Senate Bill Threatens 330,000 Jobs, Solar Industry With 30% ITC Phase-Out

The budget negotiations in Congress are poised to significantly alter the energy industry, not by advancing it, but by potentially setting it back. The “One Big Beautiful Bill” (OBBB), recently revised by the Senate Finance Committee, is marketed as a comprehensive reform. However, it actually weakens domestic energy production at a time when the country is facing increasing demand, thereby reducing energy resilience and adding at least $2.8 trillion to the national debt.

The most significant change in the OBBB is the gutting of one of the most effective energy incentives in the country: the 30% Investment Tax Credit (ITC). For homeowners, the ITC significantly reduces the cost of transitioning to solar energy. As currently written, the OBBB would phase out certain elements of the ITC for homeowners within 180 days and the remainder of the credits starting at the end of this year, with full incentive elimination for businesses at the end of 2027. This abrupt phase-out is particularly disruptive given that even a simple solar project currently takes up to six months to complete.

The solar industry should not rely on federal tax credits indefinitely, as this was never the intention of the initial ITC proposal enacted in the Inflation Reduction Act (IRA). However, the OBBB’s abrupt repeal would cause severe and immediate harm, potentially destabilizing the entire American solar industry. Without a more structured, longer-term phase-down timeline, developers, manufacturers, and installers will scramble to meet tight deadlines and face a massive drop in demand shortly thereafter. This threatens project viability, workforce stability, and long-term investments. This bill jeopardizes up to 330,000 jobs and 331 U.S. factories.

The current bill also undermines the appeal of investing in domestic energy. Many hundreds of billions of dollars have been invested in renewable energy based on policies set by Congress. This legislation will make potential investors question the reliability of U.S. policy as a foundation for long-term investment. Such unpredictability raises serious doubts about the stability of the U.S. market for renewable energy investments.

Instead, Congress should pursue a steady phase-down of tax credits, which would allow the industry to adapt, preserve many thousands of jobs, and ensure that our ever-growing energy needs are met. The IRA also spurred investment in large-scale solar projects that connect directly to the grid and help power entire communities. These projects often rely on low-cost financing provided through federal loan programs. The OBBB would eliminate this low-cost financing, significantly undercutting the financial viability of many solar energy projects. If developers are unable to secure alternative financing, many solar projects would likely be scrapped altogether. This would inevitably increase utility costs—expenses that are often passed directly to the customer.

Homeowners are already unhappy with the current state of utilities, particularly in light of extreme weather events and widespread outages. If these solar projects are delayed or shut down due to lack of funding, other energy sources will not be able to meet demand in a timely or cost-effective manner. And while fossil fuels have historically been a flexible, reliable option, equipment backlogs now force developers to reserve gas turbines seven to eight years in advance, so new projects wouldn’t enter service until 2031 or later. Nuclear energy is pushed even further out: The U.S. Department of Energy’s Pathways to Commercial Liftoff report notes that broad deployment of next-generation reactors is unlikely to begin before 2035.

That leaves solar as the best solution to meet our energy needs, avoid blackouts, and keep energy costs under control as we enter the AI revolution. A large-scale, commercial solar project can be deployed in 12 to 18 months, and projects in recent years have been completed at 40% less than the cost of gas plants today. While interconnection remains a challenge in some regions, solar still offers the fastest, most cost-effective path to adding new capacity at scale. And now that grid-scale energy storage is commercially viable, it’s the ideal complement to solar—ensuring reliable, round-the-clock power.

Residential solar and storage can be installed even faster. This makes solar the only scalable way to add generation capacity to the grid in the timeframes we need. And there’s bipartisan support, with 82% of Democrats, 74% of Republicans, and 73% of independents indicating that solar is a good investment. That’s how we can meet energy demand, lower energy costs, and keep everyone happy.

The Senate is expected to vote this week, with President Trump pushing to pass the bill by July 4. We’re at a critical juncture, and the potential ramifications are far-reaching. The decisions made in Washington now will shape the trajectory of America’s economic and energy leadership for decades to come. The OBBB, as currently written, will effectively cede leadership of the solar industry to China. Global demand for solar isn’t slowing down, and if the U.S. steps back, others will take our place.

At a time when consumers want more control over their energy and the demand for electricity is at an all-time high, energy independence is more important than ever. This bill moves us in exactly the wrong direction. Our leaders and lawmakers have to push back, advocate for a forward-thinking energy policy, and defend the future of resilient, affordable, and accessible power for all.