Clean energy advocates are turning to the Senate after the big not so beautiful for clean energy bill narrowly passed the House on May 22, inching closer to what many say could kill jobs, increase energy bills and cripple renewable energy developments.

The nearly 1,100-page budget bill, also known as President Donald Trump’s “One Big Beautiful Bill,” essentially guts the Inflation Reduction Act (IRA). Former President Joe Biden’s signature climate law, coupled with the Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act), made hundreds of billions of dollars available in tax credits, loans and grants for renewable energy and low-carbon projects and initiated a clean energy boom in the U.S.

The budget bill rolls back many of the clean energy incentives. It accelerates the end of many IRA tax credits, including the technology-neutral clean electricity tax credits, to 2028.

Transferability, which enables owners of clean energy projects to sell and transfer tax credits to others in exchange for cash, is eliminated for most clean energy tax credits after 2027.

Also gone are several credits for clean vehicles, residential clean energy and commercial clean vehicles among others. The bill removes the 30% tax credit for taxpayers who install solar rooftop systems. It also rescinds unobligated funds provided by the IRA for various energy programs as many had expected.

In addition, the bill repeals and rescinds funds for programs focused on reducing emissions, encouraging states to adopt and implement greenhouse-gas and zero-emission standards for mobile sources.

Opponents argue the cuts could put energy security and jobs at risk. Proponents say eliminating the tax credits could lead to savings and potentially help lower debt as well as allow market forces to work without subsidizing certain industries.

House passage of the bill was applauded by the Independent Petroleum Association of America (IPAA).

“IPAA is pleased that the legislation reinstates oil and natural gas lease sales for onshore and offshore federal lands and makes common sense reforms to the permitting and leasing process on federal lands,” said IPAA President and CEO Jeff Eshelman said. “IPAA members, the small businesses of the oil patch, are grateful that industry tax treatments including intangible drilling costs and percentage depletion were protected, along with carried interest deductions being preserved.”

Eshelman expressed disappointment that the Methane Emissions Reduction Program and the methane tax weren’t fully repealed. The bill includes a 10-year delay of the program.

The program aims to lower methane emissions in the oil and gas sector by providing financial support for states to help oil and gas companies eliminate methane emissions from low-producing marginal conventional wells. Funding also goes to small oil and gas operators looking to utilize methane emissions reduction technologies.

The legislation’s passage in the House came as electricity demand in the U.S. climbs along with the potential for rising emissions. Many have said all forms of energy will be needed to meet rising demand.

“If Congress does not change course, this legislation will upend an economic boom in this country that has delivered an historic American manufacturing renaissance, lower electric bills, hundreds of thousands of good-paying jobs, and tens of billions of dollars of investments primarily to states that voted for President Trump,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA). “This unworkable legislation is willfully ignorant of the fact that deploying solar and storage is the only way the U.S. power grid can meet the demand of American consumers, businesses, and innovation.”

In a report released May 19, SEIA said the legislation could put nearly 3,000 U.S. solar and storage factories at risk, lead to the loss of 145,000 gigawatt-hours of solar generation by 2030 and result in nearly 300,000 current and future job losses.

“It’s not too late for Congress to get this right,” she said. “The solar and storage industry is ready to get to work with the U.S. Senate on a more thoughtful and measured approach to unleashing true American energy dominance to create a brighter future for all Americans.”

The latest version of the bill “shows a worse than feared scenario,” Jefferies analysts said in a note. Residential solar third-party originators (TPOs) appeared to be unexpected targets, as they are now prohibited from earning the 48E investment tax credit.

“This comes as a surprise especially considering how favorable the initial markup was to TPOs in pushing [residential] customers to opt into lease/PPA [power purchase agreement] contracts by repealing the 25D credit,” the analysts said, warning shares of solar companies such as Sunrun and Enphase could fall. They did.

Reuters reported Sunrun led the market rout, with shares falling nearly 41% in early morning trade, SolarEdge Technologies slid nearly 26%, Enphase Energy was down 17.7% and Complete Solaria fell over 15%. Shares of Maxeon Solar fell 9%, Emeren Group was down 5.2%, JinkoSolar dipped 4.7%, while First Solar and Canadian Solar dropped 5.4% and 6.4%, respectively.

The bill passed the House with a 215-214 vote that was mostly along party lines. One representative voted present and two others didn’t vote, including one Republican who fell asleep.

Michael Carr, executive director of the Solar Energy Manufacturers for America Coalition, said “a vote for this bill was a vote to close U.S. factories and concede manufacturing jobs of the most important energy resource of the 21st century to China.”

Republicans Thomas Massie of Kentucky and Warren Davidson of Ohio sided with Democrats in voting against the bill.

“This bill is a debt bomb ticking,” Massie said on the House floor. He added, “Under the taxing and spending levels in this bill, we’re going to rack up, the author’s say, $20 trillion of new debt over the next 10 years. I’m telling you it’s closer to $30 trillion of new debt in the next 10 years. Mr. Speaker, we’re not rearranging debt chairs on the Titanic tonight, we’re putting coal in the boiler and setting a course for the iceberg. If something is beautiful, you don’t do it after midnight.”

Last week, Moody’s downgraded the U.S. credit rating to Aa1 from Aaa, citing concerns about rising debt and failure to address rising fiscal deficits and interest payment ratios.

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