Congress moves to strip clean energy tax credits, raising costs for households and businesses
S. 1721 — Energy Freedom Act · Filed by Mike Lee (R-UT) · Introduced May 13, 2025 · Referred to committee
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What it does
This bill repeals nearly all federal tax credits and incentives for clean energy, electric vehicles, renewable fuels, energy efficiency, and related technologies enacted in recent years—including credits for solar/wind installations, EV purchases, home weatherization, sustainable aviation fuel, and nuclear power. It also repeals the federal petroleum tax. Effective January 1, 2026, these repeals eliminate tax benefits that currently reduce the cost of transitioning to clean energy for households, businesses, and manufacturers.
Why we flagged it
The bill's sole functional purpose is to eliminate federal tax incentives for clean energy, electric vehicles, and renewable fuels. Despite the title 'Energy Freedom Act,' the mechanism is straightforward repeal of existing tax code sections, not a positive grant of freedom or deregulation.
What the text implies
- Repeal of the petroleum tax (Section 23) removes a revenue source and eliminates price signals that discourage fossil fuel consumption, potentially increasing demand for oil and gas.
- Loss of EV purchase credits may slow EV adoption rates, extending the timeline for vehicle fleet electrification and delaying emissions reductions in transportation.
The full analysis lists 5 implications of this text.
Who stands to gain
fossil fuel producers and refiners; oil and gas extraction companies; conventional power utilities