In a recent development, Republican Congressman Julie Fedorchak from North Dakota has introduced a bill titled the Ending Intermittent Energy Subsidies Act of 2025. This proposal aims to phase out production tax credits (PTC) and investment tax credits (ITC) for wind and solar projects over the next five years. Fedorchak argues that these subsidies have significantly distorted the energy market and must be responsibly withdrawn.
According to the proposed legislation, the tax incentives for wind and solar energy will be gradually reduced by 20% each year. In contrast, technologies that provide reliable and dispatchable power, such as nuclear, hydropower, and geothermal energy, will continue to receive these tax credits. Furthermore, the bill seeks to eliminate the transferability of tax credits for wind and solar, preventing these incentives from being sold to third parties, a move Fedorchak believes artificially inflates the value of the subsidies and exacerbates market imbalances.
Fedorchak emphasizes that wind and solar energy are no longer emerging technologies but rather established forms of energy that have been validated by the market. She criticizes the current subsidy system for excessively rewarding intermittent energy sources that cannot be dispatched on demand, leading to the premature retirement of stable baseload power sources like coal, natural gas, and nuclear energy. This, she argues, has resulted in a reliability crisis in the power grid. Citing estimates from the Cato Institute, she claims that these subsidy provisions could cost taxpayers up to $901 billion over the next decade.
“Continuing to incentivize these intermittent energy sources through generous tax credits distorts the energy market and sends completely misleading signals to investors,” Fedorchak stated. “As all grid operators have called for, we need more dispatchable power sources. We must stop subsidy policies that run counter to this goal.”
The bill has garnered support from several fellow Republican members of the Energy and Commerce Committee, including Gary Palmer, Randy Weber, and Craig Goldman. Goldman remarked, “This important legislation will curb excessive government spending and help restore balance to the energy market.” In addition, Fedorchak has submitted a separate resolution, numbered H.Res.290, aimed at preventing the early retirement of reliable baseload power sources like coal and natural gas without dependable alternatives.
To provide context, the PTC and ITC originate from the Inflation Reduction Act, which supports various zero-carbon energy production tax credits and investment tax credits. These tax incentives, established in sections 45Y and 48E of the Act, apply to projects that begin operation after December 31, 2024. They encompass not only wind and solar but also nuclear, hydropower, geothermal, and battery storage technologies. Notably, President Biden finalized regulations concerning clean power tax credits shortly before leaving office in January 2025, making any future changes to the list of eligible technologies subject to a complex interdepartmental negotiation process.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/us-lawmaker-proposes-phasing-out-renewable-energy-tax-credits-within-five-years/
