Sponsors
The bill simplifies the tax code and reduces federal tax expenditures by repealing a wide array of energy, vehicle, and efficiency tax credits—producing modest budgetary and compliance benefits—but at the cost of higher upfront costs for households and businesses, slower clean‑energy and EV deployment, job and supply‑chain losses, increased investment uncertainty, and setbacks for emissions and energy‑security goals.
Most taxpayers, tax preparers, and the IRS: the bill repeals many specialized energy and clean-technology tax credits, substantially simplifying the Internal Revenue Code and reducing filing and administrative complexity.
Federal budget/taxpayers: repealing numerous production and investment credits reduces future federal tax expenditures and modestly improves the deficit/outlook for federal revenues.
Fuel consumers and businesses that purchase motor fuels: repeal of the petroleum excise tax lowers the statutory tax on motor fuel starting Jan 1, 2026, which should reduce per-gallon costs for drivers and firms (subject to market pass-through).
Utilities, developers, and investors in clean energy: repealing production and investment credits across renewables, carbon capture (45Q), clean electricity investment, hydrogen, and related incentives will raise project costs and is likely to slow deployment of low‑carbon generation and technologies.
Households and vehicle purchasers: removal of new and used clean-vehicle credits, refueling/charging equipment credits, and other EV incentives increases upfront costs for new and used electric vehicles and for charging infrastructure, likely slowing EV adoption and raising total ownership costs.
Homeowners and residential clean-energy adopters: repealing residential and home‑efficiency credits (e.g., §25D, energy efficient home credits, heat-pump/solar incentives) increases out-of-pocket costs for rooftop solar, heat pumps, and efficiency upgrades, reducing adoption and potentially raising household energy bills.
Based on analysis of 24 sections of legislative text.
Introduced May 13, 2025 by Mike Lee · Last progress May 13, 2025
Repeals a broad set of federal tax credits and related code provisions for renewable energy, clean fuels, clean vehicles, energy efficiency, and related production and investment incentives. Most repeals and conforming edits take effect for property, production, fuel, or vehicles placed in service, sold, produced, or acquired after December 31, 2025 (with a few conforming changes noted as effective January 1, 2026). The changes remove dozens of specific tax credits (production and investment credits, residential and commercial efficiency incentives, vehicle and refueling credits, biofuel and sustainable aviation fuel incentives, and several specialized manufacturing and hydrogen credits) and adjust numerous cross-references across the Internal Revenue Code to reflect those repeals.