Overview
Title
To amend the Internal Revenue Code of 1986 to phase-out the clean electricity production and investment credits with respect to wind and solar energy.
ELI5 AI
H.R. 2838 wants to slowly stop special money help that was given to people who make electricity from the wind and sun. This means that over a few years, they would get less and less money until all the help goes away.
Summary AI
H.R. 2838, known as the “Ending Intermittent Energy Subsidies Act of 2025,” proposes changes to the Internal Revenue Code of 1986 to phase out certain tax credits for wind and solar energy. The bill aims to gradually reduce the transferable clean electricity credits and investment credits for facilities producing or investing in wind and solar energy over a four-year period. Specifically, the credits would decrease by 20% each year, ultimately leading to a complete phase-out after four years. The changes would apply to electricity production and property placed in service after the enactment of the bill.
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AnalysisAI
In the 119th Congress, the proposed bill, known formally as the "Ending Intermittent Energy Subsidies Act of 2025," seeks significant amendments to the Internal Revenue Code of 1986. This legislation aims to gradually phase out clean electricity production and investment credits related specifically to wind and solar energy. The bill outlines a structured plan to reduce, and eventually eliminate, these credits over a four-year period following its enactment.
General Summary of the Bill
The bill's primary objective is to phase out financial incentives that have historically supported the deployment of wind and solar energy technologies. Specifically, it targets the termination of the transferability of portions of these credits related to wind and solar energy generation. Additionally, it sets a schedule for reducing production and investment credits, starting with an 80% reduction in the first year and decreasing to 0% by the fifth year. This phase-out affects new projects that commence after the act becomes law and is intended to end financial assistance for these forms of renewable energy production and investment.
Significant Issues
One of the major concerns surrounding this bill is its potential to deter investment in wind and solar energy sectors at a time when the transition to renewable energy is crucial for environmental sustainability. The absence of alternative incentives after the phase-out may result in a significant setback for investments in these clean energy technologies, undermining efforts toward reducing carbon emissions.
The bill also creates uncertainty by linking the effective dates of its amendments to another legislative act without providing clear timelines. This dependency could complicate financial planning and create confusion among stakeholders who are trying to adapt to the new policy framework.
Furthermore, the lack of transitional provisions or clear guidance for ongoing projects that currently rely on these credits could lead to abrupt financial adjustments. This may particularly impact businesses and sectors heavily invested in wind and solar energy, resulting in economic imbalances.
Impact on the Public
From a broader public perspective, the bill's implications could be far-reaching. If the phasing out of these credits leads to reduced investments in wind and solar technologies, it may slow down the nation's progress toward clean energy goals. Such a shift could influence energy costs and availability, potentially inhibiting efforts to mitigate climate change effects.
Impact on Specific Stakeholders
Specific stakeholders, especially those within the renewable energy industry, might face substantial challenges. Companies that have invested heavily in wind and solar projects could experience financial instability due to anticipated decreased returns on investment. They might also need to reevaluate their long-term strategies in light of reduced governmental support.
Conversely, stakeholders in other energy sectors, such as fossil fuels or nuclear, might experience relative advantages as the financial playing field shifts. These sectors could see an influx of investment and policy focus as a result of the reduced incentives for wind and solar energy.
In conclusion, while the proposed bill presents a clear framework for phasing out wind and solar energy subsidies, it also raises numerous concerns regarding its potential impact on clean energy investments and the broader transition to sustainable energy solutions. The balance between deterring specific energy incentives and supporting overall environmental goals will likely remain a topic of extensive debate.
Issues
The phase-out of clean electricity production and investment credits specifically targeting wind and solar energy could discourage investments in these critical renewable energy sectors. This is particularly relevant as the transition to clean energy is a significant public and governmental priority. The lack of alternative incentives after the phase-out could have a considerable negative impact on the renewable energy sector. (Sections 3, 4)
The lack of a clear rationale or justification for terminating the transferability of clean electricity credits for wind and solar energy may raise concerns about the motives behind this decision. This can lead to questions about whether the bill seeks to favor other forms of energy, which might not align with public or environmental goals. (Section 2)
The effective date of amendments is linked to the passage of another act, "Ending Intermittent Energy Subsidies Act of 2025," which creates uncertainty for stakeholders in the renewable energy sector. This lack of clarity could complicate planning and tax management for businesses involved in these industries. (Sections 3, 4)
The phased reduction schedule for credits could impact long-term investments and financial planning in solar and wind energy sectors, leading to potential economic imbalance. Investors require stability and certainty for long-term projects, and sudden policy shifts could deter future investment in clean energy. (Sections 3, 4)
The bill lacks any transitional provisions for businesses currently benefiting from these credits, possibly leading to abrupt financial adjustments and challenges for ongoing projects. This lack of transitional guidance can be a source of financial and operational uncertainty for those affected. (Sections 3, 4)
There is unclear language around which investments and facilities qualify as "qualified investment in a qualified facility," leading to potential ambiguity and legal challenges in interpreting eligibility for remaining credits. (Section 4)
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill states that it can be officially referred to as the “Ending Intermittent Energy Subsidies Act of 2025.”
2. Termination of transferability of portion of clean electricity credits attributable to wind or solar energy Read Opens in new tab
Summary AI
The section describes changes to the Internal Revenue Code that stop certain clean electricity credits from being used for power generated by wind or solar energy. The amendments specify that these credits cannot be transferred if they are linked to electricity made from wind or solar.
3. Phase-out of clean electricity production credit with respect to solar and wind power Read Opens in new tab
Summary AI
The section outlines a reduction plan for the clean electricity production credit for solar and wind power. Starting from the year after the enactment of the Ending Intermittent Energy Subsidies Act of 2025, the credits decrease annually—80% in the first year, 60% in the second, 40% in the third, 20% in the fourth, and completely eliminated thereafter.
4. Phase-out of clean electricity investment credit Read Opens in new tab
Summary AI
The section outlines a gradual reduction of the clean electricity investment credit for facilities using solar and wind energy over four years following the enactment of the Ending Intermittent Energy Subsidies Act of 2025, starting at 80% in the first year and decreasing to 0% by the fifth year. This change applies only to new facilities that begin service after the Act becomes law.