Tim De Chant, senior climate reporter at TechCrunch, is always out on the beat, tracking the newest trends coming out of the renewables industry. He teaches fiction at MIT’s Graduate Program in Science Writing. On Monday night, Senate Republicans released their own version of a four-bill budget package. This release follows the House’s passage of a substantial infrastructure-focused reconciliation bill just four weeks ago. The new proposal focuses on tax credits to incentivize renewable energy projects. It creates a phased-in reduction formula that can have serious consequences for future investments.
The Senate bill now must be approved by the Senate parliamentarian before it proceeds to consideration in the House. It further provides a much-needed roadmap for tax credits related to renewable energy programs. Only projects that break ground before 2033 are eligible for the full TH reform tax credits. This would extend the incentive one year longer than what is currently provided in the Inflation Reduction Act (IRA). In fact, projects that start construction in 2026 would only get 60 percent of that credit. By comparison, those that begin in 2027 qualify for a mere 20%. After 2027, these tax credits are scheduled to evaporate completely.
This introduction of this proposed legislation provides a template for implementing gradual tax credit reductions. By 2034, the credit will drop to 75%, then to 50% in 2035, and full phaseout by 2036. The urgency to pass the entire package is further highlighted by the House’s self-imposed deadline of July 4.
With a masters in environmental science, De Chant has a solid foundation in environmental issues. He received his PhD in environmental science, policy, and management from the University of California at Berkeley, as well as a BA in environmental studies, English, and biology at St. Olaf College. He won the highly competitive Knight Science Journalism Fellowship at MIT in 2018. His presidential management fellowship gave him an opportunity to explore these climate technologies and adapt journalism’s business model.
Though negotiations on this massive budget bill persist, the stakes for renewable energy projects couldn’t be higher. The current proposal by Senate Republicans may reshape how investments are made in this sector and determine the future landscape of renewable energy development.