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For every level of laundry needs.
Americans love laundry. Of the common household chores, it is
by far the most popular — and the most energy-intensive. Washing and drying a load of laundry every two days for a year generates roughly the same emissions as driving from Chicago to New York and back again in a gasoline-powered passenger vehicle. Nearly three-quarters of those emissions come from drying alone; meanwhile, according to the Environmental Protection Agency, the average washing machine generates up to 8% of a home’s total energy use. The whole process can cost up to $150 per year in electricity alone, depending on where you live and the frequency of your washes.
With some regulatory prodding, manufacturers have tried to improve water and energy efficiency in new appliances and have rolled out fancy new features like “smart” water-level sensors, vibration reduction technologies, and microfiber-catching filters. But not every house — or budget — has room for the latest and greatest technologies, and systems that would work well in an airy Los Angeles laundry room might make less sense in a drafty apartment in Minnesota.
Heatmap is here to remove some of the guesswork from upgrading one of your home’s most-used appliances. Here is our expert panel’s insight into when and how to purchase a new washer and dryer for your home.
Joanna Mauer is the deputy director of the Appliance Standards Awareness Project, a non-profit advocacy group pushing for stricter energy efficiency legislation. In her role at ASAP, Mauer works with the Department of Energy on its efficiency rules for residential appliances. She has previously worked for the Environmental Protection Agency and the Center for Integrative Environmental Research.
Amber McDaniel is the head of content at Sustainable Jungle, a website and podcast that publishes tips, tricks, and product reviews, including for major household appliances, with a focus on environmentally friendly solutions.
Scott Flint is a licensed California appliance tech with 30 years of experience. He is known as the Fix-It Guy on his YouTube channel, where he promotes the upkeep and repair of home appliances to extend their use. He has also written extensively about washers and dryers for publications such as The Family Handyman, Taste Of Home, and Earth911.
Peruse the latest washers and dryers and you’ll see features like sensors that adjust the water level to match the load of laundry, voice-activated start buttons, WiFi-enabled push notifications for when it’s time to move a load to the dryer, and more. And while there are environmentally friendly upsides to some of these features, “the more simple the machine, the less likely that things will fail,” Flint told me. In his experience repairing hundreds of washers and dryers over the years, “People save money on their initial purchase and the machine is going to last longer if you can minimize the features.”
The Energy Star certification is a great starting point in your shopping journey. But it shouldn’t be the be-all, end-all of your research. Energy Star represents a range of efficiency standards from different brands, with only the top models earning a “ Most Efficient” distinction.
You’ll still want to read reviews to get a better understanding of the reliability of the products you’re looking at, too. Though many new features on the market promise water and energy savings, they’re harder to repair yourself, meaning any potential fixes can get expensive. They can also have shorter lifespans than simpler models.
Eco-friendly washers and dryers are great for a whole laundry list (get it?) of reasons: They lower your household energy bill, they reduce emissions, they reduce wasted water, they’re often easier to install, and they can be gentler on your clothes. But they don’t necessarily save you time. Energy-efficient electric dryers can take up to twice as long to dry your clothes than traditional gas dryers. Still, all of our expert panelists agreed the upsides outweigh the drawbacks.
Yes, this is a buying guide for purchasing a new washer and dryer. But before you spend money on new appliances, you should consider working with what you already have.
If you’re dealing with an old or sub-optimally functional machine and wondering whether now is the time to upgrade, repairing your existing washer or dryer can actually be a smarter and thriftier solution; in fact, Consumer Reportsonly recommends replacing a dryer if it’s over 10 years old, electric, and cost less than $700 when you initially purchased it. Often, whatever’s going on doesn’t even require a professional to fix. “I think only rarely — let’s say about 20% of the time — would most people need to call in a technician,” Flint told me. Most washer and dryer problems are something you can fix using “normal household tools.” (More on that later.)
Keep in mind, even if you have an old washer or dryer that isn’t very energy efficient, “that’s still not even going to come close to touching the amount of energy that was used to produce and ship a new machine,” McDaniel told me. When your washer or dryer “actually fully stops working and it’s not doing what you need it to do — that’s when it’s time to upgrade.”
Typically, 1.5 to 3.4 cubic feet of capacity is suitable for a one- to two-person household, 3.5 to 4.4 cubic feet will do for two to three people, and 4.5 or more cubic feet will serve a household with more than three people. But having a new baby or pets might mean you do more loads of laundry than an average household, in which case sizing up is better.
Flint told me a common mistake he sees people make is overloading their washing machines, which can destroy an appliance’s rear bearing — the part of the machine that helps the drum rotate smoothly — a repair that is often so costly, it can make more sense to junk the whole machine. On the other hand, running small loads in a large-capacity washing machine can mean wasting water cleaning not-as-many clothes. Consider what washing machine would make the most sense for your needs to maximize efficiency.
Energy and water efficiency are two of the most common considerations when buying a washer and dryer, and are the primary focus of this guide. Some consumers may have additional concerns — McDaniel, for example, recommended looking for a Restriction of Hazardous Substances certification, which signals that an appliance complies with limits on heavy metals like lead and cadmium. Ethical considerations — including a manufacturer’s contributions to armed conflicts, labor practices, and sourcing of conflict minerals — are also worth close inspection. Ethical Consumer offers an excellent guide for finding a brand that best aligns with your values.
“The first thing that we always recommend is: If you need something new, try to go refurbished,” McDaniel told me. Still, there’s a right way and a wrong way to make a major second-hand purchase. McDaniel suggested going through a reputable source that offers a warranty, such as Best Buy (when searching online, make sure to filters for “Energy Star” and “open box” and check the product’s condition).
If you prefer the security of a new product, then it’s time to familiarize yourself with the Energy Star website. You can sort by Energy Star Most Efficient, which are the best of the best, as well as by price, brand, volume, front-load vs. top-load, vented, ventless, heat pump, gas, electric, and more. Energy Star also makes it easy to compare the specs of different products (just tick the “compare” box next to the machines you’re looking at, then scroll to the top to hit the orange “compare” button when you’re ready).
Dryers are the biggest energy suck in most homes, using two to four times as much energy as new washers and nearly twice as much as new refrigerators. McDaniel told me they are also responsible for the greatest wear and tear on clothes. Dryers are an especially American phenomenon; while more than 80% of households in the U.S. own a dryer, just 30% of European households do. That is to say, you probably don’t actually need one, and if you need to save money or space in your laundry routine, this would be the best place to look to make a cut.
“Not relying on a dryer is huge. I only use mine in the wintertime, and in the summer, I line dry my clothes — and the only reason I don’t do that in the winter is I literally don’t have the space inside,” McDaniel said.
Traditional vented dryers — the energy guzzlers of the American home — aren’t the only option anymore, though. The next best thing to a clothesline is a heat pump dryer, which Mauer told me is the “most efficient clothes dryer on the market today,” often far exceeding the Energy Star requirements. Heat pump dryers have a lower maximum temperature, though, so you don’t get that hot-out-of-the-dryer feel when the load is finished. It can also take an hour or more to dry a load of laundry fully. The bright side: Because the heat is lower, heat pump dryers are much gentler on your clothes.
“A big red flag for us is brands that don’t warranty their products in any capacity,” McDaniel told me. Buying a washer or dryer that is durable is important — Flint told me you should expect to get at least a decade of use out of a washer and dryer with proper maintenance and minor repairs — and a warranty is evidence that a company is building a product that they trust to last.
The Electrolux ELFW7637AT has one of the highest energy- and water-efficiency ratings of any washing machine on the market in 2024, with an IMEF of 3.2 and an integrated water factor of 2.6 — both of which are exceptional even by Energy Star’s standards. It also works. Reviewers have lauded its SmartBoost stain removal technology, its internal water heater, and its straightforward controls, although its 85-minute cycle time is a little longer than many other washers on the market.
Both Flint and McDaniel spoke highly of the German brand Miele, which makes this compact washing machine. Though its capacity is about half that of the Electrolux and it didn’t earn Energy Star’s highest level of certification (it has an IMEF of 2.9 and a IWF of 3.2), it is one of the more reliable and best-reviewed washers on the market.
Admittedly, you have to pay for that kind of dependability — Miele is a high-end brand with a sticker price that reflects it. The WXI860 gets high marks for its cleaning ability, including fill-and-forget auto-dispensing features, and boasts 72% lower energy consumption than conventional washers. Additionally, Miele has “a honeycomb-drum technology, so that when it puts the clothes in the spin cycle, it creates a thin film of water between the drum wall and the laundry,” McDaniel told me, which helps prevent clothing fibers from getting caught. “Little features like that that help keep our clothes in circulation for longer are also more sustainable.”
Mauer swears by heat pump dryers, and there are a number of good choices on the market right now. Beko is a favorite of the Sustainable Jungle team, in part because it has a filtration system to stop microplastics from synthetic fabrics from entering the waterways, as well as the company’s ambitious commitments to low-waste and recycled materials. This ventless Beko heat pump dryer is tiny but mighty, making it a great fit for small spaces (it can even fit under the kitchen counter), and it boasts a 2023 “Most Efficient” rating from Energy Star.
Being a heat pump dryer, though, it can take a while to dry clothes — one tester found it took 227 minutes to dry a large, bulky load to 100% — but plan ahead and Beko can give you major savings in the long run. Or, if the Beko isn’t quite what you’re looking for, check out Miele, which makes its own well-reviewed heat pump dryer (although it is small and pricy).
If a heat-pump dryer isn’t right for your lifestyle, the Electrolux ELFE7637AT is one of the more impressive electric dryers on the market right now, earning the Energy Star seal of approval. While it still isn’t super fast (fast takes a lot of heat, which takes a lot of energy, which makes a machine less efficient), reviewers say it can get a large load to 100% dry in 60 minutes if need be. It’s also the best-rated electric dryer on Consumer Reports’ list that isn’t one of the Samsung, LG, or GE models that Flint frequently gets called out to fix.
This combo washer-dryer uses heat pump technology in its dryer, making it one of the more energy-efficient single-unit models on the market. Unlike some of the other options on this list, however, its larger 4.8 cubic foot drum size is big enough for a two- or three-person household. While combo washer/dryers still have some downsides over their two-piece counterparts, including decreased efficiency in cleaning and especially drying, this is one of the better-reviewed units on the market.
Flint told me that you can often find older Kenmore Whirlpool series 80 machines on Craigslist that are “ really good, and tend to sell for about $250 when refurbished, and often come with a one-year warranty.” The only detriment, he said, is that they’re top-loaders — which waste a lot of water — but “if somebody just really needs a tough machine that is going to last, that was a really good design.”
Congratulations! You’re now the proud owner of a new washer and dryer. What happens now?
New washers and dryers are unfortunately not designed with longevity in mind — but that doesn’t mean you need to replace them if something goes wrong after four or five years.
“I can go up to a washing machine that is sitting in the dump, and I can open up the door, and I can spin the spin basket, and I can tell that it’s a perfectly good machine,” Flint told me.
Flint estimates that only about 20% of the time do people actually need to call in a technician to repair their appliances, pointing to fixes like replacing a blown fuse, unsticking a front-load washer that won’t spin, and swapping out a moldy washer door gasket as deceptively simple tasks. Get acquainted with DIY YouTube channels like Flint’s or repair blogs that explain solutions to common problems.
Still, sometimes you need to call in the big guns. In that case, Flint recommends doing your due diligence on a review service like Yelp beforehand.
Once you find someone you like, reach out with the model number of your machine and the symptom you’re experiencing and the technician “should be able to provide you a quote without coming out if they know what they’re doing,” Flint said. If someone does have to come out to figure out what’s going on, then that visit should be free. “Don’t go with someone who’s going to charge you to come out and diagnose the problem and then charge you to fix it.” Repairs to a front-loading washer will probably run around $170, according to Consumer Reports.
You can extend the life of your washer or dryer by following a few more rules of thumb.
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Chatting with RE Tech Advisors’ Deb Cloutier about data centers, lifecycle costs, and the value of federal data.
Last fall, my colleagues and I at Heatmap put together a comprehensive (and award-winning!) guide on how to Decarbonize Your Life. Though it contained information on everything from shopping for an EV to which fake meats are actually good, as my colleague Katie Brigham noted, “an energy-efficient home needs energy-efficient … gadgets to fill it up.” So we also curated lists of climate-conscious stoves, heaters, and washer-dryers — recommendations we made by talking to experts, but also by looking closely at appliances’ Energy Star certifications.
You’ve probably relied on these certifications, too. Overseen by the Environmental Protection Agency, Energy Star labels are recognized by 90% of Americans as indicating that an appliance is top of its class when it comes to saving electricity and money. According to the government’s estimates, the voluntary program has saved Americans $500 billion since it began in 1992.
But now all that appears to be reaching its end: Last week, EPA leadership told staff that the division that oversees the Energy Star efficiency certification program for home appliances will be eliminated as part of the Trump administration’s ongoing cuts and reorganization (although the president has also long pursued a vendetta against low-flow showerheads and dishwashers that “don’t work”). To better understand the ramifications of such a decision, I spoke this week with Deb Cloutier, the president and founder of the sustainability firm RE Tech Advisors and one of the original architects of Energy Star. She provided technical guidance and tools as a consultant during the program’s development stages of the program, and later worked as a strategic advisor for the Department of Energy’s Better Buildings Initiative. Our conversation has been lightly edited and for length and clarity.
You’ve been involved in the Energy Star program since the beginning. Can you tell me a little about what the atmosphere was like when it was established back in 1992? Was there resistance to it from appliance manufacturers or Republicans at that time?
Energy Star represented a voluntary public-private partnership, meaning a nonregulatory approach to engaging the business community and catalyzing the adoption of strategic energy management. So at the time, it was the first of its kind. I wouldn’t say folks were just like, “Yes, let’s do this.” It was really new and different.
The other thing is that at that time, we had come out of the oil crisis of the 1970s, and people were starting to recognize the importance of where and how our energy was being produced. But we weren’t focused on thinking about it as an opportunity. For office buildings, the single largest controllable operating expense is your energy or utilities expenses; if the Environmental Protection Agency or the government could build awareness, develop tools, and help businesses understand how they could invest in energy efficiency and how that would translate to financial performance results for them — it was a great experiment. And it turns out that it’s the single most successful voluntary program we’ve had to date, saving over $5 billion annually.
It’s clear how losing Energy Star would harm consumers, but I’m curious to hear from you about how this is also bad for building owners and residents. What is the cost of losing this program, especially from a climate perspective?
The most important contribution of the EPA’s Energy Star program is that it has created a national standard to benchmark and measure efficiency and energy performance. You can’t manage what you don’t measure, and consistency across building types, ages, and sizes — it’s pretty complicated to make an apples-to-apples comparison.
One of the tools and resources that Energy Star has created, which I see as being embedded in the fabric of American businesses, is their benchmarking tool called Portfolio Manager. It is tied to dozens of state and local jurisdiction policies and legislation that range from building energy disclosure to mandatory best practices to maintaining and operating buildings and emissions thresholds. So the Energy Star rating system is tied not only to how organizations assess their whole building performance, but also to how it tracks and measures progress towards efficiency improvements and then gives a certification or recognition for the most highly efficient ones.
Another thing folks tend not to consider is the relationship between energy efficiency and grid stability. Energy Star-certified appliances, homes, buildings, and industrial facilities help to reduce peak demand, which improves grid stability and resilience. It also lowers the risk of brownouts and blackouts. Think about the growing demands of data center computing and AI models — we need to bring more energy onto the grid and make more space for it. People sometimes don’t realize that it is really dependent on a consistent, impartial standard as a level setting.
If you look at some of the statistics, they’re projecting that investments in new data centers will grow at more than a 20% compound annual growth rate, and that’s equal to $59 billion. It’s just astronomical how much more energy demand there will be. If you try to put that on top of a grid that is fairly antiquated and very inefficient in the way it generates, transmits, and distributes energy, then you are intensifying the potential problem.
I’ve heard about manufacturers or an outside energy or appliance group possibly setting up a replacement program if Energy Star is eliminated. What is the advantage of having the government specifically oversee Energy Star?
Three or four things make the federal government the most unique entity and the most well-equipped to oversee the Energy Star program. First, they have access to large data sets using CBECS, the Commercial Building Energy Consumption Survey, and RECS, the Residential Energy Consumption Survey. The government inherently is an impartial, unbiased group, and entities are willing to share their data with it, and that would not be the same if it were a third party or a privatized group. That data set is instrumental in creating the standards that allow you, for products, to evaluate the most energy efficient, or for buildings, to develop a one-to-100 score. Energy Star allows the top 25% to be recognized as exemplary energy performance.
The government also has access to the National Renewable Energy Laboratory resources; they have the data, and I believe they have the impartiality and the trust. Today, the Energy Star brand has over 90% consumer recognition. I would be concerned if manufacturers or others would produce confusion in the marketplace related to a single little blue label.
Is there anything consumers should know about making decisions or navigating their choices if we return to a pre-1992 landscape?
In the absence of an Energy Star label, one thing we can do is help consumers understand that it is not just about the first cost of a dishwasher or a washing machine or renting an apartment. It’s about total lifecycle costs. What the Energy Star label does is it helps you have confidence that [an appliance] will use the least amount of energy necessary to run over its lifetime. But if your product or apartment is full of less efficient appliances, you have to think about how much more energy you will pay for over that life cycle. That’s sometimes a difficult concept for folks to understand: They think of their first cost, not the cost to operate or maintain something over time, which is higher if it’s not energy efficient.
Is there anything else people often overlook when considering the ramifications of losing Energy Star?
Energy efficiency is important for all constituencies and all sectors of the U.S. economy. Some folks will be harder hit by this, and by that, I mean low-income housing, schools, hospitals, and public sector buildings. Those facilities often have very limited budgets, so energy efficiency is one of the lowest-cost, most effective investments with good returns. But if you’re a low-income family, think about it: If you make less than $33,000 a year for a family of four, your utility bills have an outsized impact on the total cost of living. If the total utility bill is $300 or $400 a month, then utilities represent 10% to 15% of your total income, so efficiency can have an outsized impact.
The other side of that is mission-critical facilities. Having the ability to run lights, air conditioning, and cooling is important for comfort, but in some facilities — like precision manufacturing or biopharmaceuticals, data centers, things of that nature — it becomes a mission-critical area, not a nice-to-have. We can help reduce the amount of energy used by those facilities, extend their useful life, help them maintain their systems longer, and allow those businesses to be more competitive.
What’s your read on how the proposed Energy Star elimination is being discussed right now?
There’s a lot of hyperbole about Energy Star being eliminated — it’s a fait accompli. It is important to note that Energy Star is a line item identified in the statute by Congress for approval for funding. It seems pretty unrealistic, from a judicial standpoint, that it would be able to be eliminated before the end of this fiscal year.
I know that there are many, many representatives, both Republican and Democrats, who support Energy Star. We’ve had 35 years of bipartisan support, and it has been earmarked in congressional law many times, through multiple George H.W. and George W. Bush administrations. And there are a lot of lobbying efforts that I’m personally aware of within the commercial real estate industry and the manufacturing industry, where folks are reaching out and doing calls to action for the House and Senate Appropriations majority members — similar activities to what we did eight years ago when Energy Star was directly under fire.
It seems like such a strange thing for the administration to go after. It’s not like appliance manufacturers were clamoring for this, right?
It’s very vexing to me. I don’t get it. If the Trump administration wants to focus on affordability in American households, energy efficiency isn’t the thing to cut. I’m not sure if it’s getting caught up in the fact that it is in the Office of Atmospheric Pollution Prevention, or because at the Department of Energy’s Better Buildings Program, Biden launched the Better Climate Challenge. I don’t know if it’s because it had some ties to climate, but what’s ironic is that it didn’t start as a climate program. It began as an energy efficiency program, and it’s always been focused on businesses and the financial returns on investment — it helps us attract capital and debt for investment in real estate. It’s really disconnected.
On drinking water, a ‘rogue’ discovery, and Northwest data centers
Current conditions: Today marks the start of the Eastern Pacific Hurricane Season, and meteorologists are monitoring two potential areas of tropical development• Millions in the Great Plains and Eastern U.S. face risks of thunderstorms, large hail, and tornadoes • Steady rain continues Thursday in the eastern Democratic Republic of Congo, where at least 100 people have died in flash floods.
1. Trump administration backtracks on promise to protect drinking water from forever chemicals
The Environmental Protection Agency announced Wednesday that it plans to rescind four Biden-era limitations on pollutants in drinking water. Per- and Polyfluoroalkyl Substances, also called PFAS or “forever chemicals,” are linked to many serious health issues, including certain cancers; as I’ve covered, they are common in products advertised as stain-proof, nonstick, and water repellent. The EPA’s decision follows Administrator Lee Zeldin’s claim less than two weeks ago that “I have long been concerned about PFAS” and “we are tackling PFAS from all of EPA’s program offices,”E&E News reports.
In the Wednesday announcement, Zeldin backpedaled from his initial call for action, claiming the agency is looking into “common-sense flexibility in the form of additional time for compliance.” He also pushed back on claims that the agency is weakening PFAS standards, per The Washington Post, saying the EPA is looking into revising the limits and that “the number might end up going lower, not higher.” Water utilities, which have balked against the high cost and difficulty of filtering PFAS out of an estimated 158 million Americans’ drinking water, praised the EPA’s delay as “the right thing.”
2. Security experts discovered ‘unexplained’ pieces of communication equipment in Chinese-made solar power inverters
U.S. energy officials have discovered “unexplained communication equipment” in some Chinese-made solar inverters, Reuters reports. Inverters help connect solar panel systems to the electric grid and allow utilities to conduct remote updates and maintenance; because China makes most inverters, power companies typically use firewalls to prevent foreign communication with the devices.
Security experts reportedly found the rogue devices during inspections. Though the sources who spoke with Reuters did not share the manufacturers of the inverters, similar communication devices were reportedly also found in some batteries from “multiple Chinese suppliers” over the past nine months. A spokesperson at the Chinese embassy in Washington pushed back on Reuters’ report, saying, “We oppose the generalization of the concept of national security, distorting and smearing China's infrastructure achievements.”
3. Northwest data centers could ‘cannibalize’ clean power in states with lower environmental protections: report
Sightline Institute
The Northwest has one of the country’s highest concentrations of data centers due to the region’s tax breaks — including low or no property taxes for many in Oregon and sales and use exemptions on equipment purchases and installations in Washington — as well as its below-average renewable power prices. But utilities “working across state lines could shift renewable resources to serve Northwest data centers, making up the difference by burning more coal and gas in places that lack strong environmental protections,” Emily Moore, the director of climate and energy at the sustainability think tank Sightline, writes in a new report.
One such example is what’s being done by Avista, an electricity service in eastern Washington and western Idaho. To meet the needs of a new 200 megawatt data center in Washington, as well as to comply with the state’s Clean Energy Transformation Act, “the company indicated it would add 95 megawatts of gas capacity in Idaho and then shift wind resources that would have served Idaho customers to Washington,” Moore writes. In essence, Washington is “cannibalizing” clean power currently serving Idahoans, and Avista is polluting “more in Idaho to make up the difference.” The report goes on to propose policy paths for Northwest leaders, including accelerating the buildout of the region’s congested electric transmission system, since “a right-sized modern grid could let data centers tap wind from Montana or sun from California instead of encouraging them to locate in states with no commitment to clean power.” You can read Sightline’s full report here.
4. BP chief economist warns China is winning the ‘new energy’ race
Michael Cohen, BP’s chief U.S. economist and head of oil and refining, warned this week that China is winning the “new energy” race with its clean technology supply chains and electric vehicles, Fortune reports. At the Enverus Evolve oil and gas conference in Houston, Cohen said the U.S. is at risk of failing “Econ 101” if it slow-walks on renewables due to resistance from the Trump administration, supply chain issues, and interest rates. He projected that global oil demand will peak in the next decade, with renewables rising from 15% to 30% of the global energy market between now and 2050.
A new report by Carbon Brief appears to back up Cohen’s analysis. The report says that renewable energy sources in China produced enough electricity in the first quarter of the year to “cut coal-power output even as demand surged,” with CO2 emissions down 1.6% year-on-year despite power demand growth. Carbon Brief adds that, if sustained, the findings would “herald a peak and sustained decline in China’s power-sector emissions.”
5. Trump family Bitcoin business adds personal stakes to energy policy
The Trump family is poised to have a fresh personal stake in U.S. electricity and energy policy as Eric Trump and Donald Trump, Jr. plan to take their Bitcoin mining firm public, E&E News reports. According to the announcement earlier this week, American Bitcoin — co-founded by Eric Trump — will merge with Gryphon Digital Mining Inc., which is already publicly traded.
Initially a subsidiary of Hut 8, an energy infrastructure partner with more than 1,000 megawatts of energy capacity, American Bitcoin boasted that with the merger, it will achieve “mining leadership” by leveraging Hut 8’s “energy advantage, rapid execution, and proven team.” Cryptocurrency mining is highly energy-intensive, accounting for an estimated 2.3% of the nation’s electricity use last year, and President Trump’s aspirations to have it “mined, minted, and made in the USA” are part of what his administration has used to justify its energy emergency. With American Bitcoin, the Trump family is also “delving deeper into the energy space where federal policies under Trump intersect directly with access to electricity and fuels,” E&E News writes, noting that Eric Trump stated at the launch of the company last April that “We’ve got the best energy policy in this country. That policy is only getting better.”
Penguin Random House
Nigerian author Abi Daré has won the inaugural Climate Fiction Prize for her novel And So I Roar. The book “follows fourteen-year-old Adunni from her life in Lagos, where she is excited to finally enroll in school, to her home village where she is summoned to face charges for events that are in fact caused by climate change.”
Tax credit transferability is a wonky concept, but it’s been a superpower for clean energy developers.
One of the most powerful innovations in the Inflation Reduction Act was a new vehicle to finance clean energy projects. In addition to expanding the nation’s tax credits for climate-friendly projects, Congress gave developers freedom to sell these credits for cash. If a battery factory couldn’t take full advantage of the tax credits itself, it could transfer them to someone else who could.
Now, Republicans on the House Ways and Means Committee have proposed getting rid of this “transferability” provision as part of a larger overhaul of the tax credits. A draft bill published on Monday would end the practice starting in 2028.
Nixing transferability isn’t the bill’s most damaging blow to clean energy — new sourcing requirements for the tax credits and deadlines that block early-stage projects pose a bigger threat. But the ripple effects from the change would permeate all aspects of the clean energy economy. At a minimum, it would make energy more expensive by making the tax credits harder to monetize. It would also all but shut nuclear plants out of the subsidies altogether.
Prior to the passage of the Inflation Reduction Act, if renewable energy developers with low tax liability wanted to monetize existing tax credits, they had to seek partnerships with tax equity investors. The investor, usually a major bank, would provide upfront capital for a project in exchange for partial ownership and a claim to its tax benefits. These were complicated deals that involved extensive legal review and the formation of new limited liability corporations, and therefore weren’t a viable option for smaller projects like community solar farms.
When the 2022 climate law introduced transferability across all the clean energy tax credits, it simplified project finance and channeled new capital into the clean energy economy. Suddenly, developers for all kinds of clean energy projects could simply sell their tax credits for cash on the open market to anyone that wanted to buy them, without ceding any ownership. The tax credit marketplace Crux estimated that a total of $30 billion in transfers took place last year, only about 30% of which were traditional tax equity deals. In the past, tax equity transfers have topped out at around $20 billion per year.
Schneider Electric, which has long helped corporate clients make power purchase agreements, now facilitates tax credit transfers, as well. The company recently announced that it had closed 18 deals worth $1.7 billion in tax credit transfers since late 2023. The buyers were all new to the market — none had directly financed clean energy before the IRA, Erin Decker, the senior director of renewable energy and carbon advisory services, told me.
It turns out, buying clean energy tax credits is a win-win for brands with sustainability commitments, which can reduce their tax liability while also helping to reduce emissions. Some companies have even used the savings they got through the tax credits to fund decarbonization efforts within their own operations, Decker said.
By simplifying project finance, and creating more competition for tax credit sales, transferability also made developing renewable energy projects cheaper. Developers of wind and solar farms have been able to secure upwards of 95 cents on the dollar for transferred tax credits, compared to just 85 to 90 cents for tax equity transactions. The savings go directly to utility customers.
“State regulators require electric companies to pass the benefits of tax credits through to customers in the form of lower rates,” the Edison Electric Institute wrote in a policy brief on the provision. “If transferability were repealed, electric companies once again would rely on big banks to invest in tax equity transactions, ultimately reducing the value of the credit that flows directly through to customers.”
Many of the companies that can’t count on tax equity deals will still have other options under the GOP proposal. Tax-exempt entities, like rural electric cooperatives and community solar nonprofits, can use “elective pay,” another IRA innovation that allows them to claim the credits as a direct cash payment from the IRS. For-profit companies developing carbon capture and advanced manufacturing projects also have the option to use elective pay for the first five years they operate. All of this raises questions about whether axing transferability would furnish the government with meaningful savings to offset Trump’s tax cuts.
But the bigger danger for Trump would be his nuclear agenda. Prior to the IRA, low power prices meant that many nuclear operators couldn’t afford to extend the licenses on their existing plants, even ones that had many years of useful life left in them. The IRA created a new tax credit for existing nuclear plants that made it economical for operators to invest in keeping these online, and even helped bring some, like the Palisades plant in Michigan, back from the dead.
This wouldn’t have worked without transferability, Benton Arnett, the senior director of markets and policy at the Nuclear Energy Institute, told me. Going forward, finding a tax equity partner would be nearly impossible because of the unique rules governing nuclear plants. Federal regulations require that the owners of a nuclear power plant be listed on its license, so bringing on a new owner means doing a license amendment — a headache-inducing process that banks simply don’t want to take on. “We’ve had members reach out to tax equity groups in the past and there was very little interest,” Arnett said
While a few plant owners might have enough tax appetite to benefit from credits directly, most have depreciating assets on their books that greatly reduce their liability. “Without transferability, for many of our members, it’s very difficult for them to actually monetize those credits,” said Arnett. “In a way, nuclear is disproportionately impacted by removing that ability to transfer.”
In February, Secretary of Energy Chris Wright declared that “the long-awaited American nuclear renaissance must launch during President Trump’s administration.” But so far on Trump’s watch, between the proposed loss of transferability and early phase-out of nuclear tax credits, plus cuts to loan programs at the Department of Energy, we’ve only seen policies that would kill the nuclear renaissance.