This commentary is by Alex Messinger of Burlington. He is co-leader of the Vermont Chapter of Citizens’ Climate Lobby.
On May 22, the U.S. House of Representatives passed a budget bill that drastically cuts America’s clean energy tax credits, which are part of the Inflation Reduction Act passed in 2022. The bill now moves to the Senate.
Senators have the opportunity to protect those credits, which are expected to deliver 12,000 jobs and generate $500 million in additional new income for Vermonters over the next 10 years. If these credits are ultimately cut, we’ll lose this boost to our economy, all Vermonters will face increased energy costs and those who want to make upgrades will miss out on thousands of dollars in incentives for things like heat pumps, energy efficiency upgrades and solar panels.
Housing and energy costs are too high for Vermonters already. Vermont households spend an average of $7,000 on energy costs per year, the third-highest in the country relative to income. If the IRA’s clean energy tax credits go away, national residential electricity rates will increase by an average of 7% by 2029. Fewer clean energy projects will be financially viable.
This means fewer clean and cheap power sources will be deployed at a time when electricity demand is expected to rise quickly due to rapidly expanding data centers, artificial intelligence, electrification of vehicles and buildings and air-conditioning use as temperatures rise. Less supply means more demand and energy prices go up.
Low-income Vermonters will be especially hard hit. Through the rebates available in the IRA, they can save an average of 42% on home energy bills when they upgrade their energy efficiency. Also at risk is the $22 million grant awarded in March 2025 as part of the Solar for All program, which helps install solar power on low-income housing.
Tax credits are designed to be a temporary measure, but stopping them quickly is bad for business. The IRA tax credits are supposed to last at least until 2028. The current House bill ends many programs by the end of 2025.
This week I have spoken with three different solar installers who do work in Vermont and the rest of New England. They all say the same thing — reducing these credits abruptly would cause a short-lived spike in demand, but then a steep drop in in their solar business.
There’s one clear reason why solar, heat pumps and other clean energy are on the chopping block — they are so successful that they are a threat to the fossil fuel industry. Solar is the fastest-growing source of energy and the second-cheapest to build after wind energy.
And for the past 3 years, heat pumps have outsold gas furnaces nationally. If you want to join the over 60,000 Vermont households and businesses that already have a heat pump, you’re going to pay thousands of dollars more for it without the IRA tax credits.
While our Sens. Welch and Sanders support these tax credits, it’s not enough. Even if every Senate Democrat supports maintaining these tax credits in the reconciliation bill, it’s still not enough.
We need Republican Senators across the country to stand up to the pressure to vote for this bill. Many of these Senators would lose billions of investment dollars and thousands of jobs in their home states if the IRA tax credits are repealed.
The best thing we can do as Vermonters is urge our friends and family in Republican states to advocate for keeping the IRA tax credits. The numbers are clear: clean energy tax credits are working for Vermont. Undoing them now — as the House just voted to do — would be reckless and harmful.
