You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
Anything decarbonization-related is on the chopping block.
The Biden administration has shoveled money from the Inflation Reduction Act out the door as fast as possible this year, touting the many benefits all that cash has brought to Republican congressional districts. Many — in Washington, at think tanks and non-profits, among developers — have found in this a reason to be calm about the law’s fate. But this is incorrect. The IRA’s future as a climate law is in a far more precarious place than the Beltway conventional wisdom has so far suggested.
Shortly after the changing of the guard in Congress and the White House, policymakers will begin discussing whether to extend the Trump-era tax cuts, which expire at the end of 2025. If they opt to do so, they’ll try to find a way to pay for it — and if Republicans win big in the November elections, as recent polling and Democratic fretting suggests could happen, the IRA will be an easy target.
Yes, the law has created a ton of jobs in states and congressional districts controlled by Republicans. Sure, some in the GOP have moderated on climate and stopped denying the science behind the warming of our planet. Absolutely, the IRA is the kind of all-carrot and no-stick approach to energy that Republicans tend to like, and there would be legal and political challenges to accomplishing anything of consequence in today’s polarized and chaotic Congress.
But while some lawmakers may be evolving on climate, the broader GOP under Trump’s control has grown far more willing to spurn its pro-business past and give industries heartburn in pursuit of other ideological or cultural objectives.
“The Republican Party’s traditional views on climate and business are both changing and result in competing pressures,” Alex Flint, a longtime Senate Republican energy staffer, told me. Flint now runs the pro-business climate group Alliance for Market Solutions. “There is less climate denialism. And less support for business. So on the one hand, more Republicans are comfortable supporting climate policies like those in the IRA, but are less responsive to the businesses that want to defend those programs.”
What that means is that, in the event of a big GOP victory, anything impossible to fully repeal may be fiddled with, whether through legislative or administrative means. On top of all the energy and climate regulations that would be targeted in that event, the nation’s transition away from fossil fuels could lose significant federal policy tailwinds.
On the legislative side, there is already broad GOP support for: repealing the consumer electric vehicle and charging station benefits, nixing the methane fee, killing the national “green bank” program, and eliminating any money labeled “environmental justice.” Broader programs with immense importance to decarbonization such as the “clean electricity” investment and production tax credits could be diminished or gutted at the urging of the party’s rightward flank. (See: this GOP committee chair’s IRA repeal bill, which targeted the investment and production tax credits, specifically.)
Anything that cannot be repealed — as the Heritage Foundation’s Project 2025 instructs — Republicans will attempt to modify. Mike Faulkender, a former Trump official at the Treasury Department who is now chief economist for the America First Policy Institute, explained to me for an Axios story last October that if Trump wins, “We are going to review every rule, every notice, everything the administration has done in its implementation of that statute.” Demonstrating his seriousness, Faulkender also pointed to the IRA’s credit for carbon removal. “The dollar values on this are extraordinary … I would go through that statute and see how we, through the rulemaking process, can narrow it as much as possible.”
It is possible to take these threats with a grain of salt. Kimberly Clausing, a former Biden official for the Treasury Department, told me that while she can imagine “one or two elements” of the law being revisited if they’re political priorities, it would require “too many lawyer man-hours” to “justify that kind of wholescale implementation pivot.”
Industries would also lobby heavily to avoid their credits going away. Going after the tech-neutral ITC and PTC, for example, could spark an immense backlash among a swath of energy sectors Republicans do support, including nuclear energy. Same for incentives to advanced manufacturing. Not to mention there are substantial logistical realities to repealing the IRA or changing its programs, as with Obamacare in the past. Such an effort would require organizing GOP lawmakers at a time when infighting has undermined even seeming slam dunks like a ban on gas stove bans.
But seasoned political veterans and D.C. industry pros I spoke with for this story noted that Republicans may be more receptive to tweaking programs in a selective fashion, going after industries like solar and offshore wind that some have long-standing grievances with. For example, it may be too difficult to repeal the “tech-neutral” electricity credits in their entirety, but legislators could try to limit their reach for these less-favored sectors — as some have proposed doing for solar projects on farmland — in the name of saving the government money or helping other favored interests.
Energy lobbying veteran Frank Maisano put it to me this way: “Businesses will support many things that they have their tentacles into and Republicans will support many things that are going on in their districts that constituents like. The reality is, if you’re going to try to repeal it, you’re going to have to do it through Congress and a lot of the action in the energy transition is in Republican districts. It becomes a constituent issue.”
Or, in plain English: If it’s a successful project in a GOP constituent district and their specific voters like it, that will be what has the most sway.
That won’t stop Republicans from claiming that the renewable sector as a whole is flagging. In an interview with E&E News’ Kelsey Brugger, House Majority Leader Steve Scalise responded to the question of whether the jobs created by the IRA would put Republicans in a tough spot on repeal by — dubiously — downplaying the figures. “Overall, there haven’t been many projects built,” Scalise said. “We’re scrutinizing all of it.”
There’s a reason for this: It creates an opening to point to real market struggles (though possibly in a selective fashion) as a predicate for squeezing benefits to renewables. It’s easy to imagine a world where the impacts of tariffs on domestic solar or hurdles facing offshore wind are used as rationale for paring back credits and other federal supports. You might not be hearing much about this right now as the GOP is quietly letting Democrats knife themselves, but it’ll be worth watching the Republican National Convention next week to see if anyone spills the tea on plans for the IRA next year.
“Which of [these] forces prevail on any specific IRA program and on the totality of the IRA package is impossible to predict,” said Flint, “because members – Republicans who acknowledge the need to address climate – may be aligned with companies that receive those subsidies. But on the other hand, populists not closely aligned with business interests may be willing to criticize those programs without regard to their climate benefits. So what happens to climate policies and all of the IRA is a test case for the future of the Republican Party.”
Developers are starting to ask questions about the durability of IRA programs, Abigail Ross Hopper, president of the Solar Energy Industries Association, told me. Hopper’s optimistic that the marketplace will continue to favor solar. But she is clear-eyed about the risks ahead for certain aspects of the IRA – naming bonuses and the transferability of credits — that may not survive in their current form.
“People ask me all the time about, ‘How do I make educated opinions, not prognostications?’” she said. “There is this kind of built in uncertainty because of the partisanship that clean energy has unfortunately [had] imposed upon us … I am in agreement that the pace of decarb is going to be impacted by these elections and policy decisions. [But] I am not persuaded that we’re going to stop these efforts.”
To Hopper and others, at most risk is any unspent money or unused spending authority left over at agencies at the conclusion of Biden’s first term. Those supports face “probably the highest risk of clawback or not being spent,” she said.
Some agencies are still moving at a brisk pace that has reassured those in industry and advocacy spaces. The Treasury Department has signaled it may complete implementation of several key IRA credits — including the “clean electricity” investment and production tax credits — before Jan. 20, 2025. And the Environmental Protection Agency’s been quite successful at doling out dollars that would otherwise be targeted in a future GOP-controlled Congress, such as those the IRA provided for the Solar For All program and the green bank initiative. These dollars will live on independent of who remains president because once they’re given to states or nonprofits, those parties get to decide how to spend them.
But there are still billions that may wind up in Trump’s control should he win in November. One example is the Department of Energy’s home electrification rebates, which received $8.8 billion. Despite almost all states applying for at least some of the funding, per DOE’s own tracker, only five have been accepted, and only one – New York – had made those rebates available as of this week.
“I’m under the assumption that if it’s not going out in January 2025, then it’s not going out the door,” Harrison Godfrey, who works for energy policy shop Advanced Energy United, told me. “If the dollars get out the door, then the story of ‘25 is that regardless of who’s president, the states are in the driver’s seat.”
There are aspects of the IRA that could survive even a Republican trifecta. The law’s support for low-carbon fuels enjoys apparent bipartisan backing because of the lifeline it can offer corn-based ethanol as the federal renewable fuel standard wanes in relevance. And despite grousing about Biden’s implementation of the hydrogen tax credit, it’s easier to imagine industry lobbying for a rule change under Trump than it is a full-scale repeal of a credit that could be a boon to the oil and gas sector.
Meanwhile, the administration and other industry groups continue to sound an optimistic note.
“The Inflation Reduction Act credits have spurred a clean energy boom in communities across the country and markets have responded overwhelmingly,” Treasury spokesperson Michael Martinez told me in a statement. Jason Ryan, a spokesperson for American Clean Power, said that “with the new tax credits in place,” more than $488 billion investments have been announced, including new or expanded utility-scale manufacturing plants, and that “with over a third of those manufacturing facilities already up and running or under constructions, these numbers translate to real-world positive impacts.”
But even if some of the IRA remains, without regulations to drive demand for decarbonization solutions, its climate benefits would be substantially undermined. One must look only at research from Clausing and others, who found even a partial IRA repeal combined with weakened EPA regulations could significantly harm odds of meeting the current administration’s goal of slashing emissions in half by 2030.
In other words, deep breaths! It’s only four months until the election and six months until the tax conversation begins.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
And more on the week’s biggest conflicts around renewable energy projects.
1. Jackson County, Kansas – A judge has rejected a Hail Mary lawsuit to kill a single solar farm over it benefiting from the Inflation Reduction Act, siding with arguments from a somewhat unexpected source — the Trump administration’s Justice Department — which argued that projects qualifying for tax credits do not require federal environmental reviews.
2. Portage County, Wisconsin – The largest solar project in the Badger State is now one step closer to construction after settling with environmentalists concerned about impacts to the Greater Prairie Chicken, an imperiled bird species beloved in wildlife conservation circles.
3. Imperial County, California – The board of directors for the agriculture-saturated Imperial Irrigation District in southern California has approved a resolution opposing solar projects on farmland.
4. New England – Offshore wind opponents are starting to win big in state negotiations with developers, as officials once committed to the energy sources delay final decisions on maintaining contracts.
5. Barren County, Kentucky – Remember the National Park fighting the solar farm? We may see a resolution to that conflict later this month.
6. Washington County, Arkansas – It seems that RES’ efforts to build a wind farm here are leading the county to face calls for a blanket moratorium.
7. Westchester County, New York – Yet another resort town in New York may be saying “no” to battery storage over fire risks.
Solar and wind projects are getting swept up in the blowback to data center construction, presenting a risk to renewable energy companies who are hoping to ride the rise of AI in an otherwise difficult moment for the industry.
The American data center boom is going to demand an enormous amount of electricity and renewables developers believe much of it will come from solar and wind. But while these types of energy generation may be more easily constructed than, say, a fossil power plant, it doesn’t necessarily mean a connection to a data center will make a renewable project more popular. Not to mention data centers in rural areas face complaints that overlap with prominent arguments against solar and wind – like noise and impacts to water and farmland – which is leading to unfavorable outcomes for renewable energy developers more broadly when a community turns against a data center.
“This is something that we’re just starting to see,” said Matthew Eisenson, a senior fellow with the Renewable Energy Legal Defense Initiative at the Columbia University Sabin Center for Climate Change Law. “It’s one thing for environmentalists to support wind and solar projects if the idea is that those projects will eventually replace coal power plants. But it’s another thing if those projects are purely being built to meet incremental demand from data centers.”
We’ve started to see evidence of this backlash in certain resort towns fearful of a new tech industry presence and the conflicts over transmission lines in Maryland. But it is most prominent in Virginia, ground zero for American hyperscaler data centers. As we’ve previously discussed in The Fight, rural Virginia is increasingly one of the hardest places to get approval for a solar farm in the U.S., and while there are many reasons the industry is facing issues there, a significant one is the state’s data center boom.
I spent weeks digging into the example of Mecklenburg County, where the local Board of Supervisors in May indefinitely banned new solar projects and is rejecting those that were in the middle of permitting when the decision came down. It’s also the site of a growing data center footprint. Microsoft, which already had a base of operations in the county’s town of Boydton, is in the process of building a giant data center hub with three buildings and an enormous amount of energy demand. It’s this sudden buildup of tech industry infrastructure that is by all appearances driving a backlash to renewable energy in the county, a place that already had a pre-existing high opposition risk in the Heatmap Pro database.
It’s not just data centers causing the ban in Mecklenburg, but it’s worth paying attention to how the fight over Big Tech and solar has overlapped in the county, where Sierra Club’s Virginia Chapter has worked locally to fight data center growth with a grassroots citizens group, Friends of the Meherrin River, that was a key supporter of the solar moratorium, too.
In a conversation with me this week, Tim Cywinski, communications director for the state’s Sierra Club chapter, told me municipal leaders like those in Mecklenburg are starting to group together renewables and data centers because, simply put, rural communities enter into conversations with these outsider business segments with a heavy dose of skepticism. This distrust can then be compounded when errors are made, such as when one utility-scale solar farm – Geenex’s Grasshopper project – apparently polluted a nearby creek after soil erosion issues during construction, a problem project operator Dominion Energy later acknowledged and has continued to be a pain point for renewables developers in the county.
“I don’t think the planning that has been presented to rural America has been adequate enough,” the Richmond-based advocate said. “Has solar kind of messed up in a lot of areas in rural America? Yeah, and that’s given those communities an excuse to roll them in with a lot of other bad stuff.”
Cywinski – who describes himself as “not your typical environmentalist” – says the data center space has done a worse job at community engagement than renewables developers in Virginia, and that the opposition against data center projects in places like Chesapeake and Fauquier is more intense, widespread, and popular than the opposition to renewables he’s seeing play out across the Commonwealth.
But, he added, he doesn’t believe the fight against data centers is “mutually exclusive” from conflicts over solar. “I’m not going to tout the gospel of solar while I’m trying to fight a data center for these people because it’s about listening to them, hearing their concerns, and then not telling them what to say but trying to help them elevate their perspective and their concerns,” Cywinski said.
As someone who spends a lot of time speaking with communities resisting solar and trying to best understand their concerns, I agree with Cywinksi: the conflict over data centers speaks to the heart of the rural vs. renewables divide, and it offers a warning shot to anyone thinking AI will help make solar and wind more popular.
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 OBBA, 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 Emissions 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.”