Even Alex Epstein, the fossil fuel advocate who has helped GOP lawmakers “enormously” with energy provisions of the reconciliation bill, hates the excise tax on new renewables projects that was snuck into the bill’s latest draft.
Released just before midnight on Friday, the new draft is even worse for the renewables sector than the previous House bill, which was widely criticized. It would sharply phase out existing tax credits for both wind and solar power by the end of 2027, earlier than previous drafts.
But more alarming: It would impose an excise tax on certain wind and solar projects placed into service after that date, whose construction began after June 16 of this year. To avoid the tax, companies would have to source a specified number of components from countries that aren’t on the U.S. list of prohibited foreign entities, which includes China. And they would have to prove it via fulfilling complex reporting requirements.
Epstein — who runs a pro-fossil fuel think tank devoted to the morality of spreading coal, oil, and gas — has risen in Trump’s second term. The once-obscure activist has become a key architect of the reconciliation bill’s energy sections, pushing Republican lawmakers to remove federal subsidies for renewables.
As Jigar Shah, former director of the Department of Energy’s Loan Programs Office, pointed out on the latest episode of the Open Circuit podcast, Epstein has never worked in energy.
“There’s not a single investor who’s like, ‘What does Alex Epstein think?,’” Shah said. “But Lord Almighty, he’s the one that [White House Chief of Staff] Susie Wiles brought to a Republican Senator breakfast.”
But even Epstein, writing Saturday evening on X, renounced the last-minute Senate amendment: “I just learned about the excise tax and it’s definitely not something I would support.”
Elon Musk, the CEO of Tesla and President Donald Trump’s former “first buddy,” also expressed alarm. “The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country!” the billionaire wrote on X, in response to a post about the excise tax. “It gives handouts to industries of the past while severely damaging industries of the future.”
According to a preliminary analysis by the Rhodium Group, the new tax would increase the cost of wind and solar by between 10% and 20% over the next decade, “depending on the pace of cost reductions for these technologies. (This comes on top of losing the tax credits themselves, which would already decrease the installation of new renewables on the grid by between 57% and 72% by 2035.)
“Combined with the likely onerous administrative reporting burden this provision puts in place, these cost increases will lead to even lower wind and solar installations,” the Rhodium Group analysts shared via email. “The impacts of this tax would also flow through to consumers in the form of higher electricity rates.”
The pushback, and the politics
The weekend has seen a rush of industry commentators — and even lawmakers themselves, including Sen. Brian Schatz, the Democrat from Hawaii — expressing existential dread over the new provision. As Bob Keefe, executive director of industry group E2 put it, “this is how you kill an industry.”
It’s unclear whether the pushback, either from Epstein or from the clean energy industry, will have much of an impact as lawmakers enter a frantic “vote-a-rama” over the coming days. (For context, the vote-a-rama over the Inflation Reduction Act that expanded and fortified the very tax credits that are now under threat lasted roughly 16 hours in 2022.)
The tax is still only vaguely rendered. It’s such a recent addition to the 940-page bill that there isn’t yet a calculated budget impact, which could make it easier for Democrats to throw out during the vote-a-rama expected to begin later tonight. But the bill has so many other renewable energy provisions — from an accelerated expiration of clean vehicle credits to adding tax credits for metallurgical coal production — that it’s possible that even the most renewables-friendly lawmakers have other priorities.
After Senate Republicans voted to advance the latest bill draft late last night, debate is expected to begin early tomorrow morning.
The industry’s hope rests now on a few key Republicans, including Sens. Lisa Murkowski (Alaska) and Thom Tillis (N.C.). A reconciliation bill requires just a simple majority to pass, and the GOP holds 53 to the Democrats’ 47 seats.
Earlier today, after President Trump posted on Truth Social that he would support primary challengers against Sen. Tillis’ bid for reelection in 2026, the senator said he would be stepping down, in a statement lamenting the demise of independent thinking in Washington, D.C.
On Sunday night, Sen. Tillis said on the floor of the Senate that he plans not to vote for the bill, both because of its Medicaid cuts and because the energy provisions are “half-baked.”
“If you’re a philosopher and you’re in a think tank, you, by definition, have never worked in an operational role, so you can’t possibly understand what happens to this pipeline of power purchase agreements and the future of our grid,” he said, seemingly referencing Epstein’s influence over the reconciliation process. “I have to vote against the bill from my own party that I have never parted from before, because we’re rushing to an arbitrary deadline with people who have never worked a day in this industry.”
Editor’s note: This story was updated on June 30 to add comments from Sen. Thom Tillis on the floor of the Senate on Sunday evening.
