Rollback of Green Energy Subsidies

Author: Austin Gae

TOPLINE:

The One Big Beautiful Bill (OBBB) rolled back about $500 billion in planned green energy subsidies over the next 10 years and helped put the American people and businesses back in control of their own energy choices.

BACKGROUND:

The Inflation Reduction Act (IRA), signed by President Biden in 2022, pushed a forced energy transition on Americans through expansive clean energy subsidies that would have cost an estimated $1 trillion or more over 10 years. Against this backdrop, OBBB represents a necessary course correction, reining in costly subsidies and allowing energy choices to be driven by businesses and consumers rather than Washington.

What OBBB Did:

• Terminated electric vehicle subsidies, saving about $190 billion.
• Restricted the advanced manufacturing production subsidy, saving about $50 billion.
  • Eliminated the subsidy for unreliable wind energy components after 2027.
• Terminated home energy subsidies, saving about $100 billion.
• Repealed the clean hydrogen subsidy after 2027, saving nearly $6 billion.
• Rescinded about $20 billion in IRA climate funding.
• Restricted wind and solar electricity subsidies, saving about $190 billion.
  • Ended wind and solar subsidies, except for projects placed in service before the end of 2027 or that start construction by July 2026.

Why It Matters?

• These changes reduce the 10-year (2025-2034) deficit by about $500 billion.
• Repealing subsidies prevents politicians from picking energy winners and losers, putting energy decisions back in the hands of American consumers and businesses.
• Green energy subsidies have a negligible impact on the climate—even a complete elimination of U.S. carbon emissions would reduce global temperatures by only 23°C by 2100.

Where Can I Find Changes?

OBBB Sec. 70501 – 70515, 26 U.S. Code § 25C–25E, 30D, 45L, 45V–45Y, 48E.

BOTTOMLINE:

Congress was right to repeal and restrict the green energy subsidies in the One Big Beautiful Bill, saving taxpayers from costly political favoritism in energy policy that would indirectly starve investment in cutting-edge industries.

This memo is part of the One Big Beautiful Booklet, a collection of more than 60 memos that examine and summarize the major aspects of the One Big Beautiful Bill – the signature legislative achievement of President Trump and the 119th Congress.