The Senate version of the "Big Beautiful Bill" took a surprising turn: Instead of allowing wind and solar subsidies to continue forever, the bill kills the subsidies and imposes a new tax on them!

President Trump will no doubt be twisting arms in the Senate all night.

For those of you following the Big Beautiful Bill (BBB) as it winds its way through Congress, here is a surprising update: the latest Senate draft released last night, June 27, dropped the provision that allows wind and solar subsidies to last forever and added a new tax on them.

Last evening, I reposted Alex Epstein’s impassioned and well-thought-out plea to the Senate to end the Inflation Reduction Act’s subsidies for wind and solar by 2028. Alex is arguing in favor of a provision that would provide IRA subsidies only to wind and solar facilities that are put into service by 2028. The previous Senate version of the BBB allowed the IRA subsidies to last forever, essentially. Rumors were that the wind and solar lobby had convinced Senators that cancelling the IRA subsidies for wind and solar was bad for America’s power grids. But SURPRISE! The latest draft of the Senate bill not only halts wind and solar subsidies immediately, but it also imposes a new tax on them.

Late this morning, Saturday, June 28, a supporter of wind and solar subsidies, Jesse D. Jenkins, posted on X:

Stunningly, the new Senate budget bill contains a NEW tax on wind & solar power projects. Avoiding the tax depends on positive demonstration that projects dont violate material assistance rules that is next to impossible to demonstrate. Based on my calcs, could raise taxes on wind & solar projects by up to: ~11% for utility scale solar ~8% for residential solar ~18% for on and offshore wind projects That comes on top of ending a 30-50% tax cut for wind and solar projects. So this bill could RAISE TAXES on the most important new sources of electricity supply in the USA by at least roughly 40-70%!! That is utter insanity!

As you might expect, a torrent of posts from supporters and foes of wind and solar was unleashed. You can follow the thread on X starting here.

Instead of extending the IRA’s wind and solar subsidies, the Senate’s latest draft of the Big Beautiful Bill not only removes the subsidies, it imposes a tax on wind and solar projects in Chapter 50B of the draft bill, starting on page 558, called “Material Assistance from Prohibited Foreign Entities.” This section targets projects that utilize components, specifically rare earth minerals, from “Foreign Entities of Concern” (FEOCs)—countries or companies deemed problematic, primarily China, which has a near monopoly on rare earth minerals.

The latest version of the Senate bill imposes a tax on wind and solar projects that do not begin construction before the end of 2025 or are not in service by 2027, unless they can demonstrate that they are free of FEOC materials. It is a tough rule for wind and solar to avoid, since global supply chains for wind and solar components rely almost entirely on Chinese rare earth minerals. While the goal appears to be reducing reliance on Chinese rare earth minerals, it effectively imposes a de facto tax on wind and solar projects in the U.S. Meanwhile, the bill keeps or extends incentives for nuclear, geothermal, and hydropower, consistent with President Trump’s priorities.

As expected, this version of the BBB has stirred up a storm, with some folks on X calling it a betrayal of energy independence. While these provisions might prompt some Senators to vote against the bill, there are already the usual RINO suspects, such as Tillison, Murkowski, and Collins, who have stated they will not support the bill in its current form, regardless of the tax on wind and solar.

No doubt, the Senate is ordering coffee by the 42-gallon barrel this weekend in their effort to get this bill to President Trump by July 4.

Stay tuned!

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