Advocacy Teams Backgrounder for 2025 Flex Issue

Historic Progress on Climate Targets

Protecting clean energy investments is essential to creating tens of thousands of jobs, lowering energy costs, and strengthening U.S. energy security. With the Inflation Reduction Act at risk, maintaining these critical tax credits is key to sustaining economic growth and confronting the climate crisis. The Inflation Reduction Act (IRA) (P.L. 117-169) represents the largest climate investment in U.S. history and the most significant global government initiative to confront the climate crisis.

Thanks to FCNL’s critical work to get this landmark law passed in 2022, U.S. greenhouse gas emissions are predicted to decrease by 30% to 43% by 2030 compared to 2005 levels – bringing us within striking distance of the 50% to 52% emissions reduction by 2030 goal laid out by former President Joe Biden. 

The Threat of IRA Repeal 

President Donald Trump’s reelection, coupled with Republican majorities in the House and Senate, have placed the IRA’s clean energy tax credits in danger. President Trump is looking to quickly extend his 2017 tax cuts package and expand cruel immigration detention and deportation. These policies will cost a lot of money. To accomplish these goals without massively increasing the government deficit, House and Senate Republicans will need to look for savings to “offset” the expected cost of these programs. Repealing the IRA is one of the key offsets they are thinking about to help pay for these priorities. 

Repealing the credits would undermine progress toward U.S. climate goals, eliminate thousands of good-paying jobs, stifle billions in clean energy investment, and raise household energy bills. FCNL opposes rescinding any of these essential credits. 

Job Creation at Stake 

A recent study by Aurora Energy Research shows that repealing the IRA’s clean energy tax credits would result in 97,000 fewer American jobs created in construction, maintenance, and operation of power generation facilities. Texas, Oklahoma, New York, and New Jersey would be among the hardest-hit states, though every state would feel the impact. Already since its passage, the IRA has created more than 400,000 new clean energy jobs across 48 states and Puerto Rico. 

Investments in Economic Development at Risk 

Without these tax credits, U.S. states could lose at least $336 billion in clean energy investment by 2040. This amounts to $22 billion in foregone investment nationwide every year. Oklahoma alone stands to lose $1.4 billion annually—roughly equal to 8% of its GDP. Rep. Mariannette Miller-Meeks (IA-1) highlighted Iowa’s success in using these credits to build clean energy statewide, stating: 

“These credits helped Iowa become the first state to generate 40% of its electricity from wind power in 2019, and they will continue to incentivize investments across all energy sectors moving forward.” 

Energy Bills Are Expected to Rise 

The same Aurora Energy Research study also finds that eliminating clean energy tax credits could increase residential electricity bills by 10% on average by 2040. Residents of Texas could see prices rise by as much as 22% and residents of New England could see prices rise 16-17%. These estimated price hikes come as 34% of American households already struggle to pay their power bills every month. 

Weakened Energy Security 

Amid geopolitical uncertainty, the ability to produce affordable, domestic energy is critical for U.S. economic and energy security. Clean energy provides an increasingly cost-effective way to power AI research, next-generation data centers that keep the global economy running, and the revival of American manufacturing. 

A Common-Sense Path Forward 

President Trump has repeatedly emphasized lowering costs for Americans, specifically citing high energy prices as a drag on the entire economy. Repealing clean energy tax credits contradicts this objective by threatening job creation, slowing economic growth, and increasing household power bills. 

Protecting the historically bipartisan clean energy tax credits passed under the IRA is a pragmatic solution to continue to bring down prices for everyday Americans, confront the climate crisis, and build a more resilient country for all.