The “Big Beautiful Bill” threatens the renewable transition if not revised in the Senate, as it targets the technologies Americans count on to protect the climate.
While the Republican Coalition has appeared to be anything but reliable, if approved, the budget reconciliation now being considered by the US Senate could have a number of serious immediate impacts. Cost-cutting was a guiding principle for the “Big Beautiful Bill” (BBB) that squeaked through the House in May and went to the Senate for review, potentially by July 4.
While a great deal of attention has been paid to the proposed cuts to Medicare and other government programs, some observers are specifically focusing on the bill’s attention to energy. As approved by the House, the BBB marks a significant shift in the federal approach to stimulating the market for energy.
Energy Transition Guidance From the Top
Particularly through its work on the 2022 Inflation Reduction Act, the Biden-Harris administration’s policies promoted over $1 trillion in private investment in clean energy, semiconductors, and advanced manufacturing. The Inflation Reduction Act resulted in the most significant effort in American history to use governmental policy to stimulate and support an energy transition from fossil fuels.
A primary detail of the governmental approach was the federal support of grants and tax benefits that stimulated the construction of renewable power structures, such as solar panels, on businesses and homes. Additionally, federal benefits spurred the purchase of electric vehicles (EVs), including by private consumers. This was also supported by federal support to upgrade the electric grid and charging stations. Across the economy, the federal government used its resources to stimulate modernization of the energy market.
Many observers have argued that strengthening America’s renewable energy sector with policies that encourage the expansion of relevant technology keeps the nation competitive and promotes economic prosperity. Yet the Trump administration has cast Biden’s successes as “climate extremism.” While the Trump administration has deemed that its own policy will unleash “…America’s affordable and reliable energy and natural resources…” to “restore American prosperity…,” it uses a template of fossil fuel extraction perfected in models of previous eras of energy use.
The Atlantic reported that in a meeting with top energy executives during the 2024 presidential campaign, Trump assured them that if his opponent was elected, the industry would be “f—ed.” It is estimated that in response, the industry donated more than $450 million to support Trump’s 2024 election. In addition to overt initiatives, such as Trump’s call to “Drill, Baby, Drill,” that would spur energy development, there are more subtle efforts that seek to undercut the foundation of the Biden-Harris belief that federal initiatives might assist in encouraging a transition from fossil fuels. For instance, as part of a wholesale change in approach, the BBB seeks to discontinue many of the initiatives that support renewables.
Big Beautiful Bill’s Hidden Energy Strategy
As it now stands, the BBB would “slow renewable energy deployment and manufacturing over the next ten years,” say many analysts. According to Governing’s Cal Smith, the bill proposes “taking back unobligated clean energy funds from Inflation Reduction Act programs, eliminating tax credits for clean energy development and manufacturing, and imposing new registration fees for owners of electric and hybrid vehicles.” While the bill is likely going to be greatly revised in the Senate, as the Senate parliamentarian has ruled against certain Medicare cuts, its impact on the energy sector can help to shed light on this administration’s priorities.
Observers group the BBB’s proposed impact on energy markets into these broad categories:
- Climate: The entire spirit and ethic of BBB initiatives is meant to reject any emphasis on or acceptance of climate change, particularly efforts to mitigate or adapt to a less carbon-intensive energy marketplace.
- Renewable Energy: Estimates run that the BBB would cut new construction of solar and battery installation by at least twenty percent. The efforts at new construction would be particularly impacted by the restrictions placed on the use of materials constructed abroad.
- Efficiency and EVs: For vehicles, the bill would not only repeal tax credits for electric cars, trucks, and chargers, but it also would impose a federal $250 annual fee on vehicles, on top of any state fees. Combined, the lost credits and increased fees could “cut projected US sales of electric vehicles by forty percent in 2030.”
- Nuclear energy: For new nuclear plants, the bill would move up the deadline to 2028 to begin construction. According to one critic, “That deadline is too soon for some new reactor designs and would rush the vetting of others.”
- Biofuels: The bill would spend $45 billion to extend tax credits for biofuels such as ethanol and biodiesel.
- Hydrogen: The bill would end tax credits for hydrogen production. This would likely end the effort for “hydrogen hubs” that was funded under the Bipartisan Infrastructure Law of 2021, as well as a variety of other initiatives that had been organized around hydrogen made from natural gas with carbon capture.
An Overall Ethic to Extend the Energy Status Quo with Fossil Fuels
By design, the BBB is set to upend the previous advancements that allowed for a clean energy transition within the United States to seem realizable. With fewer efficiency improvements, fewer electric vehicles, and less clean power on the grid, analysts are projecting that American households would pay approximately $415 more per year in energy bills by 2035 over what would have been the case if BBB was not enacted. Also, by 2035, the BBB would increase gas emissions by one billion tons.
Although few observers expected the Inflation Reduction Act initiatives to remain intact, the proposed BBB cuts are targeting the technologies Americans count on to protect the climate and to save consumers money.
About the Author: Brian C. Black
Brian C. Black is Distinguished Professor of History and Environmental Studies at Penn State Altoona and author, most recently, of Ike’s Road Trip: How Eisenhower’s 1919 Convoy Paved the Way for the Roads We Travel. (Godine, 2024). ENERGY TRANSITION 2025 is an ongoing series to place details of our current energy shift into historical context.
Image: Shutterstock/Jack_the_sparow
