Memo: A GOP Phase-Out Repeal of Clean Energy Tax Credits Would Devastate American Manufacturing And Raise Energy Prices

Washington, D.C. — In March, House Budget Chairman Jodey Arrington (R-TX19), a longtime advocate for repealing all of America’s clean energy investments, gave away the game for how other Republican repeal advocates would gut those investments while seeking cover from the overwhelming public support for those investments.

As E&E News reported, “Republicans mull ‘thoughtful’ phaseout of green credits,” quoting Arrington as saying, “I’d like to repeal every jot and tittle of the IRA tax credit expansion, but I think there’s a thoughtful way to transition from those.”

Now we know that Ways and Means Chairman Jason Smith (R-MO8) – another longtime advocate of full repeal – is adopting Arrington’s phase-out repeal sleight of hand, with Politico reporting, “House Republicans look to sunset clean energy credits.”

But as a new detailed memo from Climate Power explains, while an early phase-out repeal of clean energy investments may be intended to sound more “thoughtful” or “targeted,” the truth is the opposite: “that would be a disaster for families and businesses — raising energy costs, killing jobs, and stifling American innovation.” As the memo explains, sunsetting clean energy tax incentives prematurely for business plans built around 10-year certainty would mean some factories that are already being built will never see the incentives they planned for, and sorely needed electricity generation projects may never be finished or built at all. Further, the destruction of interlocking supply and demand incentives would also lead to far-reaching implications — including higher energy costs and fewer good-paying jobs — well beyond the obvious impact from the number of years slashed off.

Key Impacts of a Phase-Out Repeal:

• Jeopardize at least 157 gigawatts in clean energy projects that plan to come online in 2026 or later. These projects are expected to produce enough electricity to power more than 15 million homes.
• Raise electricity prices by more than $110 per year for American households starting next year. Undermining these key energy supplies, just as demand is skyrocketing from AI and crypto, would lead to dramatically higher energy costs for Americans across the country.
• Disproportionately stall or curtail investment in industries that Republicans purportedly support, such as nuclear, geothermal, and manufacturing broadly. 
• Kill or threaten manufacturing jobs — on top of the 62,000 clean energy jobs already lost or stalled since Trump’s election — by pulling the rug out from under manufacturing companies making long-term investment decisions and by reducing demand for clean energy products.

Read the full memo here.