Solar and Wind Excise Tax Stripped From Latest GOP Megabill (1)

The excise tax seen as an existential threat to the solar and wind industry has been stripped from the Senate GOP tax megabill that passed the chamber in a tie-breaking vote Tuesday.

The levy on projects with certain Chinese components was added late and stunned renewable energy advocates and businesses. Though the tax fell away, some clean electricity credit provisions still include significantly shorter phaseouts, senators managed to soften the edges of others.

Because of China’s dominance of the solar supply chain, industry worried that developers would struggle to find ample equipment from other countries. Shares of solar firms soared Tuesday after news broke that the excise tax would fall away.

Earlier, GOP Iowa Sens. Joni Ernst and Chuck Grassley, along with Lisa Murkowski of Alaska, sought to advance an amendment to soften the clean electricity tax credit phaseout and jettison the proposed excise tax.

Ernst said Tuesday after the all-night vote marathon that she didn’t think the amendment would be brought up.

“There’s a lot of stuff that went on overnight, that kind of waylaid a lot of our plans,” Ernst told reporters. All voted for final passage.

In addition to stripping the excise tax, the legislation also gives projects under construction or breaking ground within a year an exemption from more aggressive credit phaseouts that require projects to be placed in service before 2028.

Sens. Thom Tillis (R-N.C.), Rand Paul (R-Ky.), and Susan Collins (R-Maine) joined with all Democrats in voting against President Donald Trump’s signature $3.3 trillion tax-and-spending bill.

Collins criticized the scaling back and cuts to energy-focused tax credits, saying she believed the legislation also should have kept in incentives for homeowners seeking to install heat pumps and residential solar panels.

Murkowski (R-Alaska), a holdout who cast the pivotal vote to pass the bill, told reporters afterward that the legislation isn’t perfect “by any stretch of the imagination.”

“My hope is that the House is going to look at this and recognize that we’re not there yet,” she said.

But it might not come back to her chamber: House Speaker Mike Johnson (R-La.) said his chamber would quickly take up the bill and try to get it to Trump by July 4.