FULL NUCLEAR ENERGY TAX CREDITS UNTIL 2033 RETAINED IN SENATE'S VERSION OF THE RECONCILIATION BILL

The House passed its budget reconciliation megabill, H.R. 1, in May with steep cuts to the clean energy tax credits that had been enacted under Democrats’ signature climate law, the Inflation Reduction Act (IRA). Senate Republicans, however, pledged to moderate those cuts, particularly for the phase-out timelines for investment and production tax credits, as well as credit monetization restrictions and the strict requirements related to projects’ links to “foreign entities of concern,” such as China.

The Senate Finance Committee title released this week would modify the House bill to extend lifelines for sources like geothermal and nuclear power, but still contains quicker phase outs for wind and solar technologies than set out in the IRA.

Republican lawmakers are racing to get the reconciliation bill to President Donald Trump’s desk by the July 4 recess, putting Senate Republican leaders under pressure to quickly pass a bill that will pass muster with the House.

Overall IRA policies are softened, aiming for a smaller savings number from this package (closer to $400 billion than $500 billion). Energy storage and batteries are generally in a more favorable position.  Phase-downs for the overall wind and solar credits begin sooner than the House, but with significantly fewer limitations while in existence;

The Senate bill would extend technology-neutral production and investment tax credits for geothermal, hydropower and nuclear to projects that begin construction by 2033. Those technologies can fully access the IRA's credits if they begin construction by 2033 — with the value phasing down to its sunset in 2036.

Credit transferability is generally maintained (in contrast to its repeal in the House bill), except for transfers to specified foreign entities;

Solar and wind power, whose tax credits phase down more quickly for projects that begin construction this year before being fully eliminated by 2028 — the end of Trump's term. Solar and wind projects that commence construction in 2025 receive full credit, 2026 receive 60 percent of the IRA credit and projects that begin construction in 2027 receive 20 percent of the credit.