who was part of the group that called for a “targeted, pragmatic approach to the credits,” told E&E News this week that he was “generally satisfied” with what the Senate put together.
The language in the Senate bill is still expected to represent a massive cut to green subsidies, just not as dramatic a cut as in the House.
“The Senate Republican bill does almost 90 percent…as much damage as the House proposal did,” said Sen. Ron Wyden (D-Ore.), the architect of the tax credits Republicans are now seeking to dismantle, during a Tuesday webinar.
“Let’s not get too serious about this new Senate bill being a kinder, gentler approach,” he said. “Projects all over the country are being canceled.”
Trade groups representing renewable energy companies also said that the legislation would still significantly harm the renewables sector.
“Despite modest improvements on several provisions, this legislation does not go far enough to remove the threat to one of the greatest economic success stories in American history. As drafted by the Senate Finance Committee, this proposal would pull the plug on homegrown solar energy and decimate the American manufacturing renaissance,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, in a written statement.
—Mychael Schnell contributed.
