Press Releases

ICYMI: GOP Tax Proposal a “Back-Door Repeal” of Climate Law

Press Contact: Seth Nelson

Earlier today, the House Ways and Means Committee released its portion of the GOP’s spending plan designed to bankroll even more tax breaks for big corporations and billionaires. According to a new Heatmap News analysis, the Republican proposal on the clean energy tax credits “appears to amount to a back-door full repeal of the climate law.” Their plan would torch the clean energy tax credits fueling a nationwide manufacturing boom—effectively halting new projects before they can even get off the ground. As written, the bill represents a full-scale assault on America’s clean energy economy and climate progress.

ICYMI: Heatmap News: The House GOP Tax Proposal Would Effectively Kill The IRA

By: Emily Pontecorvo
May 12, 2025

  • The House Ways and Means Committee, which oversees tax policy, released its initial proposal to overhaul the nation’s clean energy tax credits on Monday afternoon.

  • Here’s a rundown of the tax credit proposal, which, at first glance, appears to amount to a back-door full repeal of the climate law.

  • The GOP has proposed an early phase-out of the technology-neutral production and investment tax credits, which subsidize zero-emissions power generation projects including wind, solar, energy storage, advanced nuclear, and geothermal. It also proposed significant changes for the years they remain in effect.

  • Under the GOP proposal, both credits would start to phase down in 2029, and new projects would no longer be eligible for either credit beginning in 2032.

  • The proposal also cuts out a key provision that would have grandfathered many more projects into the tax credit. Under current law, a project only has to start construction within a certain year to qualify for that year’s tax credit amount. The draft text changes this, requiring a project to be “placed in service” before 2032 in order to qualify.

  • “Transferability” supercharged the nation’s clean energy tax credits by allowing project developers with low tax liability to sell their credits to another entity that stood to benefit from them. The provision channeled new capital into the climate economy as corporations looking to reduce their tax liability began scooping up tax credits, indirectly helping to finance clean energy projects.

  • It also helped lower the cost of wind and solar, as developers could earn a premium on tax credits compared to what they got for tax equity transfers, because the whole transaction was cheaper to do. The proposal would get rid of this option across all of the tax credits beginning in 2028.

  • The draft text would also terminate the clean manufacturing credit (45X) in 2032 — one year earlier than under existing law. Wind energy components such as blades, towers, and gearboxes would lose their eligibility sooner, in 2028.

  • The text proposes repealing three tax credits for residential energy efficiency improvements at the end of 2025.

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