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The One Big Beautiful Bill Act is one signature away from becoming law and drastically changing the economics of renewables development in the U.S. That doesn’t mean decarbonization is over, experts told Heatmap, but it certainly doesn’t help.
What do we do now?
That’s the question people across the climate change and clean energy communities are asking themselves now that Congress has passed the One Big Beautiful Bill Act, which would slash most of the tax credits and subsidies for clean energy established under the Inflation Reduction Act.
Preliminary data from Princeton University’s REPEAT Project (led by Heatmap contributor Jesse Jenkins) forecasts that said bill will have a dramatic effect on the deployment of clean energy in the U.S., including reducing new solar and wind capacity additions by almost over 40 gigawatts over the next five years, and by about 300 gigawatts over the next 10. That would be enough to power 150 of Meta’s largest planned data centers by 2035.
But clean energy development will hardly grind to a halt. While much of the bill’s implementation is in question, the bill as written allows for several more years of tax credit eligibility for wind and solar projects and another year to qualify for them by starting construction. Nuclear, geothermal, and batteries can claim tax credits into the 2030s.
Shares in NextEra, which has one of the largest clean energy development businesses, have risen slightly this year and are down just 6% since the 2024 election. Shares in First Solar, the American solar manufacturer, are up substantially Thursday from a day prior and are about flat for the year, which may be a sign of investors’ belief that buyer demand for solar panels will persist — or optimism that the OBBBA’s punishing foreign entity of concern requirements will drive developers into the company’s arms.
Partisan reversals are hardly new to climate policy. The first Trump administration gleefully pulled the rug from under the Obama administration’s power plant emissions rules, and the second has been thorough so far in its assault on Biden’s attempt to replace them, along with tailpipe emissions standards and mileage standards for vehicles, and of course, the IRA.
Even so, there are ways the U.S. can reduce the volatility for businesses that are caught in the undertow. “Over the past 10 to 20 years, climate advocates have focused very heavily on D.C. as the driver of climate action and, to a lesser extent, California as a back-stop,” Hannah Safford, who was director for transportation and resilience in the Biden White House and is now associate director of climate and environment at the Federation of American Scientists, told Heatmap. “Pursuing a top down approach — some of that has worked, a lot of it hasn’t.”
In today’s environment, especially, where recognition of the need for action on climate change is so politically one-sided, it “makes sense for subnational, non-regulatory forces and market forces to drive progress,” Safford said. As an example, she pointed to the fall in emissions from the power sector since the late 2000s, despite no power plant emissions rule ever actually being in force.
“That tells you something about the capacity to deliver progress on outcomes you want,” she said.
Still, industry groups worry that after the wild swing between the 2022 IRA and the 2025 OBBBA, the U.S. has done permanent damage to its reputation as a business-friendly environment. Since continued swings at the federal level may be inevitable, building back that trust and creating certainty is “about finding ballasts,” Harry Godfrey, the managing director for Advanced Energy United’s federal priorities team, told Heatmap.
The first ballast groups like AEU will be looking to shore up is state policy. “States have to step up and take a leadership role,” he said, particularly in the areas that were gutted by Trump’s tax bill — residential energy efficiency and electrification, transportation and electric vehicles, and transmission.
State support could come in the form of tax credits, but that’s not the only tool that would create more certainty for businesses — considering the budget cuts states will face as a result of Trump’s tax bill, it also might not be an option. But a lot can be accomplished through legislative action, executive action, regulatory reform, and utility ratemaking, Godfrey said. He cited new virtual power plant pilot programs in Virginia and Colorado, which will require further regulatory work to “to get that market right.”
A lot of work can be done within states, as well, to make their deployment of clean energy more efficient and faster. Tyler Norris, a fellow at Duke University's Nicholas School of the Environment, pointed to Texas’ “connect and manage” model for connecting renewables to the grid, which allows projects to come online much more quickly than in the rest of the country. That’s because the state’s electricity market, ERCOT, does a much more limited study of what grid upgrades are needed to connect a project to the grid, and is generally more tolerant of curtailing generation (i.e. not letting power get to the grid at certain times) than other markets.
“As Texas continues to outpace other markets in generator and load interconnections, even in the absence of renewable tax credits, it seems increasingly plausible that developers and policymakers may conclude that deeper reform is needed to the non-ERCOT electricity markets,” Norris told Heatmap in an email.
At the federal level, there’s still a chance for, yes, bipartisan permitting reform, which could accelerate the buildout of all kinds of energy projects by shortening their development timelines and helping bring down costs, Xan Fishman, senior managing director of the energy program at the Bipartisan Policy Center, told Heatmap. “Whether you care about energy and costs and affordability and reliability or you care about emissions, the next priority should be permitting reform,” he said.
And Godfrey hasn’t given up on tax credits as a viable tool at the federal level, either. “If you told me in mid-November what this bill would look like today, while I’d still be like, Ugh, that hurts, and that hurts, and that hurts, I would say I would have expected more rollbacks. I would have expected deeper cuts,” he told Heatmap. Ultimately, many of the Inflation Reduction Act’s tax credits will stick around in some form, although we’ve yet to see how hard the new foreign sourcing requirements will hit prospective projects.
While many observers ruefully predicted that the letter-writing moderate Republicans in the House and Senate would fold and support whatever their respective majorities came up with — which they did, with the sole exception of Pennsylvania Republican Brian Fitzpatrick — the bill also evolved over time with input from those in the GOP who are not openly hostile to the clean energy industry.
“You are already seeing people take real risk on the Republican side pushing for clean energy,” Safford said, pointing to Alaska Republican Senator Lisa Murkowski, who opposed the new excise tax on wind and solar added to the Senate bill, which earned her vote after it was removed.
Some damage has already been done, however. Canceled clean energy investments adds up to $23 billion so far this year, compared to just $3 billion in all of 2024, according to the decarbonization think tank RMI. And that’s before OBBBA hits Trump’s desk.
The start-and-stop nature of the Inflation Reduction Act may lead some companies, states, local government and nonprofits to become leery of engaging with a big federal government climate policy again.
“People are going to be nervous about it for sure,” Safford said. “The climate policy of the future has to be polycentric. Even if you have the political opportunity to make a big swing again, people will be pretty gun shy. You will need to pursue a polycentric approach.”
But to Godfrey, all the back and forth over the tax credits, plus the fact that Republicans stood up to defend them in the 11th hour, indicates that there is a broader bipartisan consensus emerging around using them as a tool for certain energy and domestic manufacturing goals. A future administration should think about refinements that will create more enduring policy but not set out in a totally new direction, he said.
Albert Gore, the executive director of the Zero Emission Transportation Association, was similarly optimistic that tax credits or similar incentives could work again in the future — especially as more people gain experience with electric vehicles, batteries, and other advanced clean energy technologies in their daily lives. “The question is, how do you generate sufficient political will to implement that and defend it?” he told Heatmap. “And that depends on how big of an economic impact does it have, and what does it mean to the American people?”
Ultimately, Fishman said, the subsidy on-off switch is the risk that comes with doing major policy on a strictly partisan basis.
“There was a lot of value in these 10-year timelines [for tax credits in the IRA] in terms of business certainty, instead of one- or two- year extensions,” Fishman told Heatmap. “The downside that came with that is that it became affiliated with one party. It was seen as a partisan effort, and it took something that was bipartisan and put a partisan sheen on it.”
The fight for tax credits may also not be over yet. Before passage of the IRA, tax credits for wind and solar were often extended in a herky-jerky bipartisan fashion, where Democrats who supported clean energy in general and Republicans who supported it in their districts could team up to extend them.
“You can see a world where we have more action on clean energy tax credits to enhance, extend and expand them in a future congress,” Fishman told Heatmap. “The starting point for Republican leadership, it seemed, was completely eliminating the tax credits in this bill. That’s not what they ended up doing.”
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At Heatmap House’s third session of the day, “Up Next in Climate Tech,” investors Tom Steyer and Dawn Lippert chart a path forward for the clean energy economy.
Tom Steyer is still riding the wave.
The climate investor and philanthropist told the audience at Heatmap House’s third session of the day, “Up Next in Climate Tech,” that he started his investment firm Galvanize in 2021 because “there’s a huge, powerful wave behind us.” And now, after the One Big Beautiful Bill Act and the Trump administration’s regulatory assault on renewables? “Does any of that change? No, it’s better,” Steyer said.
Steyer was skeptical that the oil and gas industry could ultimately compete with clear energy, even with the current administration’s support.
“For the people who never look at the numbers, for the people who don’t pay attention to actual investment decisions, costs, profit margins, you can say whatever you want. But I’ll tell you this: The rig count is down 10% to 20% in 2025 in America. That’s a statement about future profitability” of the oil industry Steyer said, pointing to declining domestic drilling.
For Steyer, the math is simple. A huge portion of demand for oil comes from the transportation sector, and the movement towards electric vehicles is “unstoppable.”
“We’re talking about a commodity with a worldwide price where we’re the biggest producers of oil in the world,” Steyer said. He noted that the U.S. is also the “high-cost producer” compared to countries like Saudi Arabia, which can produce oil more cheaply than in the U.S. shale patch.
So if there’s such a huge market opportunity for clean energy businesses, can they get funded? That’s the challenge fellow investor Dawn Lippert is trying to solve. Lippert is the founder and chief executive of Elemental, a non-profit climate investment firm. The trick she’s trying to perfect is to attract investors beyond the specialized, earlier stage investor group that typically seeds decarbonization, who can fund actual, steel-in-the-ground projects.
“We are trying to finance the energy transition with venture capital,” referring to the broader financing community. “It’s a total mistake.”
Venture capital has catalyzed “a huge wave of technology, invention, and technologies that are really working,” Lippert added. What’s happening now is that those companies are “trying to deploy, they’re trying to build their first plants, trying to build their second plants. It takes quite a lot of capital, and there’s no one to hand it out on the financial infrastructure side. They’re not ready for infrastructure investors. They’re definitely not ready for banks.”
This problem of “bankability,” or the “missing middle,” has bedeviled the climate tech sector for years, as technologically innovative energy projects struggle to get funding from infrastructure investors who want projects that can produce predictable cash flows, not risky venture-stage experiments.
Elemental developed an investment vehicle called a D-SAFE — a.k.a. a Development Simple Agreement for Future Equity — to help solve this problem. The D-SAFE is an investment agreement that can unlock future investment by pointing investment directly at development costs. “A development SAFE says, I’m going to give you dollars, and I’m going to get those dollars back when you hit specific milestones,” Lippert said.
So far, Elemental has done nine D-SAFEs. “We’re trying to create much simpler financial infrastructure so that financial innovation can catch up to where technology innovation is, and we can stop slowing things down,” Lippert said.
The challenge for American climate technology and infrastructure companies will be to compete with state-supported Chinese businesses, Lippert said. “China actually does have a very methodical way of putting a ton of state capital into these companies to get them all the way through. We don’t have that in this country, so we have to be much more creative and make sure that companies where technology is working are not falling into a scale gap just because we can’t get our act together.”
At Heatmap House’s second session, speakers including Senator Brian Schatz of Hawaii looked overseas to spot the clean energy future.
None of the speakers at Heatmap House’s second session at New York Climate Week, “Built to Scale,” minced words when it came to describing the current U.S. policy environment. The global fight to decarbonize is still happening, our guests emphasized — but it might happen without the U.S.
Senator Brian Schatz of Hawaii emphasized in his discussion with Heatmap’s Robinson Meyer that in previous years, he would assure his international colleagues that the U.S. was still fully invested in the climate fight. What about now? “I would say we will be back — but do not wait for us,” Schatz said.
Ricardo Falu, executive vice president and chief operating officer at AES corporation, touched on a similar point while speaking with my colleague Emily Pontecorvo. His company, which invests in clean energy projects in addition to natural gas at home and abroad, has found particular success in Chile, where the regulatory environment has proved especially fruitful for renewables. “In many other countries, you don't need incentives for renewables. They are competitive,” Falu pointed out. “You don’t need the government financing or the government to be involved.”
This isn’t to say that there’s no hope whatsoever for climate progress in the U.S., our speakers made sure to highlight. We might just have to refrain from calling it “climate progress.” Schatz pointed out that the language of affordability will come to define clean energy projects moving forward, echoing what Senator Chuck Schumer said earlier in the day. “Cheap is clean, and clean is cheap,” said Schatz. “We don't have to make a complicated argument.”
This framing from Schatz and Schumer makes perfect sense in the context of the new package of energy proposals from House Democrats announced this morning, fittingly called the Cheap Energy Act. As my colleague Robinson wrote today, “Democrats have reoriented to talking about energy chiefly as an affordability problem.” Schatz summed up the strategy thusly: “We have to just say, ‘See that spike in electricity prices? It’s their fault. Solar is cheap.’”
Data centers and the rapid growth of AI were also top of mind for panelists. The tension between AI growth objectives and renewables didn’t seem to be an issue, however. Rather, our speakers pointed out, data center growth could be an opportunity to invest in a stronger renewables rollout. Jake Oster, director of sustainability at Amazon, told Heatmap’s Katie Brigham that “the first thing we're focused on is energy efficiency in our facilities.”
Carla Peterman, executive vice president at PG&E, was even more unequivocal in her support. “We know that our communities, our society will benefit from having that load and having those data centers,” she remarked. “We don’t want to block bringing them on.”
The Senate Minority Leader addressed the crowd at New York Climate Week, talking about energy costs, extreme weather, and Trump’s “Big Ugly Bill.”
Senate Minority Leader Chuck Schumer kicked off Heatmap House, a daylong series of panels and one-on-one conversations with investors, founders, and policymakers at New York Climate Week, with a rousing condemnation of the Trump administration’s climate policies and a call to action for climate advocates everywhere.
“Why, with AI creating a huge demand for energy, would we cut off the quickest and cleanest way to get new electrons on the grid — solar? It’s the quickest, it’s the cheapest. Why would we do that?,” Schumer asked at the start of our morning session, “The Big (Green) Apple: Building a Climate Ready NYC.” The senator (a born and raised Brooklynite, who has served as a senator from New York since 1998) was of course referring to Republicans’ One Big Beautiful Bill Act, which accelerated the sunsetting of wind and solar tax credits that were previously expanded and extended under the Inflation Reduction Act.
Schumer played a key role in the passage of the IRA, wrangling with former Senator Joe Manchin of West Virginia for months in the summer of 2022 to get the bill over the finish line. At Heatmap House, Schumer described the experience of watching what he deemed “The Big Ugly Bill” roll back many of his hard-fought wins.
“New York remains the climate leader, but Donald Trump is doing everything in his power to kill solar, wind, batteries, EVs and all climate friendly technologies while propping up fossil fuels, Big Oil, and polluting technologies that hurt our communities and our growth,” Schumer said. The administration’s actions are killing jobs, he asserted, while “making it harder and more costly for everyday Americans to live and breathe.”
One of the most tangible ways that Americans across the country are experiencing climate change is through more frequent and more severe extreme weather events such as fires, hurricanes, and floods. Last year, Schumer noted, was one of the costliest on record for natural disasters in the US, totaling about $182 billion of damage. The increasing frequency ing frequency of billion-dollar disasters is hitting ordinary Americans in the pocketbook. “Home insurance costs in a whole bunch of states are skyrocketing because of all of these disasters,” Schumer explained, adding that Americans are beginning to recognize how rising emissions are connected to their own rising costs.
But Schumer is no pessimist, and he charted a path forward for Democrats to take back the Senate and resurrect the clean energy policies in the IRA. “All of us must fight back, connecting the dots with the American people. When electricity goes up, it’s because of what Trump did. When your home insurance goes up, it’s because of what Trump did, when it’s going to be harder to make your house cheaper because it’ll consume less energy, it’s because of what Trump did.”
With the cost of living weighing heavily on many Americans, Schumer said now is the time to “harmonize the message” around prices and Trump’s energy policies. And he paired that call to action with a bold promise indeed. “If we take back the Senate, all the good things we’ve done in the IRA will be fully and completely restored, and we’ll go even further than that.”