The Future of the IRA

With the election of President Trump and the Republicans likely winning a majority in the House of Representatives and having won a majority in the Senate, beneficiaries of the IRA tax credits are wondering if the Republican Party will eliminate the IRA tax credits. A full repeal is unlikely, but adjustments are possible given political dynamics and recent policy statements. Secured Carbon is optimistic that transferable, clean energy tax credits that increase American manufacturing capacity will remain in place under the Trump administration. The rationale for such a conclusion is five-fold.

1. Legislative Challenges

​TITLE III—REPEAL MARKET DISTORTING GREEN TAX CREDITS of H.R. 2811, known as the Limit, Save, Grow Act of 2023, proposed to repeal various clean energy tax credits and programs established under the IRA to limit federal spending on renewable energy initiatives. It was co-sponsored by 19 Republican members of the 118th Congress, passed the House of Representatives but not the Senate. Legislation does not carry over between Congresses. For the Senate to pass this bill during the 119th Congress, the bill or something similar would have to overcome a potential Democratic filibuster which requires a supermajority of 60 votes. Given the current political landscape, achieving this would need bipartisan support.

2. Budget

Second, Republicans could vote to change the budget for IRA tax credits, however, the process to do so is cumbersome. The Congressional Budget Act allows Congress to revise the US budget through legislative reconciliation. Reconciliation permits Congress to reduce spending of US budgetary legislation which would include the IRA. However, eliminating the budget for the IRA tax credits would meet resistance in the House of Representatives since at least 18 Republican members of the House explicitly supported the IRA tax credits in 2024 and the strong public support for the IRA.

3. Veto Powers

Third, the executive powers of the US president are limited regarding changing existing regulations. President Trump could not repeal existing US Treasury regulations that now govern IRA tax credits. However, the President could stop the development of new regulations.

4. Popular Support

Fourth, from a commonsense perspective, Republican members of Congress have significant public support to retain IRA tax credits. In September 2024, the Solar Energy Industries Association published a poll in which 78% of self-described Trump voters answered that they support the IRA’s renewable energy tax credits. In addition, most states have benefited economically from the IRA tax credits.

5. Rising Demand for Electricity

Finally, the rapid growth in demand for electricity by data centers to support AI, the need to upgrade aged electrical grid and the threat of power outages due to climate change support the continuation of the IRA tax credits.

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