The House Ways & Means Committee’s 2025 budget Reconciliation bill proposes major rollbacks to the Inflation Reduction Act’s tech-neutral clean energy tax credits, particularly Sections 45Y and 48E. To assess the impact, we developed custom deployment models for five policy scenarios, each evaluated independently using the Energy Policy Simulator (EPS) by Energy Innovation to estimate net economic and emissions effects at the national level, as well as within a select number of states.

The most disruptive scenario involves restrictions on projects using components linked to Foreign Entities of Concern (FEOCs). These “material assistance” rules would disqualify a large share of clean energy projects, leading to 1.4 million cumulative jobs lost, $237 billion in GDP decline, and a 6% increase in national emissions through 2035. An early sunset of the 45Y and 48E credits is similarly damaging, eliminating long-term certainty and stalling investment in major clean energy projects. This scenario results in nearly 1 million cumulative jobs lost and $177 billion in GDP losses through 2035.

Other rollbacks are less severe but nonetheless significant. Removing credit transferability leads to 237,000 cumulative jobs lost and $49 billion in GDP decline, disproportionately affecting smaller developers. The only provision with no measurable impact is the FEOC entity-level restriction, which targets project ownership rather than component sourcing. As an alternative, a hypothetical storage mandate for wind and solar was modeled, which projects 88,000 cumulative jobs lost and $37 billion in losses, with minimal emissions impacts.

State-level findings follow similar trends, with the largest losses concentrated in clean energy investment hubs like Texas, North Carolina, Louisiana, and Indiana. State-level economic losses reach as high as over 170,000 jobs and $20 billion in GDP, in some cases. These results suggest that, to varying degrees, each major provision of the proposed Reconciliation bill threatens to cause large economic losses across a wide variety of technologies, industries, and geographies.