The budget reconciliation process enables Congress to quickly consider and advance fiscal legislation, with topics spanning the country’s revenues, spending, federal debt limit, as well as a budgetary surplus or deficit. Throughout this process, the clean energy tax credits, which have created jobs, spurred local investment, bolstered the grid’s reliability, and contributed to lower electricity prices for Americans, were front and center in the committee meetings, where legislators placed them on the metaphorical chopping block.
In the early hours of the morning on Wednesday, May 21, the U.S. House narrowly pushed through the reconciliation bill with a 215-214 vote, where unfortunately, the House has taken a sledgehammer to these vital energy incentives. Citizens for Responsible Energy Solutions (CRES) President Heather Reams reacted in a statement, “While we are disappointed that energy tax credits were repealed and substantially cut in the package passed by the House, we are grateful for the champions who have fought to protect critical provisions that incentivize investment and economic growth. As the bill progresses to the Senate, we hope changes will be made to address and protect these important tax credits, which are working to secure American energy dominance. Without these provisions, the United States is at risk of falling behind adversarial nations in the global energy race—not to mention, American jobs and local economies will suffer a tremendous loss.”
Under the House version, clean energy projects would need to start construction within 60 days of the bill’s passage, have completely China-free supply chains by January 1, and start operating by 2029 to benefit from the Section 45Y production credit or the Section 48E investment credit, both of which would start being phased out in 2029, thereby creating a nearly impossible-to-meet timeline. Other tax credits, such as those used to bolster residential energy efficiency or purchase clean vehicles, would be eliminated outright after this year. If passed by the Senate and signed by the President, the legislation threatens to unwind an incredible amount of investment and energy development across the country, particularly in Iowa.
Domestic clean energy investment is at risk and must be protected to help create a stronger national economy with direct benefits for local communities. A report commissioned by the American Clean Power Association (ACP) and conducted by ICF at the end of 2024 found that between 2025 and 2035, there would be $3.8 trillion in net spending across the American economy due to the tax credits, with a more than fourfold return on taxpayer investment. The energy incentives would ultimately grow the American economy by contributing $1.9 trillion to the national GDP. In Iowa alone, the tax credits would lead to $71 billion in spending and grow the state’s economy by $34 billion.
Since 2022, these tax credits have already spurred $321 billion in investment across the country in clean energy projects and the construction of new industrial and manufacturing facilities, 2,369 of which have since opened their doors for business. The Clean Investment Monitor’s May 2025 report adds that $522 billion in investment remains to be spent on construction and installation at such factories, with 2,217 more plants yet to be built that will support even more American jobs.
Unfortunately, Energy Innovation’s May 2025 report estimated that the House reconciliation bill will cut many of these 7,000 existing and planned projects. The uncertainty regarding federal support for clean energy between January and March of this year has already cost $6.9 billion due to project cancellations, and a significant portion of the planned $522 billion in investment may never come to fruition. The organization calculates that during the reconciliation window from 2026 to 2034, eliminating these incentives will cause the cumulative national GDP to decrease by almost $1.1 trillion. The report also says the bill will cost the country more than 830,000 jobs in 2030 and nearly 720,000 jobs in 2035.
Photo Courtesy Nordex USA, Inc.
On the other hand, the country would experience a renaissance in energy and manufacturing jobs if the clean energy tax credits are maintained. ACP and ICF report that over the next decade, these incentives are expected to create a total of 13.7 million jobs, or approximately 1.2 million jobs per year on average, ranging from over 600,000 in 2025 to nearly 1.5 million in 2032. About 22,900 total jobs per year would be created in Iowa alone.
According to data from the Clean Economy Tracker, clean energy manufacturing companies setting up shop in Iowa have committed to or have already created more than 1,200 jobs, more than half of which were announced since the passage of the clean energy incentives in 2022. That year, Siemens Gamesa announced that it would restart production at its shuttered wind turbine manufacturing plant in Fort Madison, rehiring over 250 employees whom it had previously laid off. In 2023, Alliant Energy’s REGEN Fiber announced that it would invest over $10 million to build a wind turbine blade recycling plant in Fairfax, which held its grand opening last June and now employs eight Iowans. Last July, the Nordex Group announced that it was reopening its wind turbine nacelle production facility in West Branch, which it had closed in 2013, bringing back 100 jobs to the city. Likewise, TPI Composites recently announced plans to spend $3.2 million to reopen its Newton factory, which it had closed in 2021, to build wind turbine blades for GE Vernova and bring back 320 jobs to Jasper County.
Construction and operations roles at energy generation facilities are also threatened, as is the property tax revenue they would contribute to local communities. MidAmerican Energy has invested $15.8 billion in solar and wind projects in Iowa. Last year alone, the company paid $44.9 million in easement or lease payments to landowners and $54.4 million in property taxes for its 7,700 MW of wind projects, consisting of more than 3,400 turbines. NextEra Energy, meanwhile, has invested about $2.8 billion in the state across a range of renewables, creating more than 2,000 jobs. Every year, the company pays over $115 million to its employees, over $12 million in property taxes, and $7 million in land payments. For example, the Lake Mills Wind Project created 770 construction jobs, $200 million in annual tax revenue, and $180 million in annual landowner payments.
Alliant Energy’s Pleasant Creek Solar Project is the largest solar farm in the state. Combined with the Creston and Wever solar projects that went online at the end of last year, the company now operates 400 MW of solar in Iowa. With over 326,000 hours worked and more than 420 peak craft, we proved that sustainability is about protecting both people and the planet”, Jami Stone, construction project manager at Burns & McDonnell, said after the completion of the first 200 MW.
Photo Courtesy Alliant Energy
ACP and ICF note that investments resulting from the clean energy tax credits would add $846 billion to disposable household income in the next decade, or nearly $77 billion per year, providing $18 billion in total additional income for Iowans; However, if they are stripped away, Iowans and Americans will feel more economic pain. Rhodium Group estimates that American energy costs could increase by as much as 7% by 2035, resulting in an additional $290 per year, which will translate into cumulative annual energy costs exceeding $16 billion in 2030 and more than $33 billion by 2035.
The increase would be due to the loss of new generation capacity, with 57% to 72% less new clean capacity expected to be installed on the grid over the coming decade, and higher costs for fossil fuels. This comes at a time when the country’s electricity demand forecast is set to increase from 2.8% to 15.8% by 2029, mainly driven by the demands of data centers and domestic industrial facilities. Without support for renewables, we cannot meet Americans’ energy demand, nor can we maintain our energy independence and dominance. The House reconciliation bill would cut out the clean energy sector at a time when Americans’ electricity needs are higher than ever and when the country needs every tool in its energy tool belt.
Photo Courtesy Corn Belt Power Cooperative
Moreover, polling indicates that most Iowans are in favor of clean energy. Peak Insights found that 84% of Iowan voters support more renewable energy in Iowa’s energy mix, and 69% approve of “tax breaks for renewable energy producers as a part of the United States tax code.” Every subgroup responded with majority approval on these issues, especially residences in which agriculture provides most of their income. Additionally, 69%, especially Republican voters, agree that wind energy “creates good high paying jobs and helps Iowa’s economy.”
In an op-ed published in the Des Moines Register, Rand Fisher, former state director for the Center for Infrastructure and Economic Development, wrote, “States that lead in energy production attract more businesses, have lower utility rates, and alleviate tax burdens for their citizens…The job creation and activity resulting from construction of clean energy projects provides an economic boost, benefiting local businesses like restaurants, gas stations, and retailers.” In another letter published in the Cedar Rapids Gazette, Sarah Green, executive director of the Iowa Environmental Council, added, “Companies are seeking a business market that can support sustainability goals and provide clean, reliable, and affordable energy. We want to ensure companies look no further than right here in the heart of the Midwest to invest.” Both legislative chambers must pass identical bills deciding the fate of the energy credits before the package can be sent to the President’s desk.
Iowans have recognized their legislators’ efforts to support the clean energy investments. In a letter to the editor published in the Cedar Rapids Gazette, Gerald Edgar, a Republican activist from Hancock County, wrote about the opportunity clean energy presents for veterans, in particular: “Both Sens. Grassley and Ernst have long been champions of our veterans, and I encourage both to continue to support the industries that positively impact our veterans. This, of course, includes the clean energy industry which provides employment opportunities for those who served our nation.”
Sen. Joni Ernst (R-IA) has previously supported clean energy tax credits. Last year, she led a bipartisan group of 52 legislators in sending a letter to the U.S. Department of the Treasury, asking it to issue guidance regarding the Section 45Z Clean Fuel Production Credit, which supports the domestic production of biofuels. Although the reconciliation bill extended this credit through 2031, other clean energy industries need Senator Ernst’s support just as much as the biofuel industry.
In the letter, the senators and representatives wrote, “The 45Z credit should be leveraged to provide a forward-looking, technology-neutral market signal to increase our country’s production capacity for low-carbon, domestic renewable fuels and for existing biofuel production to invest in decarbonization.” They concluded, “If properly implemented, this credit can fully mobilize the biofuel industry, growing our domestic manufacturing base, creating jobs, diversifying the U.S. energy portfolio, adding value to crops grown by American farmers, and offering consumers better, more affordable, and lower carbon options at the fuel pump and in the skies.”
Sen. Chuck Grassley (R-IA) has long supported wind power and is even called the “father” of the Wind Energy Incentives Act, which he penned in 1993. That legislation introduced the country’s first wind energy production tax credit. In a statement issued in 2020, when wind became Iowa’s leading energy source with over 40% of the state’s electricity, he said, “The proof is in the pudding. . . Wind is a critical part of our nation’s all-of-the-above energy strategy. It creates thousands of jobs, supports economic development, boosts tax receipts, attracts investment in our state and puts extra money in farmers’ pockets. It delivers affordable energy for consumers that’s also safe for the environment and helps build American energy independence.”
In an op-ed published in the Des Moines Register last year, Sen. Grassley elaborated on Iowa’s dominance in the wind industry, “If the past 30-plus years are any indication, Iowa will continue to be a pioneer in energy production and take current capabilities to the next level. The federal government’s role will be to help pave pathways for the innovators on the ground, then get out of the way.”
