With the Senate embroiled in debating the details of the reconciliation bill (H.R. 1), Senator Jodi Ernst (Iowa) proposed an amendment, cosponsored by Republican Sens. Chuck Grassley (Iowa) and Lisa Murkowski (Alaska), that changes language of tax credit phase out to “begins construction” instead of when production begins.
This amendment goes a step further than the Hickenlooper amendment (Amendment 2719) that called to extend the 25D residential solar tax credit through the end of 2026. This amendment was rejected on a vote of 48 to 52.
Solar investment skyrocketed in the United States since passage of the Inflation Reduction Act of 2022. And despite the fact that solar is the fastest form of energy deployed to the grid, it can take a year or more between when construction begins on a large solar power plant to when it is producing electricity. As a result of the incentives, however, a record-breaking 50 GW of new solar capacity came online in 2024, the largest single year of new capacity added to the grid by any energy technology in over two decades. Without harsh changes to incentives, the Solar Energy Industries Association (SEIA) expects total U.S. solar capacity to reach 739 GW by 2035,
SEIA sent a letter to all Senators, urging them to support the Ernst amendment. The letter states that restoring “commence construction” would “avoid major disruptions to the U.S. economy, including skyrocketing electricity prices and a looming energy shortage.”
Additional changes proposed by the Ernst amendment is the request clear guidance around the policy for foreign entity of concern (FEOC) guidance and elimination of the excise tax on solar projects. In its letter SEIA states that the excise tax is “an unprecedented and punitive measure that would raise costs for American consumers and stall the fastest-growing sectors of our energy industry. This tax is not a targeted trade remedy or supply chain strategy—it’s a blanket penalty on solar.”
Lisa Jacobson, President of the Business Council for Sustainable Energy supports the Ernst amendment, stating that “This amendment would provide a more workable transition for energy businesses while protecting energy sector jobs and projects currently in the pipeline.”
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