Republican Senator Joni Ernst has introduced an amendment to the US Senate’s sweeping tax and spending bill aimed at softening provisions that critics say would penalise wind and solar energy projects. Backed by fellow Senators Chuck Grassley of Iowa and Lisa Murkowski of Alaska, the proposal seeks to eliminate a new tax targeting clean energy projects starting after 2027, and instead allow tax credits to be awarded based on the start of construction rather than their operational date.
The amendment will be debated during Monday’s “vote-a-rama” — a marathon session in which senators consider a slew of amendments to President Donald Trump’s flagship tax and spending legislation. The bill, unveiled over the weekend, has come under fire from both business and labour groups, with opponents warning it could trigger power shortages, increase electricity bills, and result in widespread job losses.
Iowa, represented by both Ernst and Grassley, derives more than 60% of its electricity from wind, prompting the pair to challenge the bill’s implications for the state’s energy sector. The amendment has gained traction among other Republicans who view the proposed renewable energy taxes as harmful.
The legislation seeks to roll back clean energy incentives introduced under President Joe Biden’s 2022 Inflation Reduction Act. In its current form, the bill imposes new requirements on clean energy technologies, including proof that components are not sourced from China, and would introduce an excise tax on projects failing to meet these criteria. Analysts at the Rhodium Group estimate the tax would raise the cost of wind and solar energy by 10–20%, in addition to the loss of existing tax credits.
Tech entrepreneur Elon Musk joined the chorus of critics, warning that the legislation could “be incredibly destructive to America,” citing potential impacts on the development of energy-intensive artificial intelligence technologies. “Taxing energy production is never good policy, whether oil & gas or, in this case, renewables,” said Neil Bradley, policy director of the US Chamber of Commerce.
While the bill has been welcomed by some for targeting reliance on Chinese components, others caution it could undermine domestic clean energy investment. South Korean solar manufacturer Qcells, which has invested $2.5 billion in US facilities, voiced partial support for the Ernst amendment but maintained that the excise tax should remain in place to bolster US manufacturing.
The debate comes amid concerns over electricity grid reliability. Energy Secretary Chris Wright defended the bill, arguing that over-reliance on intermittent renewable sources weakens the grid. However, Texas grid operator ERCOT reported last week that the state is well-prepared for summer demand, crediting recent growth in solar and battery storage.
Labour representatives also issued strong warnings. Sean McGarvey, president of North America’s Building Trades Unions, claimed the bill could be “the biggest job-killing bill in the history of this country,” likening its impact to scrapping over 1,000 Keystone XL pipeline projects.
Meanwhile, Republican Senator Thom Tillis, who voted against the bill’s advancement, criticised it for ignoring the sharp rise in electricity demand from data centres and predicted disruptions in gas generation development. His stance has drawn ire from Trump and sparked speculation about his political future.
Democratic Senator Brian Schatz of Hawaii also warned that the bill would drive up consumer costs. “You don’t have to love clean energy or be an environmentalist to understand that this is a basic question of supply and demand,” he said.
