After months of political maneuvering, President Trump has signed a massive reconciliation package that guts the core of the Inflation Reduction Act (IRA) which we like to call the “Big Ugly Bill”.
Last week, before the Senate voted, we reported that this bill threatened climate work across the globe. The sweeping reconciliation bill aims to derail foundational clean energy incentives, threatens over one million jobs, and significantly increases energy costs for Americans.
On July 1, the Senate voted to pass the bill, with Vice President JD Vance casting the tie-breaking vote. Two days later, the House voted to pass the bill as well. On July 4, the President signed the bill into law.
We applaud House Minority Leader Jeffries for taking the floor for over 8 hours before the final House vote to emphasize just how much of a threat this bill is to the American people.
The new bill rolls back many of the country’s most impactful clean energy and climate policies.
While the legislation was introduced under the guise of tax reform, it effectively strips away historic environmental investments that had only just begun transforming America’s energy economy.
Here’s what it looks like:
IRA Funding Slashed
The Production Tax Credit (PTC) and Investment Tax Credit (ITC), both cornerstones of wind, solar, and battery storage development, will be cut by 40% for projects starting in 2026 and eliminated by 2028.
- Wind & solar projects that commence construction before the end of 2025 can claim the investment or production tax cuts under current law & have up to four years to complete construction.
- The Advanced Manufacturing Credit (45X) will End by 2028 and wind turbines and their parts will not receive the credit.
- Impacts from these tax cuts will make their way down to consumers who can expect to see higher electricity rates in the next coming years.
EV Tax Credit Eliminated
The bill delivers a major blow to the growing electric vehicle (EV) market by eliminating the $7,500 federal EV tax credit after September 30, 2025. The $4,000 credit for used EVs is also being repealed.
- According to Kelley Blue Book the price of a new EV is on average $9000 higher than a new gas powered car. The EV tax credit helped to bridge the price gap and make them more affordable.
- These incentives had been crucial in expanding EV adoption across income levels and helping auto manufacturers scale up domestic production. Without them, EVs will become more expensive and less accessible, further undermining U.S. efforts to electrify transportation.
Residential Clean Energy Credits Slashed
Also ending on December 31, 2025, are the popular residential energy efficiency tax credits for:
- Rooftop solar
- Home battery storage
- Heat pumps and high-efficiency HVAC
- Electric vehicle charging stations
- Energy-efficient windows, doors, and insulation
Under the IRA, these credits covered up to 30% of costs for clean energy home upgrades. Their termination will not only raise upfront costs for families but also slow the adoption of low-carbon, money-saving technologies in millions of homes.
Additionally, the “Big Ugly Bill” also defunds Electric School Bus programs that are helping clean up dirty diesel trucks and buses that drive through our communities. It even cuts funding to track this harmful air pollution.
These are only a few of the dangerous cuts included in this bill. These cuts will destroy thousands of good jobs that families and communities rely on.
We haven’t even scratched the surface when it comes to the ways this bill will harm public health, the environment, and the economy.
The Trump administration has shown that they want to dismantle the environmental policies that we worked for years to establish. Now is the time to accelerate state action.. We hope you join us in the fight for for common sense climate action on the state level.