Lowering Electric Bills Act
Summary
The "Lowering Electric Bills Act" (S. 2681) aims to amend the Internal Revenue Code of 1986 by extending certain clean energy tax credits. Specifically, it extends the residential clean energy credit under Section 25D(h) to December 31, 2034, and modifies the clean electricity production credit under Section 45Y. The bill also adjusts the clean electricity investment credit under Section 48E.
These changes are designed to promote clean energy adoption by providing continued financial incentives. The amendments are retroactive, taking effect as if included in the enactment of Public Law 119-21.
The bill was introduced in the Senate on August 2, 2025, and referred to the Committee on Finance.
Expected Effects
The act will likely incentivize investment in residential clean energy systems through the extension of tax credits. It will also modify the criteria for clean electricity production and investment credits, potentially affecting the development and deployment of clean energy technologies. The changes aim to reduce greenhouse gas emissions from electricity production.
By extending the availability of clean energy credits, the act seeks to make clean energy more accessible and affordable for homeowners and businesses. This could lead to increased adoption of renewable energy sources and a reduction in reliance on fossil fuels.
Potential Benefits
- Encourages investment in residential clean energy, potentially lowering electricity bills for homeowners.
- Promotes the development and deployment of clean energy technologies through extended and modified tax credits.
- Aims to reduce greenhouse gas emissions from electricity production, contributing to climate change mitigation.
- Could create jobs in the clean energy sector.
- May improve air quality by reducing reliance on fossil fuels.
Potential Disadvantages
- Extending tax credits could increase the national debt if not offset by other revenue sources or spending cuts.
- The effectiveness of the credits in achieving emissions reduction goals depends on various factors, including technology costs and consumer behavior.
- Changes to the clean electricity production credit criteria could create uncertainty for investors.
- The retroactive effective date could create administrative complexities.
- Potential for unintended consequences or loopholes that could be exploited.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), which allows Congress to promote the well-being of the nation through legislation. Article I, Section 8, Clause 1 grants Congress the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.
Extending tax credits for clean energy falls under Congress's power to tax and spend for the general welfare. There are no apparent infringements on individual rights or liberties as defined in the Bill of Rights.
However, the specific details of how the tax credits are implemented and their potential impact on different states or regions could raise questions about equal protection or interstate commerce, though these are not evident from the bill itself.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).