Senate Proposal Accelerates Wind and Solar Tax Credit Phase-Out, Adds New Green Energy Levy

The Senate’s version of the “One Big Beautiful Bill” is turning up the heat on renewable energy. In a move with wide-ranging implications for tax planning, investment strategy, and energy policy, Senate Republicans are proposing to accelerate the phase-out of longstanding tax credits for wind and solar projects, while also introducing a new levy on renewable installations that use Chinese-made components starting in late 2027.

What’s Changing?

aster Phase-Out of Production Tax Credit (PTC) and Investment Tax Credit (ITC)

Under current law, wind and solar developers can claim:

• PTC (Production Tax Credit) for wind projects, gradually phasing down after 2026

• ITC (Investment Tax Credit) for solar and other clean energy systems, set at 30% through 2032 before step-down

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The Senate proposal would:

• Accelerate the phase-out of both credits starting as early as 2026

• Completely eliminate them by 2028, instead of the scheduled reduction into the 2030s

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This reflects GOP goals to reorient tax incentives toward traditional energy sectors such as oil, natural gas, and nuclear.

New Levy on Chinese-Made Components

The proposal also includes a new tax on renewable energy installations that incorporate Chinese-manufactured parts, such as:

• Solar panels and inverters

• Wind turbine blades, towers, and nacelles

  
  

This levy would take effect after December 31, 2027, aligning with broader Republican efforts to:

• Reduce U.S. reliance on Chinese supply chains

• Incentivize domestic manufacturing of clean energy components

• Level the playing field for American energy firms amid ongoing trade disputes

  
  

Industry Reaction

The proposal has sparked swift backlash from clean energy advocates, developers, and investors. Elon Musk and other solar executives have publicly criticized the move, arguing it will:

• Raise project costs by eliminating core tax incentives before the market fully scales

• Slow the transition to carbon-neutral infrastructure

• Increase energy prices for households and businesses reliant on green installations for power cost reduction

  
  

Conversely, fossil fuel advocates and GOP senators argue the shift redirects tax benefits to more reliable baseload sources and supports American manufacturing competitiveness.

What This Means for Tax Professionals and Advisors

If enacted, these changes would:

• Compress tax credit planning timelines for clients in solar, wind, and infrastructure funds

• Increase after-tax project costs, affecting ROI analyses and financing structures

• Require reassessment of Section 48 ITC eligibility strategies and Section 45 PTC qualification timelines

• Create new compliance requirements for supply chain sourcing to avoid Chinese-component levies

  
  

In short, the proposal could reshape renewable energy tax planning for years to come.

How Bizora AI Helps Your Firm Stay Ahead

Bizora AI monitors every change to energy tax credits in real time. Tax professionals and infrastructure finance teams use Bizora to:

• Model PTC and ITC scenarios under new legislative timelines

• Generate memos outlining phase-out impacts by technology and asset class

• Review Chinese-manufacturing exposure for clients’ energy portfolios

  
  

Want to evaluate how this proposal affects your renewable energy clients or project pipeline?→ Ask Bizora AI and get structured answers in seconds.