Power in Flux // June 17, 2025 // Senate Responses to OBBB

Hi all – We have an update on the latest happenings with the “One Big Beautiful Bill.”

 The Senate Finance Committee has released its proposed revisions, easing the House’s aggressive rollback of clean energy tax credits and shifting focus to firm resources.

 Key Wins: The Senate version revives credits for wind, solar, and firm clean technologies (like nuclear, energy storage, geothermal, nuclear, and hydro) and increases the carbon capture tax credit (45Q) for EOR applications in comparison to the House plan.

 Keep reading for what’s changed and what it may possibly mean for the power industry.

Senate Finance Committee Responses to OBBB // June 2025

 Senate Finance Committee Legislative Text, Title VII

On June 16, the Senate Finance Committee published its proposed revisions to the H.R.1 "One Big Beautiful Bill" (If you need a quick refresher on the House’s proposed OBBB, click here to read the Power in Flux from May 23.)

The table below highlights the key differences between the House and Senate versions of the bill regarding the clean energy tax credits.

What this Means:

• More runway for firm clean energy. Technologies like energy storage, geothermal, nuclear, and hydro would benefit from longer credit access through 2035.

• Wind and solar face a tighter clock.  Projects must move quickly as credits begin to phase out after 2025 (and removed completely by end of 2028).

• Transferability preserved. Continued access to credit transfers keeps third-party financing options viable for developers.

• Stronger incentives for carbon capture. Higher 45Q values for EOR may help the economics of CCUS projects and may increase project development opportunities.

• Hydrogen Market still at Risk: Full repeal of 45V may severely hinder clean hydrogen development, as the sector remains high-cost and heavily dependent on incentives.

The bottom line: Nothing is final yet. The Senate must still vote on its version, which would then return to the House for approval before reaching the President’s desk. While the initial goal was to sign the bill by July 4, some experts expect the process to stretch into September or October.

Senate Finance Committee Responses to OBBB // June 2025

 Senate Finance Committee Legislative Text, Title VII

On June 16, the Senate Finance Committee released proposed changes to the H.R.1 “One Big Beautiful Bill.” Compared to the House version, the Senate plan offers a more moderate approach, softening the proposed rollbacks to clean energy tax credits. While it still sets a path to phase down incentives, it gives technologies like storage and carbon capture more breathing room, extending eligibility and easing transition timelines.

The Senate is expected to vote on its version of the budget reconciliation bill before the July 4 recess. 

Key Changes proposed by Senate Version

45Y – Clean Electricity PTC

• Removes requirement to start construction within 60 days of enactment.

• Separates projects into “Solar/Wind” and “Other” eligible facilities (including energy storage, geothermal, nuclear, and hydro)

• Still phases out credit solar/wind but allows projects starting construction in 2027 (or earlier) to qualify with softer phase-down. Includes a phasedown beginning in 2033 for other types of eligible facilities, which is not a significant change from current law. See the following table for more details regarding the credit phase out schedule.

48E – Clean Electricity ITC

• See 45Y.

45Q – Carbon Sequestration Credit

• Current IRA has a distinction between value of CO2 stored geologically vs. used for EOR. Senate version boosts value of EOR to match that of geologic storage. [Point Source: $85/ton (up from $60), DAC: $180/ton for DAC (up from $130)]

• Restores transferability to the lifetime of the tax credit. 

• Inflation adjustment pushed back. Shifts indexing year for credit adjustments from 2027 to 202. Shifts inflation-index base year from 2025 to 2026

45V – Clean Hydrogen Production Credit

• No change from House version.

• Ends after December 31, 2025

45Z – Clean Fuel Production Credit

• No change from House version.

• Remains extended through 2031.

Main Agencies Involved

• Department of the Treasury / Internal Revenue Service (IRS)

• Department of Energy (DOE)

• Environmental Protection Agency (EPA)

• Department of Transportation (DOT)

Risks

• Accelerated Sunset for Solar and Wind. Projects must begin construction by end of 2027 to qualify for any credit. This creates a tight development window and could leave late-stage projects stranded. That said, it is still more flexible than the House’s stricter 60-day requirement to commence construction.

• Loss of Hydrogen Support. The full elimination of 45V after 2025 introduces major uncertainty for the hydrogen sector. With high costs and no transitional support, momentum for hydrogen industry may stall.

• Policy Instability. Frequent changes in clean energy tax policy continue to create uncertainty. This complicates long-term investment and development decisions across all technologies.

Opportunities

• Softer Phase-Out for Solar and Wind. Compared to the House version, the Senate’s plan gives solar and wind developers more time to qualify by removing the 60-day window and allowing projects through 2027 to still receive the credit.

• Stronger Support for Firm Clean Energy. Energy storage, geothermal, nuclear, and hydro technologies benefit from longer credit eligibility, giving developers more time to bring projects online.

• Higher Value for CCUS. Aligning 45Q values for geologic storage and enhanced oil recovery could expand the business case for more carbon capture facilities.

While the Senate’s version of the “One Big Beautiful Bill” offers a softer approach than the House proposal, it still marks a narrowing window for solar and wind tax credit support. At the same time, it retains support for firm, clean technologies. The next milestone will be a Senate vote, expected before the July 4 recess.

I will keep tracking changes and will report back with any major updates.