IER: Renewable Loophole in the One Big Beautiful Bill

[Note: Another excellent expose’ from the folks at the Institute for Energy Research here.]

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1 The One Big Beautiful Bill Act repealed lucrative tax credits for wind and solar, but a loophole allowed the tax credit for battery storage to continue until 2036.

2 New solar capacity is being built with battery storage to capitalize on its tax credit.

3 A recent study of the costs of a renewables system backed by storage batteries for the PJM grid shows buildout costs of more than $4 trillion through 2045, with capacity increases of 800%.

4 Other scenarios limited to new natural gas and nuclear capacity, with and without battery storage, through 2045 saw costs drop significantly and capacity builds of 48 to 62%.

5 A number of states have net-zero carbon policies and battery storage procurement mandates.

6 If policies continue to incentivize intermittent renewable energy backed by expensive battery systems, electricity costs for consumers will likely skyrocket.

7 Europe is already reeling from similar programs that threaten to deindustrialize the continent.

The One Big Beautiful Bill Act (OBBBA) of 2025 phased out hefty solar and wind tax credits created under former President Biden’s Inflation Reduction Act (IRA) passed in 2022. But instead of phasing out battery storage tax credits along with the wind and solar tax credits, the OBBBA phases them out much later — in 2036—which solar developers are now capitalizing on by adding battery storage components to new builds, allowing them to keep earning lucrative clean energy tax credits despite the phaseout. Warren Buffett pointed out more than a decade ago: “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”