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⚖️ Clean energy tax credit landscape rewritten by Republicans

Senate GOP Bill Slashes Key Clean Energy Incentives

One month after the House passed its reconciliation package, Senate Republicans have introduced their version of the bill — one that significantly reshapes the clean energy tax credit landscape created under the Inflation Reduction Act (IRA). The proposal deals a major blow to residential solar, hydrogen, and utility-scale wind and solar, while extending support for nuclear, geothermal, hydropower, and long-duration energy storage. Most notably, the bill ends residential solar tax credits within 180 days of signing and phases out commercial solar and wind credits by 2027. Hydrogen credits would be eliminated by the end of this year. Meanwhile, carbon capture incentives are preserved but simplified, removing current distinctions based on how the carbon is used.

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Political Priorities Are Redrawing the Energy Map

The bill reflects a clear political calculus: Senate Republicans aim to stifle growth in sectors long associated with Democratic climate policy — particularly solar and wind — while elevating energy sources more traditionally aligned with conservative support, such as nuclear and hydropower. The inclusion of long-duration energy storage as a protected class is a surprising twist and could be a nod to the practical need for grid stability, even as intermittent renewables lose some federal support. The restructuring of 45Q carbon capture credits also signals bipartisan recognition that carbon management will remain critical, even if the methods of deployment vary ideologically.

Founders in Clean Energy Should Prepare for Policy Volatility

For cleantech startups, this moment reinforces an enduring truth: policy risk is business risk. If your startup is in solar or hydrogen, you should prepare for uncertainty around customer demand, project timelines, and financing assumptions tied to tax credits. Explore ways to derisk your model by diversifying funding sources, building partnerships in more stable state-level programs, or leaning into technologies that offer cross-sector resilience (like storage or grid tech). And if you’re working in geothermal, nuclear, or carbon capture, this bill — if passed — could strengthen your positioning. Either way, founders should stay closely tuned to how the reconciliation process unfolds before the July 4 deadline. The final version could significantly impact go-to-market timing and long-term strategy.

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