Geothermal and nuclear could lose big under GOP tax proposal

Yahoo

16-05-2025

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The House Ways and Means budget proposal would gut the Inflation Reduction Act and slow the rollout of solar, wind, and storage. It'd crimp EV adoption and crush clean-energy manufacturing. Energy costs and carbon emissions would rise. Green hydrogen would remain forever a whisper in the wind, even after so much screaming about the arcane rules governing its incentives.
But it'd also derail two Republican hobbyhorses: nuclear power and advanced geothermal.
The proposal introduced Monday is 'a backdoor repeal' of the Inflation Reduction Act, Ted Lee, a former Biden administration Treasury official, told Canary Media's Jeff St. John.
Onerous 'foreign entity of concern' requirements would likely render an important incentive available to all carbon-free energy sources useless for any project not already underway, including nuclear and geothermal installations. Lee described it as 'death by red tape.'
That could be painful for advanced geothermal projects, which are few in number but crucial to developing an industry whose promise of 24/7 carbon-free energy has captivated Republicans, Democrats, and even Big Tech firms. Tax credits help make these early-stage projects financially feasible — and repealing them could cause developers to 'struggle to secure financing and price output competitively,' per a March Rhodium Group report.
The proposal would also end the 45U nuclear power tax credit three years early, in 2031, meaning it could disappear before any planned nuclear power plant can even use it. A tax expert told Latitude Media that nuclear would be 'by far the most disadvantaged' if the bill became law.
Republicans in the Senate and House have already criticized the tax-credit cuts as too far-reaching and have called for changes, including to the foreign-entity requirements. A geothermal trade group told Axios several Republican offices are open to creating carve-outs for the energy source; at least one GOP lawmaker is pushing to preserve 45U.
'There's going to be lots of changes,' Ways and Means Vice Chair Vern Buchanan, a Florida Republican who supports IRA tax credits, told a Politico reporter. 'It's not over.'
Other recent moves by Republicans and the Trump administration could create additional headwinds for nuclear. That includes the ongoing effort to dissolve the Department of Energy Loan Programs Office, which has backed the only U.S. nuclear reactors to come online this century as well as a more recent effort to revive a shuttered Michigan nuclear plant.
All of this is difficult to square with Trump's broad proclamations that he will unleash American energy dominance. It's even harder to reconcile with Energy Secretary Chris Wright's specific call for a 'nuclear renaissance' and explicit support for geothermal.
But then, the prevailing principle of this Trump administration has not been tidy logic. Instead, it appears to be volatility and chaos — and this proposal from Congress certainly furthers that tradition.
The steady rise of electric vehicles
While Tesla sees its sales shrink and cedes its status as the world's biggest EV-maker to China's BYD, the global EV market as a whole is growing apace. This year, more than one-quarter of vehicles sold worldwide will be full EVs or plug-in hybrids, which have big, chargeable batteries, per a new International Energy Agency report.
China is by far the biggest EV market in the world. Over 11 million EVs and plug-ins were sold there last year — more than were sold worldwide in 2022. Almost half of all cars sold in the country were electric in 2024. Europe is the next-biggest market, though sales are stagnating in the region. Stateside, the IEA expects modest growth, but that outlook is clouded by the propensity of the Trump administration and Republicans to introduce extreme new measures that could tank EV sales.
Maine keeps innovating on heat pumps
The persistent myth that heat pumps don't work in the cold has met its match: Maine. In 2023, the very cold state not only reached its heat-pump installation goal ahead of time — it doubled down on more heat-pump adoption.
Now, Canary Media's Sarah Shemkus reports that the clean-heat technology is central to the state's plan to lower electricity bills for its residents — even those who aren't planning to get a heat pump themselves. The idea is to install as many heat pumps as possible in order to save households money on heating costs and also suppress statewide power rates, which could lead to an estimated $490 million in savings on electricity rates alone over the long term.
Trade war relief… for now: China and the U.S. agree to significantly reduce tariffs on one another for 90 days, easing a tense trade war that has already driven up costs for domestic manufacturers of batteries, solar panels, EVs, and other cleantech and which has cast deep uncertainty over the entire economy. (CNBC)
Batteries still face a tough road: Domestic battery manufacturing and deployments have been growing fast — but Trump's trade wars and uncertainty around clean-energy tax credits threaten to derail progress. (Canary Media)
Fighting for IRA: A dozen House Republicans come out against this week's budget proposal that would effectively repeal the Inflation Reduction Act, pushing for revisions to its 'foreign entity of concern' and eligibility provisions as well as the preservation of tax-credit transferability. (E&E News)
Here comes the sun: The solar industry prepares a lobbying blitz following the House GOP budget proposal that would gut clean energy incentives, the sector's latest attempt to preserve the tax credits that have helped solar installations grow rapidly. (Latitude Media)
What emergency? 15 states sue the Trump administration over its executive order declaring an ​'energy emergency,' arguing that no such crisis exists and that the declaration is encouraging federal agencies to unlawfully skip over proper environmental protections. (New York Times)
Empire Wind wobbles: Equinor says it will abandon its Empire Wind offshore wind project off the coast of New York if the Trump administration doesn't lift its stop-work order. (E&E News)
Finding the words: At a recent offshore wind industry conference, speakers had lots of advice on how to make the case for President Trump's least favorite form of energy to Republicans. (Canary Media)
The right direction: A new analysis finds that despite China's growing power demand, the nation's emissions have declined by 1% over the last 12 months compared with the year prior, the result of surging clean energy construction. (Carbon Brief)