Mere hours after the House took an ax to clean energy tax credits in its budget bill, Senate Republicans already suggested that their counterparts had taken those cuts too far.
The House budget so severely constrains the Inflation Reduction Act’s clean energy tax credits that it will likely jeopardize significant energy and manufacturing investments — most of which are in Republican districts.
“During the next few days I’ll be talking to my colleagues really about why we should look at this from a surgical perspective and not a sledgehammer,” said Utah Sen. John Curtis, a Republican who has supported many of the Inflation Reduction Act’s tax credits and could prove a pivotal vote on the final product.
Curtis — an advocate for the “all of the above” energy strategy who just two weeks ago touted the energy investments spurred by the credits at an industry conference in Washington — is not the only one with this view in the Senate.
“You have companies that have already made investments, made commitments. Supply chains have been built around them, and we need to phase that out more slowly. I think that they deserve to have at least five years of that credit,” Ohio Sen. Jon Husted told NOTUS. “I hope as the bill comes over to the Senate that we can work on that, and on the manufacturing side, help ensure that those investments continue to get made.”
Companies have pledged billions of dollars in Ohio alone for ongoing and planned investments in manufacturing projects since the passage of the IRA.
Husted said that he does not approve of the government immediately reversing course on policy decisions: “We can’t completely pull the rug out from underneath these manufacturers,” he said.
In the first quarter of 2025, companies invested more than $67 billion in clean energy and related technologies in the United States, a 7% increase over the same time last year, according to the Clean Investment Monitor project. More than half of the projects, and around two-thirds of the jobs and investments linked to IRA credits, are in Republican Congressional districts, according to a December 2024 analysis from the clean energy advocacy nonprofit E2.
The House bill requires that any clean energy project — with exceptions for nuclear and carbon capture — start construction within 60 days of the bill’s passage and enter into use by the end of 2028 to benefit from the popular “technology-neutral” tax credits. That timeline, combined with very strict limits on sourcing materials from China, would make it nearly impossible for proposed projects to move forward, multiple energy groups warned Thursday.
Already operational projects may be at significant risk if the House changes made to the manufacturing tax credit are sustained by the Senate, according to Alisa Petersen, a federal policy manager at the Rocky Mountain Institute.
And companies have announced about $130 billion of investments in more rural areas alone that depend on the technology-neutral tax credits specifically, Petersen said. If the bill stays in its current form, those future investments would be at risk.
While the bill makes some limited exceptions to protect the nascent advanced nuclear industry, which is nearly universally popular with Republicans, even that extended timeline won’t provide support for most upcoming nuclear projects, warned the conservative energy innovation group Clearpath Action. The bill does not extend the same protections to other emerging advanced energy technologies, such as geothermal (a particular favorite of Curtis and Energy Secretary Chris Wright) and long-duration energy storage.
At several industry events over the last few weeks, clean energy groups and company executives told NOTUS they were preparing for this outcome from the House, but expected that the Senate would curtail the biggest cuts.
Several senators seemed to see that as their role already.
“I could see prospectively changing things, but we’ve got to try to do our best to help any businesses that have already made big investments,” said Sen. Thom Tillis, another moderate Republican. “I don’t mind directionally where they are headed, but we’ve got a lot of details to work out.”
Tillis and Curtis joined fellow Republicans Sens. Jerry Moran and Lisa Murkowski in signing a letter in April that urged the Senate to proceed with caution before repealing the tax credits.
“As the Trump Administration continues its efforts to reshore manufacturing and secure supply chains, maintaining a reliable energy tax environment is essential to attracting long-term investment, particularly in states that offer business-friendly climates,” the four senators wrote. “Repealing incentives that support energy development would undermine these objectives, slowing economic progress and job creation in key industries.”
“We’re going through the list very carefully,” Sen. Steve Daines told NOTUS. “There’s gonna be some items on there that we’re probably going to have some differences, probably more similarities than not.”
The IRA cuts were made at the insistence of the most conservative bloc in the House — so any major reversals from the Senate will likely pose problems for Speaker Mike Johnson, who needs to keep those conservative House members on board with the final product.
Other Republican senators said it was too early to say what they thought of the House’s tax credit moves on Thursday, given that the House had only passed the 1,100-page bill that same day just before 7 a.m.
“You know, I have been so focused on what’s going on over here, I don’t even know what’s in their bill,” Sen. Cynthia Lummis told NOTUS.
But with recess, senators have the next week to review the House’s provisions. Sen. Tommy Tuberville told NOTUS he was also unfamiliar with specific changes to the credits, but he said he’d take a close look at anything that could affect projects in Alabama.
“Everybody’ll look at that, cause we’re all building, manufacturing, back in the country. We need energy in the worst way,” he said.
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Emily Kennard is a NOTUS reporter and an Allbritton Journalism Institute fellow. Anna Kramer is a reporter at NOTUS.