Budget bill threatens major clean energy investments and jobs in Kentucky
Republished from Kentucky Lantern
The budget bill being debated in the U.S. Senate threatens thousands of jobs and billions of dollars of investment in Kentucky’s clean energy sector. The proposed bill would repeal numerous clean energy tax credits and programs that directly benefit Kentuckians. These tax credits are helping individuals, small businesses, farmers and corporations alike reduce their energy bills, increase energy independence, and build new energy resources in Kentucky.
The harm this would cause would be widespread and felt by people across the commonwealth, through increased energy costs, business closures, layoffs, lost economic development, and reduced access to low-cost renewable energy. Among its many harmful provisions, the House version of the bill would:
- Terminate residential tax credits for solar, batteries and energy efficiency measures at the end of 2025.
- Rapidly phase out commercial solar tax credits, ending the credits for projects that begin construction more than 60 days after passage of the bill.
- End tax credits for new and used electric vehicles at the end of 2025.
These tax credits are presently planned to last until at least 2032, to provide the long-term stability and predictability needed to support private investment in hiring, infrastructure, and manufacturing. Abruptly ending these tax incentives will sabotage the growth of these industries and the promise they offer to Kentucky and the nation.
Solar, wind, and battery storage are now essential contributors to the nation’s electric grid and economy. In 2024, solar accounted for 61% of all new electric generation capacity built in the U.S. According to the U.S. Department of Energy, there were 365,000 people employed in the solar industry in 2023. Solar is now the lowest-cost source of electricity and batteries are used at-scale to maintain grid reliability and reduce costs at times of peak demand. Nationwide, solar supplied 7% of all electricity produced in 2024, a remarkable fact considering it accounted for less than 0.1% in 2010. Solar and wind now account for nearly 25% of the nation’s electricity supply.
Recent years have seen major growth in Kentucky’s clean energy sector, with billions of dollars of investment in new battery factories and utility-scale and rooftop solar, creating thousands of jobs in communities across Kentucky. Despite its relatively small population, Kentucky has seen some of the greatest investments in clean energy infrastructure in the country. These investments are helping support grid reliability and reduce costs for consumers.
Among these developments are factories for manufacturing batteries and their components for the EV and utility industries in Bowling Green, Shelbyville, Hardin County and Hopkinsville; utility-scale solar facilities being developed on reclaimed mine lands in Martin and Pike County; and thousands of individual homes and businesses installing solar to reduce their utility costs.
These developments are threatened by the budget bill passed by House Republicans and now being considered in the Senate. There is still time to remove these provisions from the reconciliation bill. Senators Rand Paul and Mitch McConnell can stand up for Kentucky by preserving these clean energy tax credits.
Kentucky Lantern is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: [email protected]. Follow Kentucky Lantern on Facebook and Twitter. Kentucky Lantern stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
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