Proposed House Budget Plan Threatens $185 Billion in U.S. Clean Energy Investments

A recent analysis by Atlas Public Policy indicates that over $185 billion in U.S. clean energy manufacturing investments, spurred by the Inflation Reduction Act (IRA), are at risk due to proposed legislative changes in the House budget plan.

The House's proposed budget plan seeks to impose restrictions on tax credits established under the IRA, potentially undermining significant investments in low-carbon energy equipment manufacturing. This move could jeopardize thousands of jobs and shift the competitive advantage in clean energy production to international rivals.

Background:

The Inflation Reduction Act (IRA), enacted in August 2022, introduced tax credits and incentives to promote the production of low-carbon energy equipment, including solar components, wind turbines, electric vehicle (EV) batteries, and critical mineral processing.

On June 4, 2025, Atlas Public Policy released a report highlighting:

• Over $185 billion in planned or operational investments in U.S. factories dedicated to low-carbon energy equipment.
• Approximately 62,700 jobs linked to operational facilities.
• 77% of this funding directed toward factories located in Republican-held House districts.

Proposed Legislative Changes:

The House budget plan aims to impose stricter eligibility requirements for tax credits, effectively nullifying subsidies for EV battery plants and other clean energy initiatives. The plan also seeks to repeal or shorten various IRA clean energy and manufacturing incentives, including tax credits for renewable energy projects and energy-efficient home improvements.

The Congressional Budget Office (CBO) estimates that the proposed tax bill, known as the "One Big Beautiful Bill Act," would increase the federal deficit by $2.4 trillion over the next decade and result in approximately 10.9 million people losing health insurance.

Industry Concerns:

Industry leaders, including Bill Ford of Ford Motor Company, have expressed concerns that the proposed changes could jeopardize billions in planned investments across the "battery belt" from Michigan to Georgia.

Political Reactions:

Some Republican lawmakers have cautioned against prematurely repealing energy tax credits that constituents and industries rely on for investments and job creation.

Implications:

The potential rollback of IRA incentives could significantly affect U.S. manufacturing, particularly in regions that have benefited from clean energy investments, leading to job losses and economic downturns. Reducing or eliminating these tax credits could diminish investor confidence and shift the competitive advantage in clean energy production to countries like China and Europe.

The proposed legislative changes pose a significant threat to the progress made under the IRA in promoting clean energy manufacturing and job creation in the U.S. Stakeholders urge policymakers to consider the economic and competitive implications before altering these critical incentives.