A megabill mystery: Republicans ax solar and wind tax that surprised senators

WASHINGTON — Tucked inside the massive domestic policy bill that Senate Republicans released over the weekend was an excise tax for wind and solar projects. The provision came as a surprise not just to the renewable energy industry, but also to numerous senators crafting the legislation.

In a twist, Republican senators insist they didn't know how or why the tax was inserted into the bill they were rushing to pass. No senator took credit for — or defended — it.

Sen. Lindsey Graham, R-S.C., the Budget Committee chairman, who released the 940-page bill, said he was unsure where that provision came from.

"It's a secret, I guess," Graham told NBC News on Monday evening. "I don't know where it came from."

Moments before the final vote Tuesday to pass the multitrillion-dollar package, Republicans released a substitute bill that axed the provision after blowback from within their ranks, capping an unusual episode of legislating on Capitol Hill.

Sen. Lisa Murkowski, R-Alaska, was baffled by its initial inclusion, saying the excise tax "just came about" like it was "airdropped" into the bill before a vote Saturday to advance the legislation.

"It wasn’t part of any consideration," she said. "It’s like, surprise! It’s Saturday night. And we looked at it like, where did this come from?"

"My view of it is — it’s just entirely punitive to the wind and solar industry," Murkowski said, adding that the Republican-controlled Senate was "looking at different options" to deal with it.

The provision would have taxed wind and solar projects if a certain share of their components come from China. It is ambiguously worded, and it would empower the Trump administration to iron out the rule.

Sen. Cynthia Lummis, R-Wyo., said she was "OK with that" when she was asked about the details of the provision. But she, too, was in the dark about who inserted it.

"You can add me to the group that doesn't know the answer," Lummis said.

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Tesla CEO Elon Musk, the former Trump adviser, torched the legislation, saying it would "destroy millions of jobs in America."

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"Utterly insane and destructive," Musk said of the bill. "It gives handouts to industries of the past while severely damaging industries of the future." He added, "A massive strategic error is being made right now to damage solar/battery that will leave America extremely vulnerable in the future."

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Spokespeople for the Republican chairs of the Finance Committee (Mike Crapo of Idaho), the Energy and Natural Resources Committee (Mike Lee of Utah) and the Environment and Public Works Committee (Shelley Moore Capito of West Virginia) didn't respond to requests for comment when they were asked whether the senators had championed the provision.

The White House and Republican leaders tout the broader bill as fulfilling President Donald Trump's promise to boost energy production in the United States, including fossil fuels. Trump also vowed to unravel clean energy incentives Democrats passed in the Biden administration.

Democrats had blasted the excise tax — among other energy policies in the GOP bill — as an attempt to reward fossil fuel companies while further discouraging clean energy production.

Industry groups also tore into the new excise tax.

“With no warning, the Senate has proposed new language that would increase taxes on domestic energy production," said Jason Grumet, the CEO of the American Clean Power Association.

“In what can only be described as ‘midnight dumping,’ the Senate has proposed a punitive tax hike targeting the fastest-growing sectors of our energy industry," he said in a statement. "It is astounding that the Senate would intentionally raise prices on consumers rather than encouraging economic growth and addressing the affordability crisis facing American households."

Neil Bradley, executive vice president of the U.S. Chamber of Commerce, praised the overall bill but criticized that provision, writing on X that "taxing energy production is never good policy, whether oil & gas or, in this case, renewables."

"Electricity demand is set to see enormous growth & this tax will increase prices," he said. "It should be removed."