The U.S. Senate has passed a sweeping budget bill that significantly revises tax incentives for clean energy, while offering a key exception for developers.

The legislation scales back clean energy tax credits introduced under the Inflation Reduction Act (IRA) but includes a carveout that allows wind and solar projects to remain eligible if they begin construction within 12 months of the bill’s signing. Originally, projects had to be fully placed in service by the end of 2027.

This adjustment provides a narrow window for renewable developers to initiate projects and still qualify for incentives, softening what many saw as a severe curtailment of clean energy support.

Harry Godfrey, federal policy lead at Advanced Energy United, said the amendment prevents the “most cataclysmic impacts,” though the industry still faces increased uncertainty.

Abigail Ross Hopper, CEO of the Solar Energy Industries Association, called the legislation a setback to U.S. energy leadership, while others warned the changes could chill private investment and delay grid expansion.

The bill now returns to the House, with Republican leaders aiming for it to reach President Donald Trump’s desk by the end of the week.

Source: utilitydive.com