The draft legislative text for inclusion in the One Big Beautiful Bill (OBBB), as released by the US Senate Finance Committee, doesn’t do much to allay the uncertainty that has gripped the country’s solar market ever since it was introduced by the US House Committee on Ways and Means in May 2025.
According to the Senate committee draft, 100% of the Investment Tax Credit (ITC) under Section 48E will be available to projects using domestically produced components if these enter construction by the end of 2025. It will reduce to 60% if construction starts by the end of 2026, 20% for facilities entering construction by the end of 2027, and coming to a close thereafter.
This changes from 100% credits available for projects that enter service by December 31, 2028 in the House-passed bill.
Residential solar ITC under 25D will be repealed within 180 days of the bill getting enshrined as a law. In the House-passed version, these were to end after December 31, 2025 (see US House Passes Bill Threatening Clean Energy Incentives).
“Domestic content thresholds for 48E would be changed to 45% from 6/16/25 through 12/31/25, 50% for 2026, and 55% for 2027 and beyond. If passed, this would fix the drafting error in the original IRA that kept the threshold at 40% for 48E,” according to analysts at ROTH.
On the other hand, tax credits for hydropower, nuclear and geothermal energy are extended to 2036, as per the legislative text of the draft released by the US Senate Finance Committee. It will be included in the OBBB.
US Senate Finance Committee Chairman Mike Crapo, a Republican, said, “The legislation also achieves significant savings by slashing Green New Deal spending and targeting waste, fraud and abuse in spending programs while preserving and protecting them for the most vulnerable.”
The US renewable energy industry continues to be cautious of the influence of the OBBB.
Solar Energy Industries Association (SEIA) President and CEO Abigail Ross Hopper argued, “As drafted by the Senate Finance Committee, this proposal would pull the plug on homegrown solar energy and decimate the American manufacturing renaissance. This bill makes it harder to do business in America for U.S. manufacturers and small businesses and will undoubtedly lead us to an energy-strained economy with higher electric bills over the next five years.”
Commenting on the Senate committee draft, American Clean Power Association (ACP) CEO Jason Grumet said, “While the Senate Finance Committee proposal eliminates poison pills from the House legislation, abrupt changes to the clean energy tax credits unnecessarily penalize companies that are making good faith investments under current law. The most immediate impact will be felt by consumers and companies facing increased energy bills.”
The American Council on Renewable Energy (ACORE) called it a premature rollback of solar and wind tax credits, which takes away the certainty and scope from the market at a time when investments need to go up to meet electricity demand.
“Without changes, this bill will increase energy prices for consumers, threaten thousands of good-paying jobs, and all but guarantees we forfeit the AI race to China. Congress has a narrow window to get this right,” said ACORE President and CEO Ray Long.
Meanwhile, the shares of US solar energy companies suffered the impact of this draft legislation from the Senate committee, including those of Enphase Energy, Sunrun and SolarEdge Technologies, and even First Solar, according to a Reuters report.
