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We’re now a quarter of the way through the 21st century, and it’s indisputable that climate is one of the most important stories of our time. That’s our philosophy here at Heatmap, but just about everything around us illustrates it, too — from government policy and tech to movies and reality TV.
And of course — or maybe, especially — books.
It’s been about 17 years since the term “cli-fi” (or “climate fiction”) was first coined, and in the meantime, books that touch on climate themes in both fiction and nonfiction have taken off like the Keeling Curve. In 2025, we’ll be reading novels that imagine life in San Francisco after years of deluge and investigative reports into subjects such as how companies have gotten away with dumping forever chemicals into the environment for so long. There will be new natural histories to dive into — on the desert, forests, prairies, and even on the chemical compound CO2 — as well as new frames of thinking about climate change and how we approach its solutions.
Because so many 2025 books will touch on climate themes, I’ve set aside a section of honorable mentions at the end of this list that are also worth checking out. The division doesn’t indicate quality; I chose the primary 18 based on my subjective excitement and to showcase different genres, publishers, and authors. It might be in the appendix that you find a book on the topic you’re personally most excited about (Arctic exploration? Solar geoengineering? Florida-set family dramas?) for next year.
Finally, if you want to see all these books in one place or judge them by their (excellent) covers, you can browse our curated list on Bookshop here.
The U.S. government’s Fifth National Climate Assessment section on the Southwest reads like an apocalyptic horror story: “Heat-related mortality,” “increased wildfire risks,” and “longer and more severe droughts” all make it into the opening few paragraphs. The truth is that the hottest and driest region of the United States is home to 60 million people, many of whom will have to adapt to a more extreme future in the coming years. In New Mexico-born journalist Kyle Paoletta’s debut book, American Oasis, he traces the allure of places like Albuquerque, Phoenix, El Paso, and Las Vegas back to the Athapaskan migration from the sub-Arctic around 1100 BCE and through the heydays of Arizona Highways, a magazine from the 1950s, while also charting what lies ahead for those who are drawn to making the desert, however impossibly, their home. Preorder it here.
Speaking of the American desert, on the fiction side of things this winter comes Madeleine Watts’ latest novel, Elegy, Southwest. Watts made a name for herself as a writer of cli-fi after the release of her 2021 novel, The Inland Sea, set against the backdrop of Australia’s fires and floods, and she returns this year with a road trip novel that follows Eloise, a doctoral student studying the Colorado River and climate change. As part of her research, Eloise flies to Las Vegas for a road trip through the Southwest with her husband, Lewis, to whom the novel is addressed. Along the way, Eloise begins to believe she’s pregnant, while Lewis struggles with the fresh grief of losing his mother. As Watts told an interviewer of her process for The Inland Sea, “I wanted to write … about what it’s like to live in the experience of a changing climate that is not always a tangible part of your day-to-day but that’s already there – it’s in the air all around you.” Expect a similar treatment this go-round.Preorder it here.
Eric Puchner’s new novel, Dream State, is the story of two marriages set over 50 years. With the book opening in 2004, that naturally requires some speculation about the future — in this case, the future of “a rapidly warming Montana.” As The Indypendent writes in an early review, “The looming climate crisis — declining snowfall, depleted wildlife, raging seasonal wildfires, and abnormally warm temperatures — is writ large in the book, forming a blistering backdrop, highlighting newfound restrictions on what both residents and short-term visitors can now see and do in the area.” The novel has earned praise from Pulitzer Prize-winner Adam Johnson, who called it “a masterpiece,” as well as author Lynn Steger Strong, who has a climate book of her own on the list below.Preorder it here.
Four years ago, Argentinean author Agustina Bazterrica burst onto Americans’ radars with the English-language translation of her 2017 novelTender Is the Flesh, a book that imagines a future in which animals have become toxic to humans, leading us to resort to industrialized cannibalism. (Critics have described it, vividly, as “splatterpunk.”) This year, Bazterrica turns her attention from factory farming to the climate catastrophe, telling the story of a member of a “Sacred Sisterhood” cloistered in a mysterious convent who is prompted to reflect on her life outside its walls when a new acolyte arrives. Don’t expect Bazterrica to soften her critiques of capitalism here, though it’s not all doom and gloom; early readers have saidThe Unworthy “ends on a light note of hope.”Preorder it here.
Charlotte McConaghy’s follow-up novel to her critically acclaimed 2020 debut, Migrations, is set on a fictional research island, Shearwater, located between Australia and Antarctica. Dominic Salt, the caretaker of the island’s seed vault, has called the refuge home for the past eight years — ever since fleeing Australia’s accelerating natural disasters, hoping to find a safer place to raise his three children. But with rising sea levels now threatening the island, Dominic and his family have just seven weeks left before they plan to move on. Just before their departure, Dominic’s oldest daughter discovers a woman who has shipwrecked on shore, and the tension — and mystery — starts to grow. Wild Dark Shore has earned a starred review from Kirkus, which calls it a “terrific thriller.” Preorder it here.
Climatologist, World Weather Attribution co-founder, and 2024 Trailblazing Women in Climate laureate Friederike Otto does not mince words about who is most impacted by extreme weather — and who needs to be involved in the solutions. “If we leave the issue of climate change to white men, it’ll continue to be treated as a physical problem with technological solutions,” she has said, adding, “The more diverse the people working on it, the closer we get to implementing these solutions and making progress on climate change.” Her new book, Climate Injustice, elaborates on her thesis further, using the stories of real people in the Global South to illustrate how exploitation, sexism, and colonialism have created a crisis with unequal impacts. Preorder it here.
Everyone who works in the climate space is familiar with the question posed in the title of this book. Entomologist Douglas W. Tallamy is one of the leading proponents of the native gardens movement, and in How Can I Help?, he answers a query implied in his own earlier book, 2009’s Bringing Nature Home: that “unless we restore native plants to our suburban ecosystems, the future of biodiversity in the United States is dim.” How Can I Help? is structured to address some of the most common questions Tallamy encounters during his lectures about how individuals can become directors of their own miniature national parks at home. Despite the daunting challenge of biodiversity loss, Tallamy offers actionable ideas for helping the planet, with conservation beginning in your backyard.Preorder it here.
If I had to make one prediction for 2025, it’d be that we will hear a lot more about per- and polyfluoroalkyl substances — that is, the “forever chemicals” commonly known as PFAS. The chemicals are found in everything from our dental floss to our clothes, but perhaps most disturbingly, they’re also found in our drinking water. In Poisoning the Well, The Hill staff writers Sharon Udasin and Rachel Frazin follow how PFAS got into our environment in the first place — a story of corporate greed and cover-ups that will be familiar to anyone aware of the fossil fuel playbook. Preorder it here.
Journalist Malcolm Harris’ last book was an “encyclopedic,” 700-page history of the city of Palo Alto, which became a fixture of best-of-the-year lists after it came out last February. Hot on its heels is Harris’ follow-up, What’s Left (which slow readers will be relieved to hear is less of a time commitment, at 320 pages). Harris’ intention with his new work is to explore “our remaining options for saving the world,” all of which involve varying degrees of collective action but which escalate from “progressive” to “socialist” to “revolutionary.” It’s one that you can be sure will have people talking. Preorder it here.
Alan Weisman’s hugely successful 2007 book, The World Without Us, speculated about humanity’s legacy if we suddenly disappeared. (Slate named it in 2019 as one of the 50 best nonfiction books in the past quarter-century.) Now, Weisman turns his attention to helping us stick around. “I am working on a book with kind of a vast topic, which is what are humanity’s best and most realistic hopes for getting through this very difficult century that we have,” he told Bangladesh’s Business Standard in 2022, while visiting the country during the research stage of his new project, Hope Dies Last. Weisman’s book took him all over the world — including the Korean de-militarized zone, the Netherlands, and the Marshall Islands — as he looked to speak with people across disciplines and professions about how we can approach our future. Bill McKibben has described the result as “a nonfiction companion to Kim Stanley Robinson’s Ministry for the Future.”Preorder it here.
In 1999, 24-year-old environmentalist Terence Unity Freitas traveled to Colombia to support the Indigenous U’wa people in resisting Occidental Petroleum, which was interested in drilling to extract some 1.5 billion barrels of oil from beneath the cloud forest. During what was supposed to be a weeklong visit, Freitas was kidnapped by the Armed Revolutionary Forces of Colombia (better known as FARC) along with two other Americans; their bodies were later found, bound and shot, just over the border in Venezuela. Twenty years later, Abby Reyes — the author of this memoir and Freitas’ partner at the time of his death — was recognized as a victim in Colombia’s truth and reconciliation process, resurfacing old griefs, reflections, and questions. “I bring the reader along in my demand for truth before the tribunal while awakening our collective awareness of what the truth demands of all of us in this era of ecological collapse and social transformation,” Reyes has said of her book.Preorder it here.
In Susanna Kwan’s debut novel, Awake in the Floating City, San Francisco is almost entirely underwater. Years of Biblical rain mean most people have already evacuated, but Bo — who lost her mother to the waters — lingers long past when sensible people have fled. Then one day, she receives a note from her neighbor, Mia, a 130-year-old woman who doesn’t want to leave the city, either; together, the two become the last people left in San Francisco. “What post-apocalyptic vision dares be so gorgeous?” marvels the author Meng Jin in one of the book’s early blurbs. Preorder it here.
Identical twin sister arborists teach the Women’s Tree Climbing Workshop. While that sounds like the beginning of a fairy tale, it’s the delightfully real-life starting point of journalist Marguerite Holloway’s Take to the Trees. “I was there to be in trees and to better understand them,” she writes of her attendance at the climbing workshop. “Trees and forests are facing existential threats because of climate change, but it can be a struggle to grasp the extent of the danger.” While not all of us have the time, ability, or inclination to take to such “gut-lurching” heights to learn more, we can read Take to the Trees, which records Holloway’s experience overcoming her fears and learning to appreciate the threat to American forests. Preorder it here.
Natural history is one of my favorite genres, and I’m especially excited for Sea of Grass by Minnesota Star Tribute journalists Dave Hage and Josephine Marcotty about one of the more neglected ecosystems of the genre: the American prairie. The grassland, which makes up a vast swath of the inner United States, is an incredible self-sustaining marvel — and nearly as biodiverse as a tropical rainforest. Yet many people today still either share European settlers’ disinterested view of the landscape or adopt a purely utilitarian one — which is why, after 200 years of plows, drainages, and nitrogen fertilizers, the effects have been “catastrophic.” Still, plenty of people who live on the prairie understand the importance of protecting such a special ecosystem, and Hage and Marcotty follow the effort to work alongside the land, not just against it. Sea of Grass earned a coveted blurb from McKibben, in which he calls the book “well worth the read.” Preorder it here.
We’ve been attempting to predict the weather for as long as humans have existed. Satellites, radars, and computers helped us make a significant leap forward from the days of farmer’s almanacs, but advances in artificial intelligence, drones, and the proliferation of home weather stations have created previously unimaginable opportunities for accuracy. (It’s a tech frontier we’ve covered quite a bit here at Heatmap, as well). In his book, Journalist Thomas E. Weber dives into the wild — and wildly important — world of forecasting, which will hit shelves just in time for hurricane season.Preorder it here.
Climate scientist and Shift Key guest Kate Marvel structured her highly anticipated first book around nine different emotional lenses for looking at climate change. That might seem like an odd angle for a scientist, since researchers are specifically taught not to bring emotion into their work. Still, she contends that just as there is no one way to feel about climate change, there is no one emotion we can tap to guide our response to it, either. From hope to pride to love, Marvel urges readers to get deep into their feels in Human Nature, which also touches on “Greek mythology,” “witches,” “geophysical fluid dynamics,” and “romantic comedies” — though according to Marvel, you won’t find “despair” in its pages. A 120,000-copy initial print run suggests the publisher, Ecco, believes this one will be a hit. Preorder it here.
Addressing climate change will require us to address how we eat, which accounts for a third of our carbon emissions. How to ameliorate that is one of the most significant questions we’re currently staring down as a species — and the topic of journalist and Heatmap contributor Michael Grunwald’s next book. Though the answers he finds might not always fit into our comfortable narratives — Grunwald recently ruffled feathers with a related piece for The New York Times defending industrial agriculture’s high yields on small parcels of land as our “best hope” — We Are Eating the Earth seems certain to reshape how its readers think about food, policy, and our thrice-daily consumptions.I can’t wait to be challenged by it. Preorder it here.
Science journalist Peter Brannen’s last book was about the five times life on our planet almost ended in mass extinctions. His follow-up, The Story of CO2 Is the Story of Everything, will zero in on the collection of molecules that have allowed life to exist in the first place. Of course, the great irony of carbon dioxide is that while it has made our planet habitable, fluctuations in its presence in the atmosphere are also responsible for things like almost killing our ancestors all off in an event known as the Great Dying — and now, of course, we have put our thumb on that scale. By looking backward, often by many millions of years, Brennen gives us a glimpse of our future. You’ll definitely want to preorder this book, if only because it will look great on the shelf next to Brennen’s other Eric Nyquist-designed cover.Preorder it here.
The Edge of Water, by Olufunke Grace Bankole (Feb. 4), a novel about a Nigerian immigrant to New Orleans whose destiny is shaped by a hurricane; Ends of the Earth Journeys to the Polar Regions in Search of Life, the Cosmos, and Our Future, by Neil Shubin (Feb. 4), about what we can learn about life and our future from our world’s most extreme landscapes; Dimming the Sun: The Urgent Case for Geoengineering, by Thomas Ramge (March 4), which makes the case for solar geoengineering to turn down the heat on a warming planet; Bad Nature, by Ariel Courage (April 1), an ecological disaster road-trip novel with a patricide plot; Shelter and Storm: At Home in the Driftless, by Tamara Dean (April 8), a memoir about living through the era of climate uncertainty; The Float Test, by Lynn Steger Strong (April 8), a family drama set against the backdrop of a sweltering Florida summer; Atomic Dreams: The New Nuclear Evangelists and the Fight for the Future of Energy, by Rebecca Tuhus-Dubrow (April 8), about the political reversal over nuclear’s place in the energy transition; Phytopolis: The Living City, by Stefano Mancuso (April 22), about how we can adapt our cities, greenly, to the challenges of the future; Carbon: The Book of Life, by Paul Hawken (March 18), about the element both responsible for life and perhaps the biggest threat against it; A Year of Compassion: 52 Weeks of Living Zero-Waste, Plant-Based, and Cruelty-Free, by Colleen Patrick-Goudreau (March 25), about how to protect the planet with small acts of kindness from home; The Lost Trees of Willow Avenue: A Story of Climate and Hope on One American Street, by Mike Tidwell (March 25), a chronicle of record year for climate change as seen on a single Washington, D.C., block; Ocean: Earth’s Last Wilderness, by David Attenborough and Colin Butfield (May 6), the story of one of the planet’s most critical features, co-authored by one of its most beloved natural historians; Arctic Passages: Ice, Exploration, and the Battle for Power at the Top of the World, by Kieran Mulvaney (May 13), about what the age of Arctic exploration can reveal to us about the future of the pole; Hot Takes: Every Journalist’s Guide to Covering Climate Change, by Sadie Babits (June 2), a handbook for incorporating climate science into your reporting.
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On budget negotiations, Climeworks, and DOE grants
Current conditions: It’s peak storm season in the U.S., with severe weather in the forecast for at least the next six days in the Midwest and East• San Antonio, Texas, is expected to hit 108 degrees Fahrenheit today• Monsoon rains have begun in Sri Lanka.
The House Budget Committee meeting to prepare the reconciliation bill for a floor vote as early as next week appears to be a go for Friday, despite calls from some Republicans to delay the session. At least three GOP House members, including two members of the Freedom Caucus, have threatened to vote no on the budget because a final score for the Energy and Commerce portion of the bill, which includes cuts to Medicaid, won’t be ready from the Congressional Budget Office until next week. That is causing a “math problem” for Republicans, Politico writes, because the Budget Committee “is split 21-16 in favor of Republicans, and Democrats are expecting full attendance,” meaning Republicans can “only lose two votes if they want to move forward with the megabill Friday.” Republican Brandon Gill of Texas is currently out on paternity leave, further reducing the margin for disagreement.
House Speaker Mike Johnson is also contending with discontent in the ranks over cuts to clean energy tax credits. “It’s not as bad as I thought it was going to be, but it’s still pretty bad,” New York Republican Andrew Garbarino, a co-chair of the House Bipartisan Climate Solutions Caucus, told Politico on Thursday. But concerns about the cuts, which would heavily impact Republican state economies and jobs, do not appear to be a “red line” for many others, including Georgia’s Buddy Carter, whose district benefits from Inflation Reduction Act credits for a Hyundai car and battery plant that is among the targets for elimination. You can learn more about the cuts Republicans are proposing to the IRA in our coverage here.
The Swiss carbon removal company Climeworks is preparing for significant cuts to its workforce, citing the larger economic landscape and the Trump administration’s lack of consistent support. The company currently has 498 employees, but is undergoing a consultation process, indicating it is looking to cut more than 10% of its workforce at once, SwissInfo.ch reports. “Our financial resources are limited,” Climeworks’ co-founder and managing director Jan Wurzbacher said in comments on Swiss TV.
Though Interior Secretary Doug Burgum is a known proponent of carbon capture, and there had been excitement in the industry that Trump’s attempts to expedite federal permitting would benefit carbon storage sites, the administration has also hollowed out the Department of Energy’s carbon removal team, my colleague Katie Brigham has reported. The ongoing funding cuts and uncertainty have made it difficult to get information from the government that could affect Climework’s Project Cypress in Louisiana, although Wurzbacher stressed that “we are not currently aware that our project would be stopped.”
Energy Secretary Chris Wright announced in a Thursday memo that the department will be reviewing at least $15 billion worth of grants awarded to “power grid and manufacturing supply chain projects” under the Biden administration, Reuters reports. “With this process, the Department will ensure we are doing our due diligence, utilizing taxpayer dollars to generate the largest possible benefit to the American people and safeguarding our national security,” Wright said in his statement.
The memo goes on to note that the DOE plans to prioritize “large-scale commercial projects that require more detailed information from the awardees for the initial phase of this review, but this process may extend to other DOE program offices as the reviews progress.” Projects that don’t meet the DOE’s standards could be denied, as could projects of grantees who fail to “respond to information requests within the provided time frame, does not respond to follow-up questions in a timely manner.” As of last week, Wright told lawmakers, “we’ve canceled zero” existing projects so far, E&E News writes; the agency will reportedly be reviewing at least 179 different awards during its audit.
The number of National Weather Service offices ending 24-hour operations and severe weather alerts is increasing. On Thursday, The San Francisco Chronicle confirmed that California’s Sacramento and Hanford offices, which provide information to more than 7 million people in the Central Valley, have been forced to reduce service due to “critically reduced staffing.”
Eliminating 24-hour service is especially concerning for the Central Valley and surrounding foothills, where around-the-clock weather updates can be critical. “These are offices that have both dealt with major wildfire episodes most of the past 10 years, and we are now entering fire season,” Daniel Swain, a climate scientist at UCLA and UC Agriculture and Natural Resources, told the Chronicle. “That’s a big, big problem.” Swain additionally shared on LinkedIn a map he’d put together of regions in the U.S. that no longer have full-service weather coverage, including “a substantial chunk of Tornado Alley during peak tornado season and the entirety of Alaska’s vast North Slope region.” The NWS is additionally seeking to fill 155 vacancies in coastal states that could face risks as the Atlantic hurricane season begins at the end of the month, The Washington Post reports. An estimated 500 of 4,200 NWS employees have been fired or taken early retirements since the start of Trump’s term.
Heatmap’s “most fascinating” EV of 2025 just got pushed back to 2026. The Ram 1500 Ramcharger — which has a 140-mile electric range as well as a V6 engine attached to a generator to power the car when the battery runs out — is now set to launch in the first quarter of next year due to “extending the quality validation period,” Crain’s Detroit Business reported this week. Parent company Stellantis also pushed back the launch of its fully electric Ram 1500 REV until summer 2027, with a planned model year of 2028. “Our plan ensures we are offering customers a range of trucks with flexible powertrain options that best meet their needs,” Stellantis spokeswoman Jodi Tinson told Crain’s in an email. Though you now have even longer to wait, you can read more about the car Jesse Jenkins calls “brilliant” here.
GMC
The 2026 GMC Hummer EV just got even more ridiculous. “Thanks to the new Carbon Fiber Edition,” the 9,000-pound car “can zoom to 60 miles per hour in 2.8 seconds,” InsideEVs reports.
A conversation with Jillian Blanchard of Lawyers for Good Government about the heightened cost of permitting delays
This week I chatted with Jillian Blanchard, vice president of climate change and environmental justice with Lawyers for Good Government, an organization that has been supporting beneficiaries of the Inflation Reduction Act navigate the uncertainties surrounding tax credits and grant programs under the Trump administration. The reason I wanted to chat with Jillian is simple: the IRA is under threat for the first time under a Republican Congress. I wanted to understand how solar and wind projects could be impacted by the House Republican reconciliation bill and putting IRA tax credits in doubt. I learned a lot.
The following conversation was lightly edited for clarity.
Okay, Jillian, what’s the topline here? How would the GOP reconciliation bill impact individual projects’ development?
There are big chunks of the reconciliation bill that will have dramatic impacts on project development, including language that would repeal or phase out bipartisan and popular tax credits in a way that would make it very, very difficult to invest in projects. I can get into the weeds next.
But it’s worth saying first – the group of programs aside from tax credits that [House Republicans] would repeal represents every single part of America. Hundreds of projects that will not go forward if these programs are not going well. And they have several legally obligated grants that EPA has already mucked up in a litany of ways. But what they’re proposing to do is to pull the rug out from under those programs. On top of that they want to pull any unobligated funding out.
I think it’s extremely misrepresentative to say these are not big cuts. They’re significant cuts to clean air and clean water across the board.
Help me get into the weeds about how phasing out the credits will make it harder to invest in a project.
Right now, a bank might want to invest a certain amount of money in a clean energy project because they know on the back end they can get 30% or 40% back on their investment. A return through tax credits. They can bank on that, because tax credits are a guarantee.
Was that an intentional pun? “Bank”?
Yeah, it is. I love a good pun. You opened the floodgates, that was a mistake.
But anyway, the program itself was supposed to be around until at least 2032 and the bank could bank on those tax credits. That’s a big runway, because projects could get delayed and you could lock in the credit as soon as you started construction.
Now they’re doing a phase-out approach where if your project is not placed into service before a certain date, you don’t avoid the phase out. You don’t get any protections if you’re starting your project now or next year. It has to be placed in service before 2028 or else your project may not be eligible. You are constructing it, you are financing it, but then through no fault of your own – a storm or whatever – then suddenly that project is no longer entitled to get 30% or 40% back.
That’s a big risk. And banks don’t like risk.
Opposition on the ground also delays projects the way a storm does. Would this empower those opponents?
Oh, totally. Totally. If anyone wants to fight a project, a bank might be even less likely to invest in it. The NIMBYs for that particular project become a risk.
What would you tell a developer at this moment who is wondering about the uncertainty around the IRA?
I would tell them that now is the time to speak up. If they want to stay in this business and make sure their energy stays as low-cost as it already is, they need to speak up right now, no matter what their political party affiliation is. Make it clear solar isn’t going away, wind isn’t going away, storage isn’t going away. These are markets America needs to be competitive with the rest of the world.
Investors are only just now starting to digest what the proposed cuts will mean, especially for energy storage.
Is Wall Street too sanguine about the House of Representatives’ proposal to gut the Inflation Reduction Act? When the House Ways and Means Committee unveiled its language on the law on Monday — phasing out tax credits, implementing strict restrictions on business relationships with Chinese companies, and altering when projects are eligible for credits — some investors responded to the cutbacks by driving up the prices of some clean energy stocks.
The residential solar company Sunrun traded up on Tuesday by 8.6%, and the American solar manufacturer First Solar was up over 22%. (Stock movements on Monday were largely in response to the pause of the U.S.-China trade war, also announced that morning.)
“The early drafts of a Republican tax and spending bill weren’t as bad for renewables as feared,” wrote Barron’s. Morgan Stanley analysts used the same language — “not as bad as feared” — in a note to clients on the text. “Industry was bracing for way worse,” Don Schneider, the deputy head of public policy for Piper Sandler and a former Republican staffer on the Ways and Means Committee, wrote on X.
While many analysts — and, to be honest, journalists at Heatmap — have issued dire warnings about how the various provisions of the Ways and Means language could together make much of the IRA essentially impossible to use, even before the tax credits phase out, investors on Wall Street and in Washington seem to have shrugged them off. Some level of cutting was all but inevitable, and “not as bad as it could have been” is reason enough to celebrate — plus there’s also “it’ll probably change, anyway.”
There’s something to this. A group ofmoderate Republicans criticized the language on Wednesday as too restrictive, specifically citing changes to three overarching features of the tax credits: when projects would be eligible for tax credits, where companies are able to source components and materials, and whether companies are allowed to freely buy and sell tax credits generated by their projects. (Wouldn’t you know it, these complaints largely echo what Heatmap has written in the past few days.)
In the Senate, meanwhile, Republican Kevin Cramer of North Dakota, said that the text as written would be too damaging to advanced nuclear and enhanced geothermal generation. The phase-out timelines in the Ways and Means language are “too short for truly new technologies,” Cramer told Politico.
Pavan Venkatakrishnan, an infrastructure fellow at the Institute for Progress, told me that he expects the bill to evolve in a way to meet the concerns of Senate Republicans like Cramer.
“Given considerations both political and procedural, like the more flexible reconciliation instructions Senate Finance is afforded relative to House Ways and Means and the disproportionate impact current text entails for technologies Republicans traditionally favor, like nuclear, geothermal, and hydropower, I think it’s fair to say that this text will change over the coming weeks,” he said.
Finally, days after the Ways and Means committee made its thinking public, Wall Street seems to be catching on to the implications. The new foreign entities of concern rules pose a particularly huge danger to the renewable energy sector, according to Jefferies analyst Julien Dumoulin-Smith, and especially to energy storage, which would be the key provider of reliability on a renewable-heavy grid. Energy storage looks to account for almost 30% of new generator additions this year, according to the Energy Information Administration.
“We think the market got it wrong for storage,” Dumoulin-Smith wrote in a note to clients. The market has yet to “digest and fully interpret the implications of proposed tariff and tax policy, which as currently written do not bode well for storage,” he said. The foreign sourcing language “is more restrictive than initially thought, with some industry stakeholders calling the proposal a near repeal on IRA.”
The storage supply chain is intensely entangled with China. Many companies, including Tesla,have been forced to disclose to investors just how reliant they are on China for their storage businesses.
China alone accounted for 70% of battery imports in 2024, according to industry analysts at BloombergNEF, over $14 billion worth. About a quarter of the metals used in battery manufacturing — especially graphite — came from China, BNEF figures show. For specific battery chemistry like lithium iron phosphate, which is popular for stationary storage products, the supply chain is essentially 100% Chinese.
Wall Street revenue and profit estimates “do not adequately capture the extent of risks” facing the U.S. storage industry, Dumoulin-Smith wrote. The storage company Fluence’s stock fell around 1.5% today, and is down over 5.5% since close of trading on Monday, as the market began to digest the House language.
It is possible that the foreign sourcing rules will be loosened and phase-outs for tax credits and transferability lengthened, Venkatakrishnan told me, but not in a way that would endanger the overall structure of the bill. Cuts to the Inflation Reduction Act are a key source of revenue for the Republican bill-writers to ensure as many of the tax cuts they want can fit within the budgetary scope they’ve given themselves.
“Any adjustments will be made with an eye toward ensuring budgetary offsets are sufficient to enable success of the broader enterprise,” Venkatakrishnan said. In other words, as much as some lawmakers may want to see these tax credits preserved, ultimately, they’ve got to pass a bill to ensure Trump’s tax cuts stick around.