Senate Approves One Big Beautiful Bill Act with Tensions
Vice President JD Vance cast the tie-breaking vote as the U.S. Senate passed the One Big Beautiful Bill Act (OBBBA) with a close 51-50 margin on Tuesday. While this was a win for the Trump administration and congressional Republicans, the process was anything but smooth, with much of the drama revolving around the proposed phase-out of wind and solar subsidies from the 2022 Inflation Reduction Act (IRA).
The Senate Finance Committee’s draft of the OBBBA, unveiled on June 16, 2025, served as the initial framework for discussions. Unlike the House’s version, which mandated a strict 60-day deadline to start construction and a 2028 requirement to be operational, the Senate’s proposal initially allowed full incentives for projects starting construction before the end of 2025, with a gradual phase-out until the end of 2028.
However, over the weekend, the bill underwent revisions, tightening the requirements to mandate that projects be “placed in service” by the end of 2027. This alignment with the House’s stricter timeline could significantly restrict eligibility for projects not operational by that date, leading to challenges for developers with longer timelines.
Furthermore, a surprising new stipulation was introduced, imposing an excise tax on any project unable to prove it was free of Chinese components. Given China’s significant influence in the renewable energy sector, this would create practically insurmountable challenges.
A report from Reuters cited several developers and advocates in the wind and solar sectors, expressing concerns that these stricter provisions and the new tax could seriously harm an industry often seen as reliant on substantial government support. Elon Musk, the Tesla founder, voiced concerns on X, claiming the revised language “would be incredibly destructive to America!”
In response, Energy Secretary Chris Wright countered on his X account, stating, “The more we load our grid with intermittent generation, the worse the grid performs during times of maximum demand.”
An amendment proposed by Alaska Sen. Lisa Murkowski, along with Iowa Senators Chuck Grassley and Joni Ernst, aimed to allow many developers to qualify for incentives by extending the deadline. Instead of requiring projects to be “placed in service” by the end of 2027, it suggested reverting to the earlier requirement to “commence construction” by the end of 2028, which would enable developers to claim incentives even with minimal construction progress.
Whether this new amendment would restore the Senate’s original gradual phase-out of the subsidies remained uncertain, though it would eliminate the new tax requirement.
On Monday, Sen. Ernst informed reporters that the amendment wouldn’t have a standalone vote on the Senate floor, as Majority Leader John Thune was preparing to move the entire package forward for final voting. Shortly after, Politico reported that portions of the language might still be considered in a broader “wraparound amendment” on various topics.
The final compromise, as reported by Politico around 11:30 a.m. ET, wasn’t too surprising: It eliminated the new tax and included a modest adjustment allowing some planned wind and solar projects an additional year to start construction, while maintaining the hard deadline at the end of 2027 for them to be operational.
Even this softened approach, if included in the final OBBBA, could greatly hinder the future expansion of an industry that has largely relied on federal subsidies.
If, and it’s a significant “if” given the remaining steps toward passage, these energy provisions stay in the final OBBBA, traditional energy sources like gas, coal, and nuclear will need to step up to meet increasing energy demands. Those sectors claim they are prepared for this challenge and might soon have the opportunity to demonstrate their capabilities.
