Subsidies for clean power would end years earlier in a giant tax and spending bill narrowly passed by the Republican-led House of Representatives early Thursday, driving down shares of solar companies including Sunrun Inc.

It now moves to the Senate, where key Republicans have already balked at some of the House’s plans. Some wanted longer transition times before the latest House bill cut those even further.

The House bill is “worse than feared” for clean energy, analysts at Jeffries said in a research note Thursday. They added, however, that “we don’t expect this to last into Senate draft.”

Shares of Sunrun fell 44% in early trading Thursday. SolarEdge Technologies Inc. sank 17%.

The revised text released Wednesday night marked an extended effort to win over Republican dissidents, including fiscal hardliners who wanted deeper cuts to a series of tax credits created under former President Joe Biden’s signature climate law.

The revisions would include ending technology-neutral clean electricity tax credits for sources like wind and solar starting in 2029 and requiring those projects to commence construction within 60 days of the legislation becoming law. The initial version proposed by House Republicans had a longer phase-out time, allowing many of the credits to exist until 2032.

“They would probably amount to a hard shutdown of the IRA,” said James Lucier, managing director at research group Capital Alpha Partners, referring to Biden’s Inflation Reduction Act. “The initial version of the Ways and Means bill gave investors some hope they could live under the old regime for another couple of years, but now no more.”

The House bill would also hasten more stringent restrictions that would disqualify any project deemed to benefit China from receiving credits. Under the new version, those restrictions, which some analysts have said could render the credits useless for many projects, would kick in next year.

At the same time, the revised bill would restore “transferability” of a nuclear production tax credit, which would allow a project sponsor to sell tax credits to a third party, according to a summary of the changes. It also lengthens the amount of time the credit remains in place by allowing projects that have started construction but aren’t yet operating to be eligible to receive them, the summary said.

The new bill also would keep the tax credits for advanced nuclear projects and expand existing plants if construction starts by the end of 2028. It also would phase out a consumer tax incentive of as much as $7,500 for the purchase of electric vehicles.

The changes would come on top of limitations on the energy credits that were estimated to save $560 billion in cuts in Inflation Reduction Act spending and could cripple the clean energy industry. 

The legislation is the centerpiece of President Donald Trump’s second term agenda. However it faces a delicate path to become law, and may still be altered further. 

Alaska Republican Senator Lisa Murkowski and three colleagues have vowed to defend the credits and called for a “targeted, pragmatic approach.” 

“I am watching right now to see how far the House goes,” Murkowski said in an interview on Tuesday.

President Donald Trump’s signature tax bill narrowly passed the House Thursday morning, advancing a sprawling multitrillion-dollar package that would avert a year-end tax increase at the expense of adding to the U.S. debt burden.

The bill now heads to the Senate, where groups of Republicans are pressing for extensive change. Lawmakers plan to vote on approval by August. The bill includes a $4 trillion increase in the U.S. debt ceiling, which the Treasury Department forecasts could otherwise force a default as soon as August or September, adding urgency to the timeline.

The 215-214 House vote, with one abstention, was met with cheers from Republicans in the chamber. It followed a furious offensive by Trump, who visited the Capitol to rally Republicans, worked lawmakers by phone late into the night and summoned holdouts to the Oval Office. His budget office released a statement branding any GOP lawmaker who failed to support the package guilty of the “ultimate betrayal.”

Trump took a victory lap on his social media platform Truth Social Thursday morning, calling the One Big Beautiful Bill Act the “the most significant piece of Legislation that will ever be signed in the History of our Country!”

“Now, it’s time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE! There is no time to waste,” Trump said.

House Speaker Mike Johnson and his lieutenants went through rounds of negotiations steps from the House floor to balance the demands of lawmakers from high-tax states pressing for an increase in the state and local tax deduction. Hardline conservatives insisted on deeper spending cuts and vulnerable swing-district Republicans were wary of slashing Medicaid.

The measure would avoid a blow to U.S. growth just as the economy struggles with the impact of the steepest tariff increases in almost a century, though it’s expected to add hundreds of billions a year to the deficit.

It would extend Trump’s first-term tax cuts due to expire Dec. 31, along with new tax relief including raising the limit on the deduction for state and local taxes to $40,000 and temporarily exempting tips and overtime pay from taxes.

Cuts to safety-net programs such as food stamps and Medicaid health coverage for the poor and disabled could worsen economic inequality even as wealthy Americans gain the largest share of tax cuts. 

Deficits driven by the tax cuts also risk exacerbating bond investors’ concerns about the ballooning U.S. debt, highlighted by Moody’s decision to downgrade the U.S. government’s credit rating.

Democrats vowed to make House Republicans pay a price in next year’s midterm elections, casting the measure as a Robin Hood-in-reverse effort to take from the poor and give to the rich.

“The GOP tax scam will hurt working families the most while delivering massive tax breaks for billionaires like Elon Musk,” said House Minority Leader Hakeem Jeffries of New York.

Republicans counter that their voters will be energized by enactment of Trump’s top legislative priority for the year and reward them politically. 

Spending cuts

Ultraconservative Freedom Caucus members were able to insert new language in the bill that would dramatically speed up the end of clean energy tax credits passed under the Biden administration, which would generally have to be put into service before 2029 and would have to be well under way within 60 days of the bill’s enactment. The hardliners also were able to move up the start date for new Medicaid work requirements to December 2026 from a 2029 start in the initial version of the package.

The acceleration of new Medicaid work requirements could become an issue in the midterm elections — which fall just one month earlier — with Democrats eager to criticize Republicans for restricting health benefits for low-income households.

Johnson was also able to strike an elusive deal with lawmakers from high-tax states on the state and local tax deduction. The deal would raise the $10,000 cap to $40,000 for individuals and joint filers starting this year, with a phase-out for those making more than $500,000 per year. The cap would increase by 1% a year for 10 years.

Other sweeteners were added for states like Texas, which would be the main beneficiary of $12 billion in reimbursements for state border security expenses incurred in recent years. And GOP leaders eliminated a provision that would have cut federal pensions by basing benefits on the highest five years of salary rather than the highest three, in a move cheered by Republican Representative Mike Turner of Ohio, who called the pension cut “unfair.”

The package also imposes tax increases on targets of Trump’s ire such as Harvard University and immigrants. Private universities with large endowments per student would pay a 21% tax on net investment income, up from the current rate of 1.4%. Immigrants would face a new levy on transfers of money to foreign countries.

The bill would boost military spending by $150 billion and add $175 billion for immigration enforcement, both top Trump priorities. It also includes numerous other provisions affecting health care, energy production and manufacturing, reorienting the government away from climate change concerns in favor of fossil fuels.

That includes the elimination of most EV tax credits, including for market leader Tesla, by the end of 2025, replaced by a tax break for auto loan interest for U.S.-built vehicles, a move championed by Trump and Ohio Senator Bernie Moreno.

Late changes to the bill even included changing the name of new savings accounts for babies born in the next few years, to be seeded with $1,000 from the government. It’s now “Trump” accounts instead of “MAGA” accounts.

Republican senators have said they will press for substantial changes before approving the package.

A number of Senate Republicans want to make permanent tax cuts that are now temporary under the package, especially breaks benefiting businesses. Some GOP senators have warned against any cuts to Medicaid. Others have pushed for far deeper overall spending cuts.

I didn’t want to say this before tax season ended, but my guess is this has to be the best time in all the history of the income tax and the Internal Revenue Service to cheat on your taxes.

(Not that anyone should cheat, of course. They definitely shouldn’t; taxes are the price we pay for living in a civilized society, and all that.)

But think about it: The IRS, already weakened by a decade or more of budget cuts that saw their top talent bleeding away through attrition, has lost a tenth of its workforce in just the past few months, and now that tax season is over, all the fired employees who were held over until April 15 will actually be leaving. Its leadership is in shambles, with five commissioners in as many months, and the confirmation hearings for the man who is supposed to take on the job full-time only happening this week, as well as a number of senior leaders resigning over policy differences with the Trump administration and its Department of Government Efficiency.

(Again, I’m not saying that you should cheat on your taxes — you definitely shouldn’t — but if you wanted to, purely hypothetically speaking, you could hardly pick a better time to do it.)

Audit rates, which were already ridiculously low, can only drop as experienced staff retire or are driven out, leaving no one to train new employees, which is fine because many of those new employees were themselves driven out right at the start of the current purge. Unless you fill out your return in human blood or ask for your refund to be direct-deposited to a numbered Swiss account, the likelihood of your being audited is almost negligible.

(Still, you totally should not cheat on your taxes.)

Now hypothetically, you might be worried that, even though there aren’t enough human staff to come after you, the IRS might be use technology to catch you, but all those staff cuts are hampering the agency’s IT projects too, and much of the money they were supposed to get from the Inflation Reduction Act to help improve their tech has been clawed back, so I wouldn’t worry too much about it.

(Seriously, though, please don’t cheat on your taxes.)

It’s just that it really does seem like a once-in-a-lifetime opportunity to cheat. The one agency that can stop you — also the one that delivers almost all of the government’s revenue — has been hobbled so comprehensively that if you were actually planning to create an environment for tax evasion, you could hardly do better. It’s OK to talk about this now, of course, because tax season is over and it’s not like any of the people on extension would want to cheat, or like anyone would try to cheat on their quarterly estimates or on the payroll taxes their company is supposed to hand over because they thought the IRS was so weak it wouldn’t catch them.

No one would do that, right?