A sweeping House Republican bill guts clean energy tax credits, threatening Southeast jobs, raising energy costs, and reversing climate progress—putting over $73 billion in regional investment and U.S. competitiveness at risk.
Stephen Smith and Chris Carnevale | May 22, 2025
| Energy Policy, Southeast, Utilities
The major Republican bill passed this morning by the U.S. House of Representatives aims to decimate the incentives and tax credits in the Inflation Reduction Act (IRA), our nation’s largest climate and clean energy legislation, passed in 2022 under the Biden Administration.
If this bill comes to fruition, it will raise everyone’s energy costs, take away hundreds of thousands of clean energy workers’ livelihoods, and leave the environment more polluted.
Here in the Southeast, our households, neighbors, friends, and family members will be particularly hard hit by the negative effects of this bill, as it repeals policies supporting major economic development projects in our region, while also leaving electric utilities unable to meet growing electricity demand.
The version of the bill passed this morning by the full House kept all of the same problems of the dangerous draft text that was unveiled last week, and was actually made WORSE last night. The bill will repeal the availability of tax credits for clean energy and transportation, which are the primary federal policy drivers of clean energy deployment. Their repeal will have harmful effects for consumers and businesses and will devastate some industries.
This version of the House bill is the worst case scenario for clean energy growth, environmental and human health protections, and United States competitiveness in the 21st century, with devastating impacts on middle class consumers. Worst of all, citizens across the Southeast will be hit hardest as this version of the bill destroys multiple growth industries in our region, including battery manufacturing, electric vehicles production, and renewable energy manufacturing and supply chain industries.
The bill runs counter to the administration’s stated goals of expanding energy production by undercutting the fastest-growing energy resources – solar, wind, and battery storage – while unrealistically expecting fossil fuels like coal and methane to meet all expanding load growth. It forces consumers to pay more for energy by destroying the energy efficiency tax credits and slowing the adoption of electric vehicles. Collectively, it cedes the technology playing field to China for advanced automobiles and clean energy while completely ignoring the science of climate disruption gripping our planet today.
Devastation for Southeast Industries
The House bill would devastate key areas of economic growth in the Southeast, putting a bullseye on vehicle and battery manufacturing, which has led to historic economic development trends in Southeastern states in recent years. Between North Carolina, Tennessee, South Carolina, Georgia, and Florida, companies have announced more than $73 billion in private investment into the clean energy industry supply chain, and more than 92,000 new clean energy jobs, under the current tax credit laws, which the House Republicans’ bill seeks to undo.
The bill in Congress would repeal the tax credits that incentivize purchasing electric vehicles and repeal federal vehicle emissions standards, which, taken together, could reduce sales of electric vehicles by 40% in 2030. According to experts, this would put as much as 100% of planned construction and expansion of U.S. electric vehicle assembly and half of existing assembly capacity at risk of cancellation or closure, and could put 29-72% of battery cell manufacturing capacity currently operating or online by the end of 2025 at risk of closure, in addition to 100% of other planned facilities.
The Economic Impact on Consumers
One underappreciated fact of the clean energy tax credits in IRA is that they lower energy prices for all Americans, not just the taxpayers who claim the credits. When tax credits, like those in IRA, incentivize consumers to switch to electric vehicles, demand for gasoline decreases, and with lower demand comes lower prices at the pump for all non-electric drivers. The version of the new bill passed by the House would raise energy costs for consumers on multiple fronts: higher prices for electricity, higher gasoline prices at the pump, and higher prices for methane gas, often erroneously referred to as “natural” gas.
Southeast States Hit Hard
Multiple expert firms have modeled the impact of repealing clean energy and transportation tax credits, and they have unanimously found that household energy bills will increase. For example, one analysis found that average household energy costs would rise by $110-$180 in 2030, growing to $275-$400 by 2035.
Another study looked at state-by-state impacts and found that the Southeast would be very hard hit by rising energy costs, with North Carolinians, South Carolinians, and Tennesseans facing 10-15% higher prices for residential customers in 2026 and 2029, and commercial and industrial customers in these states paying 15-22% higher electricity prices in 2026 and 2029. Increased energy costs for businesses will make them less competitive globally.
The price for gasoline that consumers pay at the pump would increase by 5-15 cents per gallon.
Clearly, the implications for our region and the nation are dire. We’ll take a deeper dive in an upcoming article, but at this juncture, as the bill moves to the Senate, it’s also helpful to consider recent analysis discussed on the Heatmap News ‘Shift Key’ podcast with guests Robinson Meyer and Jesse Jenkins. Highlights include:
Economic Impact on Consumers
- The Republican House bill would significantly increase energy costs for American households and businesses
- Average household energy costs would rise by $110-$180 in 2030, growing to $275-$400 by 2035
- The bill effectively functions as a “backdoor gas tax” – removing EV incentives increases gasoline demand and prices by an estimated $0.05-$0.15 per gallon
- Industrial electricity rates would increase 7-12% by 2035, making American businesses less competitive globally
Devastating Impact on the Southeast’s “Battery Belt”
- The bill would particularly harm the Southeast, where massive battery and EV manufacturing investments are concentrated in states like Georgia, North Carolina, South Carolina, Tennessee, and Kentucky
- Jenkins specifically notes this “battery boom” is happening “in mostly Republican districts”
- The 40% reduction in EV sales would make most planned battery manufacturing capacity “redundant” – meaning factories would be “idled or have to be repurposed to build internal combustion cars”
- Investments in “new product lines and new assembly lines and robotics, and everything else would be wasted”
- The region has also seen significant growth in manufacturing electricity demand as part of the broader “Battery Belt” development
- This represents a particularly stark political irony – Republican-led legislation undermining major industrial investments in Republican states
Emissions and Climate Impact
- Dismantling current policies would increase greenhouse gas emissions by approximately 500 million tons by 2030, rising to over 1 billion tons by 2035
- This represents a massive reversal – US energy emissions are currently about 5 gigatons total
- The bill would slow but not halt the energy transition, reverting the US to close to pre-IRA emission levels
- Major increases come from repealing EPA power plant regulations and clean electricity tax credits
Power Sector Consequences
- The bill threatens America’s ability to meet surging electricity demand, particularly from data centers and AI development
- In the near term, emissions would actually increase as coal plants ramp up to meet demand that clean energy can no longer fill
- Solar and wind deployment would collapse after initial momentum, unable to keep pace with demand growth
- This creates higher electricity prices despite lower overall electricity usage
Manufacturing and Jobs Impact
- The bill would “decimate” the emerging US battery manufacturing sector, making most planned capacity additions redundant
- About 8 million fewer electric vehicles would be sold by 2030, undermining the entire EV supply chain
- This contradicts the Trump administration’s goals of building domestic critical mineral capacity, as it destroys downstream demand
Policy Mechanisms
The House bill operates through several mechanisms:
- Ending IRA tax credits by 2026 (much more aggressive than initially expected)
- Repealing EPA emissions regulations on power plants, transportation, and methane
- Including “poison pill” foreign entity of concern clauses that make remaining tax credits practically unusable
- Rescinding unspent grant funding from federal agencies
In summary, the House bill is much more aggressive than many expected, approaching full repeal rather than surgical modifications. It comes at a particularly bad time as electricity demand is surging due to data centers, manufacturing, and electrification, and Republican moderates who might have opposed these cuts have largely failed to mount effective resistance.
As we follow the Senate deliberations around this bill, SACE will continue to share information and ways to reach out to your elected officials to share your concerns.
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