Senate Finance Committee Budget Would Raise Energy Costs for Americans
The Alliance to Save Energy News
Senate Finance Committee Budget Would Raise Energy Costs for Americans
Washington, DC., June 16, 2005 – Cost saving energy efficiency tax credits would be terminated under a legislative proposal released in the U.S. Senate yesterday.
The plan from the Senate Finance Committee would be part of President Trump’s “Big Beautiful Bill,” a massive budget reconciliation measure that could pass the Senate with a simple majority. Among other things, it eliminates tax credits for a broad swath of energy saving technologies such as home energy efficiency improvements and new energy-efficient homes.
“This Senate draft does little to improve upon last month’s House-passed bill, meaning that every day Americans will carry the burden of rising energy costs,” said Paula Glover, president of the Alliance to Save Energy. “The plan to terminate tax credits for home energy efficiency and other critical programs will increase energy bills for people who can least afford it.”
The proposal would eliminate highly successful programs, such as:
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The Energy Efficient Home Improvement (25C) credit - The Senate bill would terminate the credit 180 days after enactment.
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The New Energy Efficient Home (45L) credit - The Senate bill would terminate the credit 12 months after enactment.
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Senate’s current version of the budget reconciliation bill proposes to terminate (179D) within one year of enactment.
Home efficiency tax credits (25c, 45L) have been around for more than 30 years. These tax incentives are bipartisan policies that reduce energy demand, lower costs and deliver tangible benefits to families, businesses and the broader economy.
In 2023, over 2.3 million households claimed the 25C Energy Efficient Home Improvement Tax Credit, receiving an average tax credit of $882—amounting to approximately $6 billion in total credits—and saving about $130 per year on energy bills.
“Energy efficiency supports more 2.3 million American jobs, many of which are in skilled trades like construction and manufacturing,” said Sapna Gheewala-Dowla, the Alliance’s associate vice president of policy and research. “At the same time, efficiency improvements have saved consumers an estimated $800 billion in energy costs – savings that stay in local economies and help keep businesses competitive.”
The Senate bill also keeps cuts in the House bill to important efficiency programs such as the Greenhouse Gas Reduction Fund, Industrial Demonstrations Program, Green and Resilient Retrofit Program, environmental justice grants, Climate Pollution Reduction Grants and the Loan Programs Office.
“Eliminating proven efficiency programs is short-sighted and counterproductive, especially as we work to combat inflation, strengthen American energy leadership, and ensure affordable energy reaches every community,” Glover said. “This legislation moves us in the wrong direction at a time when the power grid is under increasing strain and energy prices are climbing.”
About the Alliance to Save Energy
Through research, education, and outreach, the Alliance to Save Energy is the leading advocate for federal energy efficiency policy. ASE champions the power of putting energy efficiency first for a broad coalition of members including utility providers, manufacturers, and retailers.
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