Will Trump, Republicans take away consumer credits for EVs, home improvements?

Start saying goodbye to a lot of big clean energy credits if President Donald Trump and the Republican Congress have their way this week.

The GOP-run House is ready to vote on repealing or diluting a long list of measures that, among things, currently allow qualified buyers of energy-efficient vehicles to get $7,500 back. Or permit consumers to get credits for certain heat pumps and other household energy savers.

Opponents of the changes see environmental and economic disaster

Rep. Mike Thompson, D-St. Helena, tried to keep the credits intact. His bid lost in a 25 to 19 party-line vote in the House Ways and Means Committee.

Thompson pointed out that the credits are helping create jobs in Republican as well as Democratic congressional districts.

“To say stop…is crazy,” he said.

Supporters of the changes countered that the legislation would end a system that’s complicated, favors higher-income earners and discourages the use of more traditional types of energy.

The changes are part of the “one big, beautiful” tax and budget bill the House is considering.

The bill would extend current income tax rates and breaks due to expire at the end of the year. Republican leaders see repealing most of the clean energy breaks enacted during President Joe Biden’s administration as a useful way to pay for the changes..

All this has a long way to go in Congress. A lot of more moderate Republicans are reluctant to repeal the clean energy incentives. A group of conservatives dislikes how the breaks add trillions to the nation’s debt.

Even if the bill does pass the House, and leaders are aiming for a Thursday vote, it has to survive the Senate, where it also faces strong Democratic and moderate Republican opposition.

Help for consumers

Under current law, consumers can qualify for a credit of up to $7,500 if they buy a new, qualified plug-in electric vehicle or fuel cell electric vehicles purchased from 2023 to 2031.

Buyers have to use it themselves, use it primarily in this country and have a modified gross income of no more than $300,000 for married couples filing jointly or surviving spouse, or $225,000 for heads of households and $150,000 for all others.

Another popular credit helps homeowners. The Residential Clean Energy Credit is 30% of qualifying products and services installed in a home in this country from 2022 to 2032. The credit can apply to solar electric panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells and battery storage technology.

The internal Revenue Service says credits can be used for “labor costs for onsite preparation, assembly or original installation of the property and for piping or wiring to connect it to the home.”

Clean energy advocates say that rolling back these credits will be costly not only in dollars, but in environmental damage.

“This bill would pull the rug out from under one of the most dynamic parts of the American economy. These tax credits have helped deliver billions of dollars in new investments in homegrown American energy,” said Christy Goldfuss, Natural Resources Defense Council executive director.

The organization estimates that the cutbacks would increase residential electricity bills in California by 3% by 2032 and by 6% by 2040.

That means every state household would spend about $940 more on their electricity bills over the next two decades.

E2, a national nonpartisan business group, said clean energy and clean vehicle companies added 149,170 new jobs in just the first year after the passage of the 2022 law, including 21,600 jobs in California.

Today, about 3.5 million Americans work in clean energy-related jobs, including nearly 550,000 Californians, according to E2.

Overall, the credits and other grants are estimated to add $133 billion to the state’s economy and attract $246 billion in new investments over the next 10 years, according to the NRDC, supporting 91,500 jobs a year in the state.

The conservative view

Many conservatives are determined to repeal or at least delay and dilute most of the clean energy breaks.

The law “contains eight major energy subsidies, each of which burdens taxpayers, inflates energy costs, and threatens the reliability of our power grid,” wrote 38 Republicans – none from California – to Trump and congressional leaders last month.

“Each of these subsidies props up unreliable energy sources while displacing dependable, proven energy like coal and natural gas,” they said.

At the center-right Tax Foundation, Alex Muresianu, senior policy analyst, had another take on why changes would be useful: The current system is a complex maze of laws that few consumers can understand. A more comprehensible tax code would make more sense, he said..

“Tax simplification has two aspects. The first is a code without a mess of targeted provisions for various social policy goals. The second is a code with provisions that are simple and easy to comply with,” he said.

While the bill succeeds at the first goal, he still saw it not going far enough in eliminating complex rules and establishing new ones.

A lot of conservatives remained adamant that the breaks get tossed.

“Congress has to stop repeating history — we know that keeping wind and solar credits in this bill will drain taxpayers, offshore American jobs, and prevent American energy dominance,” said Rep. Josh Brecheen, R-Okla. “President Trump has been clear: it’s time to end the Green New Scam.”

They’re in for a fight, especially in the Senate, where Democrats are planning their battle.

The changes are not about compromising this country’s energy strategy, said Sen. Alex Padilla, D-Calif.

“It’s about protecting their oil and gas donors, ceding the global clean car market to China, and keeping Americans dependent on polluting vehicles that poison our air,” he said.

This story was originally published May 20, 2025 at 11:20 AM with the headline "Will Trump, Republicans take away consumer credits for EVs, home improvements?."

David Lightman

McClatchy DC

David Lightman is a former journalist for the DCBureau