The Cost Of Trump's Tax Plan: Sapping Clean Energy And 790,000 Jobs
WASHINGTON, DC - MAY 03: Workers put solar panels down during an installation May 3, 2106 in ... More Washington, DC. The installation marked the one millionth in the U.S. in the past 40 years. It has been predicted that the U.S. will reach 2 million installations in two years. (Photo by)
While the U.S. House of Representatives has passed a Trump-endorsed tax bill that rolls back clean energy incentives, the Senate's refusal to support it as is offers a temporary reprieve. But buried in this legislation is a deeper threat to America's clean energy economy—one that could derail innovation, job growth, and climate progress across red and blue states alike.
The bill is causing a stir because it wants to keep the tax breaks from the 2017 bill that the president had during the administration's first term. But here's the catch: it's trying to undo all the progress made under the Biden Administration when the Inflation Reduction Act was passed. This proposed bill doesn't just abolish the incentives for the future; it also takes back the money that's already been set aside or approved for renewable energy projects. This is causing a lot of trouble in boardrooms and construction sites nationwide.
According to an E2 and Atlas Public Policy analysis released in May, over $14 billion in projects have already been delayed or canceled due to uncertainty since the law was passed in 2022. Additionally, the bill would reduce the investment tax credit provided to renewable energy projects. If a project costs $100, it would receive a $30 credit upfront to encourage the development of solar and wind farms.
'We have a product that competes with natural gas and coal, making them less profitable. So, reversing the IRA will make us grow less, but we will still be an ongoing company; it doesn't kill us. It restricts our growth at a moment when the grid needs these projects because of so much incremental demand from AI and digital computing. Renewables are here to stay. We compete on price. All we ask is an orderly wind down of the subsidies—not pulling the rug out from under it, because no industry appreciates that,' says Jorge Vargas, CEO of Aspen Power, in a virtual chat with me.
Consider Aspen's completion of 10 solar farms in Pennsylvania. With a combined capacity of 42.5 megawatts—enough to power 8,500 homes with electricity each year—these projects generate long-term rental income for local landowners and enhance regional infrastructure. They have also created over 800 local jobs, excluding those related to engineering and procurement firms. The Solar Energy Industries Association said the sector employed nearly 280,000 people nationwide in 2023, and in 2024, it generated $70 billion in private investment for the American economy.
Energy Innovation, a nonpartisan climate policy think tank, estimates that if Trump's tax bill goes into effect, the country could lose 790,000 clean energy jobs by 2030. For instance, in Texas, the repeal of the IRA is projected to lead to the loss of over 115,000 jobs by 2035, along with a $20.32 billion decrease in the state's GDP. 'Texas, California, Pennsylvania, Florida, and Georgia stand out as the biggest losers from IRA repeal due to their poor combination of lost jobs and increased household energy costs.'
The Credit Brings In Deals
OAKLAND, MARYLAND - AUGUST 22: In this aerial view, turbines that are part of Constellation ... More Energy's Criterion Wind Project stand in a row along the top of Backbone Mountain on August 22, 2022 in Oakland, Maryland. The 70-megawatt wind farm runs along eight miles of the mountain ridge and consists of 28 Clipper 2.5 MW Liberty Turbines, each one 415-feet tall. As of 2016, wind power accounted for only 1.4 percent of all in-state electricity generation in Maryland. Two large off-shore wind projects are currently in development. (Photo by)
The main target is Section 45X, the Advanced Manufacturing Production Credit. This credit has helped America bring solar, battery, and wind supply chains closer to home. It's attracted billions of dollars in investment for states like Georgia, Texas, and Ohio, often in Republican-led areas. Trump's bill would eliminate these credits, freezing hiring and stopping factory construction in the middle of projects.
Electric vehicles are also in the crosshairs. The bill would ditch the credits for them, although these breaks would be available for U.S.-made cars. However, policy experts warn that many parts inside the vehicles are foreign-made. Given the global supply chain, it is nearly impossible for a car to be wholly produced in this country.
Meanwhile, the tax bill would also nix the federal tax incentive under Section 30C, which encourages the installation of electric vehicle charging infrastructure. The credit reduces the cost by 30% and is now available through 2032.
'Prematurely eliminating 30C will take options away from drivers, especially in rural and underserved communities where fueling choices are already scarce,' says Jamie Hall, Director of Policy for EV Realty, in an email. 'This abrupt policy shift will slow EV adoption, increase pollution levels, and threaten construction, engineering, and electrical jobs across the country by pulling the rug out from under projects already under development.'
Then, there's the potential elimination of the 30% investment tax credit for solar installations. 'We need a stable regulatory framework,' says Aspen Power's Vargas. 'Don't take a wrecking ball to it; instead, use a scalpel.'
NextEra Energy, First Solar, and Sunrun are among the clean energy and solar companies that could be impacted. At the same time, IRA incentives for battery manufacturing and domestic sourcing have bolstered Tesla's margins and U.S. production scale, all of which would disappear if this bill passes.
The Impact On Energy Markets?
CARTERET NEW JERSEY, NJ - NOVEMBER 17: Vehicles move along the The New Jersey Turnpike Way while a ... More Factory emits smoke on November 17, 2017 in Carteret, New Jersey. The United States is still contributing to the global greenhouse gas emissions as the Trump Administration has dismantled the U.S. foreign-policy to reduce carbon pollution. Political divisions in the United States over climate change have spilled over to the outside world as seen at the COP23 United Nations Climate Change Conference that ends today in Bonn, Germany. (Photo by Kena Betancur/VIEWpress/Corbis via Getty Images)
Trump defends the legislation as a way to cut federal spending and return to 'free market principles.' He reasons that the energy market should thrive by rolling back clean energy incentives. But here's the catch: the fossil fuel industry still gets many subsidies, while the more nimble clean energy sector, which is growing faster and creating more jobs, would be left to fend for itself.
Fossil fuels benefit from substantial direct and indirect subsidies. Oil Change International calculates that the United States spends about $20.5 billion annually on fossil fuel subsidies. Meanwhile, the U.S. Energy Information Administration reported that federal subsidies for renewable energy totaled $15.6 billion in 2022.
CEO Vargas says the biggest irony is that the landowners who hosted his solar projects voted for Trump in 2020. They are now some of the leading green energy advocates; solar farms provide the revenue they need to keep farming and the power to energize their complexes. Although Trump may have convinced Red districts of a 'Green New 'Scam,'' many now champion the cause because they profit.
"Leasing our land for solar has brought financial stability to our fourth-generation family farm," says Judy King, a Mercer County, Pa., property owner, in an email. 'It provides a reliable yearly source of income that helps us plan for the long term—covering expenses, making improvements, and ensuring the land remains productive and intact for future generations. We didn't have strong opinions about renewable energy before this project." But they learned about solar and voted to proceed, which they say also serves the environment and the community.
The economic benefits are one aspect. The environmental advantages are another. The Rhodium Group estimates the U.S. will produce 500-730 million metric tons of additional greenhouse gases by 2035 if Congress repeals parts of the IRA.
Even if this tax bill is revised, it sends a troubling message: policy commitments to a cleaner, more competitive energy economy can be reversed overnight. Investors need certainty, innovation requires stability, and U.S. policy in the next-generation energy economy must incorporate both. The practical effect of such sudden strategic changes is that they will impede the transition to green power, making energy more costly and much dirtier.
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With luck a shipment made by afternoon got delivered by the next noon. Operations started in April 1973. Forbes named Fred Smith one of America's 100 greatest living business minds in 2017. Martin Schoeller for Forbes In the beginning the losses were horrendous; in Federal's first 26 months they mounted to $29 million. The investors were getting antsy. Federal was falling far short of Smith's projections. There was talk of kicking him out. Smith's own sisters were suing him for misinvesting the family fortune. But Arthur Bass, Federal's operating man, stood by Smith. Bass, 44, a pilot and airline consultant, gradually improved the delivery schedules, and Federal began to come out of its tailspin. By last fiscal year, Federal's revenues hit $75 million, and the company was $3.6 million in the black. Seldom in history had a company gone from nothing to that size so swiftly. In this fiscal year, ending May 31, Federal should make $8 million on $110 million revenues. Federal now counts 31,000 regular customers. The biggest is the U.S. Air Force, which uses Federal to ship the spare parts needed to keep its planes flying. Another major customer: International Business Machines Corp. Others include shippers of film, blood, organ transplants and drugs. On heavily traveled passenger routes, such as New York to Chicago, Federal has plenty of competition from the major airlines. But it has virtually none in moving packages from smaller cities — from El Paso, Tex. to Rochester, N.Y., for example; or Jacksonville, Fla. to Cedar Rapids. Emery Air Freight, which ships via regular airlines, has been meeting some of Federal's competition by chartering its own planes in areas where airlines like Delta and Eastern have cut back less-traveled routes or night service, both crucial to air freight. But Emery cannot match Federal's nationwide air-delivery service. As a freight forwarder Emery is not permitted to operate its own planes and cannot reach the Cedar Rapids of America as quickly as Federal. To meet the competition, Federal has evolved a two-tier pricing system. On routes where there is serious competition, Federal tries to undercut Emery by as much as 10%. It recoups on exclusive routes by charging higher rates — arguing that higher-priced service is better than poor service for these towns. Are Smith's troubles over? Alas, no. At the moment, Federal is up against a serious ceiling on its capacity. The small Falcons can't always handle the available business on some routes, and, as a result, some packages must be held over. As a consequence, Federal's on-time delivery record has slipped from 96% to about 90%; now some couriers not only deliver packages but wait to see they get on the plane. The solution: bigger aircraft. One day soon Federal will file with the CAB a request for permission to fly bigger planes, such as Boeing 727s, and extend service from the present 75 airports and 130 cities to 170 airports and 300 cities — virtually the entire country. On the busier routes, 727s would take over; a single one could replace five Falcons flying nightly wingtip to wingtip on the Los Angeles-Memphis route, for example. On the lighter routes, Federal would still use its Falcons. The savings from using bigger planes alone would increase profits by $9 million a year. This will be Federal's second effort to obtain the right to use bigger craft. Last year the Senate passed a Smith-inspired bill that would permit Federal Express to rapidly institute larger all-cargo flights. The bill died in the House; it was bottled up in a subcommittee headed by Representative Glenn Anderson from Southern California, where opponent Flying Tiger Line is headquartered. This was a severe setback for Smith. In addition to the problem with the CAB, Federal's balance sheet is in terrible shape. The big losses have cut equity capital to just $7.8 million, vs. $52.5 million debt. However, if CAB authorization is forthcoming, Federal's backers have expressed a willingness to help recapitalize the company. There are, moreover, plenty of second-hand Boeings around, and Federal could quickly assemble a fleet of big jets. If it gets to that stage, the next step would be to take Federal public, not only to raise additional capital but to provide Federal's long-suffering backers with an opportunity to get some of their money out. Venture capitalists are not infinitely patient. Maybe Federal will get the right to fly 727s. Maybe it won't. But it has come a long way already. As President Art Bass puts it: "The absolute worst that can happen to us now is that we will be a limited success. It is no longer possible, as it was a year ago, that we'll go down the tube." Will Federal go on to become a $1-billion company? Will Fred Smith once again win a victory of mind over matter, of will over "reality"? Tune in next time for the answer.
