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 passed 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(CRES) President Heather Reams reacted in a statement, “While we are disappointed that energy tax credits were repealed and substantially cut in the package passed by the House, we are grateful for the champions who have fought to protect critical provisions that incentivize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 Kansas.
Domestic 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 Kansas alone, they would lead to $65 billion in spending and grow the state’s economy by $30 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 undercut 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 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 Kansas City Area Development Council
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 would create 13.7 million jobs in total, or about 1.2 million jobs per year on average, ranging from over 600,000 in 2025 to nearly 1.5 million in 2032. Approximately 20,800 total jobs per year would be created in Kansas alone.
According to data from the Clean Economy Tracker, clean energy manufacturing companies setting up shop in Kansas have committed to or have already created more than 6,500 jobs. In 2022, Panasonic Energy announced a $4 billion investment for a lithium-ion battery manufacturing facility in De Soto, Kansas, that will create 4,000 new jobs. When it is operational, the factory will contribute $400 million to the community over its lifetime, including $248.5 million for local infrastructure upgrades, $19.4 million to support fire and other city services, and $14 million for local schools. Later that year, Orange EV announced it would bring corporate headquarters and manufacturing operations to the Turner Logistics Center in Kansas City. Kansas City Mayor Tyrone Garner reflected, “It is our hope that their environmentally sustainable opportunities will grow our workforce development and economic inclusion goals for many years to come.”
In 2023, Siemens Gamesa Renewable Energy decided to reopen its nacelle production facility in Hutchinson, expanding employment from 90 local workers to 130, and Johnson Controls was awarded a $33 million grant from the U.S. Department of Energy’s Office of Manufacturing and Energy Supply Chains, part of which it used to expand its electric heat pump production at its site in Wichita, where it added 600 jobs. Last year, H&T Recharge invested more than $100 million and created 180 jobs in De Soto to manufacture battery components, and General Motors invested $390 million to retool its Fairfax assembly plant in Kansas City to help produce the Chevrolet Bolt EV.
Construction and operations roles at energy generation facilities are also threatened, as is the property tax revenue they would contribute to local communities. NextEra Energy Resources’ $320 million West Gardner Solar project is permitted and projected to bring 217 megawatts (MW) of clean, renewable energy and 128 megawatts (MW) of battery energy storage to Johnson and Douglas Counties, contribute approximately $40 million in county tax revenue, and create 250 construction jobs. With the recent pushback on clean energy, it is uncertain that this project will come online in 2027 as previously planned.
The unknowns now surrounding the clean energy tax credits threaten the job growth Kansas has experienced in recent years. Since 2018, Kansas has experienced over 20% job growth in solar-related jobs alone, and a 5% increase in clean energy jobs in 2023, which translates into an almost six times faster job growth rate than the overall Kansas economy.
Photo Courtesy West Gardner Solar
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 $16 billion in total additional income for Kansans; However, if they are stripped away, Kansans 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 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 or 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 Orange EV
There is widespread support for clean energy and supportive policies in the state. In a letter to the editor published in the Peabody Gazette-Bulletin, Gene Winkler from Marion County, Kansas, wrote, “From what I’ve seen, clean energy can complement our rural traditions, not threaten them… When done right, clean energy isn’t an outsider coming to take over. It’s a partner that helps our communities move forward on our own terms.” For example, he points to Orsted, which has been building wind turbines on local properties: “From Day One, they didn’t just show up to do business; they showed up asking how they could help. They’ve donated to our food bank, supported the local school, and contributed to the institutions that keep our town running strong. In short, they’ve acted like neighbors.”
In a guest commentary piece published in The Kansas City Star, Tim Woodward, managing director at venture capital firm Prelude Ventures, reflected on his family history and the state’s future in light of Panasonic’s investment: “My parents grew up in the Midwest. My grandfather was an executive at Kansas City Power & Light Co. (now Evergy) and my father grew up in Flint, Michigan, during the Depression. The opportunity and transformation that new manufacturing like the Panasonic plant represented for the Midwest region gave me hope that the government and industry were finally investing in the hometowns my parents had left behind.” He added, “Policies that impede the expansion of renewable energy projects and defund research to further drive down the cost of these clean energy resources will not create economic development in the Midwest, and will hinder U.S. competitiveness in the markets that will drive the global economy throughout the 21st century. Midwesterners should unite in support of the policies that are now under threat. They can build a future of economic abundance and prosperity for the region that our parents and grandparents would be proud of.”
Senator Jerry Moran (R-KS) has long advocated for an all-of-the-above energy approach that incorporates clean energy resources. He has specifically backed renewable fuels, noting, “Promoting the use of renewable fuels means more jobs and markets in Kansas and across the country while lowering prices at the pump and bolstering U.S. energy independence.” After introducing the Financing Our Energy Future Act, which would expand financing tools to all types of energy and infrastructure projects, he said, “Being energy independent requires an all-of-the-above approach to energy production. Emerging renewable energy companies currently do not have access to a number of tax incentives available to other energy companies. Expanding these incentives to more companies will increase U.S. energy production, spur innovation, and help reduce prices for consumers.”
He has also voiced significant support for the clean energy tax credits, saying in a statement, “As Congress works to draft tax legislation, I will support policies, including tax credits that will benefit energy producers in Kansas…We need more investments in energy production, and tax credits are one way to bring production to the U.S., promote our energy independence, support manufacturing jobs in the U.S. and further investments in domestic energy production.” In April, Sen. Moran joined other legislators in a letter to Sen. John Thune (R-SD), the majority leader, advocating for the credits. As discussed in the letter, an all-of-the-above energy approach is vital to American prosperity and national security, and it aligns with both conservative values and the goals of the Trump administration.
The senators explained their hesitance to rip the rug out from the American businesses that have already relied on the tax credits to make substantial investments in expanding their domestic energy production or manufacturing presence: “A wholesale repeal, or the termination of certain individual credits, would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy.” The senators also highlighted their unwillingness to place added hardship on American families: “Given rising energy demand, it is imperative that any modifications to the tax code avoid worsening the economic pressures that American households and businesses already face. For energy credits that provide a direct passthrough benefit to ratepayers, repeals would translate into immediate utility bill increases, placing additional strain on hardworking Americans.”
As Sen. Moran recently told CNN about the rapid attempt to phase out the clean energy tax credits, “We’re going to pay attention to how it affects Kansas. I think there’s a lot of Senate sentiment that it’s too rapid.”
