How Congress is Reversing New York’s Progress on Clean Energy

Update: The House passed the bill shortly after publication and President Trump is expected to sign it by July 4 as planned.

Now, Republicans in Congress are poised to gut those clean energy tax credits, which President Donald Trump has called a “giant SCAM.” On Tuesday, the US Senate passed a giant tax and spending bill that includes phasing out the tax credits, sending it back to the House, which passed its own version of the bill in May and worked through Wednesday night with the aim of approving the final package by Trump’s July 4 deadline.

“The Senate passed a reckless reconciliation bill that would be a devastating blow to New York’s economy and a clean energy future,” the New York League of Conservation Voters said in a statement on Wednesday. “If this bill is passed, it will mean higher electricity costs and the loss of tens of thousands of jobs for New Yorkers.”

Already, green energy businesses are feeling the impact. Customers are reluctant to install solar panels or a geothermal heating system with the tax credits in doubt.

“It’s completely devastating,” said Rob Feuer, owner of Geothermal Works in New Rochelle. “It’s like you turned off a faucet.”

His company builds geothermal heating and cooling systems for homes that transfer heat energy from deep in the earth, where the temperature is always 52 degrees. “By this time last year, we had 30 jobs. Now, we’re down to three,” Feuer said.

Oliver Koehler, founder and owner of SunTegra Solar, a small Westchester business that builds and sells solar shingles for homes, said he’s going out of business and laying off his two employees. “The current administration has really put a death sentence on the residential part of the solar business,” Koehler said.

Noah Ginsburg, executive director of the New York Solar Energy Industries Association, a trade group, estimates half of the 16,000 solar energy jobs in New York state will be lost if the credits expire.

“It’s folks who are involved in the marketing, sales, design, project management, financing, and, of course, the construction and operation of solar energy systems in the state,” Ginsburg said.

“It’s going to become incredibly challenging for businesses to sell solar when the upfront cost to a consumer is now 30 percent higher.”

President Donald Trump has long disparaged the Inflation Reduction Act as the “Green New Scam” and calls solar power “ridiculous.”

Green energy tax credits sparked a surge in renewable energy, including solar farms and battery storage facilities, which store energy from solar farms to use when the sun doesn’t shine. For example, NineDot Energy has built battery farms in the Bronx, Brooklyn, Staten Island, and Westchester that Con Edison uses to store electricity to release at times of peak demand.

Manufacturing has also received a boost. A factory in Wellsville, in the foothills of the Appalachian mountains near the Pennsylvania border, used to produce parts for coal-fired power plants. With tax breaks from the Inflation Reduction Act, the Ljungström factory retooled to produce parts for wind turbines to be mounted off the coast of Long Island. The Port of Coeymans, on the Hudson River south of Albany, is also producing parts for wind turbines.

All told, renewable energy projects have created more than 4,000 construction jobs and $1 billion in investment in New York since 2022, according to an analysis by the Rhodium Group, a research and policy group, for New York Focus.

Companies have announced an additional $780 million in planned investments that would create about 14,000 construction jobs and 4,000 permanent jobs in New York state, according to the analysis.

What happens to these projects now is anyone’s guess, said Hannah Hess, associate director of the Rhodium Group.

“It’s wait and see,” Hess said. “We would consider all of the facilities that are under construction or have not yet broken ground to be at risk.”

The debate puts New York’s Republicans in Congress in a tight spot. Many of the economic benefits of clean energy, such as the jobs from two giant wind farms under construction off the coast of Long Island, flow to Republican districts. Three Republican congressmen — Mike Lawler of the Hudson Valley and Andrew Garbarino and Nick LaLota of Long Island — lobbied unsuccessfully to maintain certain tax credits in the House bill.

On June 6, they signed a letter to Senate Majority Leader John Thune asking him to tweak the bill to allow credits for projects that have begun construction, such as Empire Wind and Sunrise Wind, the two wind power projects.

The Senate version of the bill does protect projects that are already under construction, but phases out residential credits for solar and geothermal power by the end of the year. It adds tight construction deadlines for large-scale solar and wind projects that hope to keep their tax credits, and adds complex — some say unworkable — restrictions on imported materials for projects that begin after the end of this year.

The tax changes come on top of Trump’s tariffs, which dealt a major blow to a clean energy industry that is heavily dependent on imported parts. At SunTegra Solar, for example, Koehler buys framing and mounting materials from businesses in New York and assembles them locally — but buys one component, called a solar laminate, from Vietnam.

“We have a container sitting in Vietnam that we can’t ship because the tariff rate has become exorbitant,” he said.

The goods are worth $50,000. The tariff is $100,000.