For Immediate Release
May 21, 2025

Economic Impact of Proposed Clean Energy Tax Credit Restrictions

FEOC Restriction -> $237 Billion in Lost GDP & Over 1.4 Million Jobs at Stake

WASHINGTON—Proposed restrictions on technology-neutral clean electricity tax credits currently under consideration in Congress would create unnecessary barriers to deployment, undermine economic growth, and drive up costs for American families and businesses. With energy demand rising and U.S. manufacturing poised for continued expansion, these provisions would stall investment, weaken domestic supply chains, and disrupt job creation nationwide.

A new analysis from Greenline Insights, supported by the Center for Climate and Energy Solutions (C2ES), finds that the House-imposed restrictions on Foreign Entities of Concern (FEOC) alone could result in:

• $237 billion in lost GDP
• $162 billion in lost wages
• 1.4 million job-years wiped out

At a moment when the private sector stands poised to make generational investments in America’s energy and manufacturing future, policymakers should be focused on the way these investments can strengthen the economic vitality of the communities they represent. These restrictive provisions would jeopardize investments in nuclear power, geothermal energy, wind, solar, energy storage, and other emerging technologies, putting the United States at a disadvantage while global competitors double down on investments in their energy and manufacturing sectors.

Beyond FEOC provisions, additional limitations in the reconciliation package introduce further risks—disrupting energy infrastructure development that would undergird our long-term economic prosperity, while leading to significant losses in jobs, wages, and economic output. Specifically:

• A 2029 “placed in service” requirement could cost nearly 977,000 jobs, reduce wages by $117 billion, and cut $177 billion from GDP.
• New transferability restrictions, which would greatly diminish access to clean energy project financing, could eliminate 237,000 jobs, cost $28 billion in wages, and remove $49 billion in GDP.

“We’re really at a crossroads. On one hand, this analysis makes clear the proposed modifications to these credits would have profound and far-reaching economic consequences for communities across the country. On the other hand, with the right leadership in this pivotal moment, Congress has an opportunity to bet on America’s clean energy future and the communities around the country who will power it.”  said Brad Townsend, Vice President for Policy and Outreach at C2ES. “While these restrictions would undermine our ability to compete globally, drive up costs for businesses and families, and disrupt investments in critical and emerging industries, the reverse is also true. What this analysis really shows is that there’s an incredible opportunity right in front of us, to generate more than a million jobs and add more than $100 billion to American paychecks if we’re willing to believe in our ability to capitalize on the moment.”

Read the full impact analysis: LINK

To speak with a C2ES expert, contact Alec Gerlach at press@c2es.org