The Republican-led bill signed by Donald Trump on July 4, 2025, has cut subsidies for renewable energy sources, such as wind and solar power, batteries, electric cars, and home efficiency improvements. This move will lead to higher costs for Americans, as the country continues to burn more fossil fuels despite strong public and scientific support for shifting to renewable energy.
Wind and Solar Power: A Game-Changer for Renewable Energy
Wind and solar power have become the fastest-growing sources of new electricity globally, providing over 90% of the new electricity added nationally and internationally in recent years. Natural gas turbines are in short supply, and nuclear power plants take years to build. Wind and solar energy projects, paired with batteries, offer the fastest way to meet growing power demand. Recent technological breakthroughs have made geothermal power on the verge of rapid growth. However, the One Big Beautiful Bill Act has rescinded billions of dollars in funding for renewable energy and battery manufacturing. Tax credits for factories that manufacture equipment for renewable energy and electric vehicles will be phased out, disrupting the domestic manufacturing boom stimulated by the Inflation Reduction Act.
Accelerating the Phaseout of Renewable Energy Tax Credits
• The bill accelerates the phaseout of tax credits for factories that manufacture equipment needed for renewable energy and electric vehicles. • This will disrupt the boom in domestic manufacturing projects that had been stimulated by the Inflation Reduction Act. • To receive any tax credits, wind and solar farm projects will need to commence construction by mid-2026 or come online by the end of 2027. • The act preserves a slower timeline for phasing out subsidies for nuclear, geothermal, and hydrogen projects, which take far longer to build than wind and solar farms.
Impact on Electric Cars and Home Efficiency Improvements
The bill cuts tax credits for electric vehicles, which will end on September 30, 2025. This means that other new cars will likely guzzle more gas. Tax credits for home efficiency improvements, such as heat pumps, efficient windows, and energy audits, will also end at the end of 2025.
Consequences for Homeowners and the Environment
• Homeowners will lose tax credits for installing solar panels at the end of the year, seven years earlier than under the previous law. • The bill also rescinds funding that would have helped cut diesel emissions and finance clean energy projects in underserved communities. • This will lead to higher energy costs for Americans, with Princeton University professor Jesse Jenkins projecting an increase of over $280 per year by 2035.
Support for Biofuels and Fossil Fuels
The bill provides significant support for biofuels, such as ethanol and biodiesel. It extends tax credits for these fuels, which will be spent on tens of billions of dollars. This move will increase the production of biofuels, which do little to combat climate change.
Impact on Land Use and Emissions
• The bill allows forests to be cut to make room for crops for biofuels, as it directs agencies to ignore the effects of biofuels on land use. • This will lead to increased greenhouse gas emissions and contribute to climate change. • The bill also opens more federal lands and waters to leasing for oil and gas drilling and coal mining, which will increase fossil fuel production.
Conclusion
The One Big Beautiful Bill Act is a harmful bill that will increase household energy costs and harm America’s climate. With fewer efficiency improvements, fewer electric vehicles, and less clean power on the grid, the bill will negate 470 million tons of anticipated emissions reductions by 2035. This move will leave America’s clean energy transition further behind China, which is deploying more solar and wind power and electric vehicles than the rest of the world combined. Daniel Cohan, Professor of Civil and Environmental Engineering, Rice University, notes that the bill is a nightmare scenario for clean energy proponents. However, one person’s nightmare may be another man’s dream. The bill’s supporters argue that it will constrain wind and solar, which is good for the environment. However, the facts speak for themselves. The bill will lead to higher energy costs for Americans, as the country continues to burn more fossil fuels despite strong public and scientific support for shifting to renewable energy. As an environmental engineering professor, I believe it is essential to distinguish between energy technologies that can rapidly cut emissions and those that are already profitable but harm the environment. The Republican bill favors the latter while stifling the former.
| Energy Source | Impact of the Bill |
|---|---|
| Wind and Solar Power | Rescission of billions of dollars in funding for renewable energy and battery manufacturing, phaseout of tax credits, and slower timeline for phasing out subsidies. |
| Electric Vehicles | Phasing out of tax credits, which will lead to higher energy costs and increased greenhouse gas emissions. |
| Home Efficiency Improvements | Phasing out of tax credits, which will lead to higher energy costs and reduced emissions. |
| Biofuels | Extension of tax credits, which will increase the production of biofuels and contribute to climate change. |
| Fossil Fuels | Increased subsidies, which will lead to increased fossil fuel production and higher energy costs. |
Definition of Terms
Renewable energy refers to energy sources that are replenished naturally and are not depleted by use, such as wind, solar, and geothermal power.
Non-renewable energy refers to energy sources that are depleted by use and cannot be replenished naturally, such as fossil fuels.
Carbon footprint refers to the amount of greenhouse gas emissions produced by an individual, organization, or activity.
Greenhouse gas emissions refer to the release of gases in the Earth’s atmosphere that trap heat and contribute to climate change.
