A bill to amend the Internal Revenue Code of 1986 to extend the clean electricity production credit and the clean electricity investment credit based on increases in the price of, and demand for, electricity, and for other purposes.
- Bill Number
- S. 4175
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-03-24: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-04-09T16:42:28Z
AI-Generated Summary
S. 4175 Summary: Extension of Clean Energy Tax Credits
Purpose
To extend certain clean energy tax credits under the Internal Revenue Code beyond their original phase-out dates when electricity prices rise or demand increases, and to remove restrictions on credits for leased wind and solar facilities. This aims to support clean energy production and investment in response to energy market conditions.
Key Provisions
- Extension Trigger (Sections 45Y and 48E): Defines a "price or demand increase year" as a calendar year where:
- National average electricity price to customers rises more than 2% from the prior year, or
- Total electricity sales (in megawatt-hours) increase from the prior year.
- Data comes from the Energy Information Administration's (EIA) Electric Power Annual report.
- The Treasury Secretary determines this before January 1 of the following year (e.g., 2025 data by Jan 1, 2027).
- Production Credit (Section 45Y): Extends availability to the later of 2032 or 6 years after a price/demand increase year. If triggered during phase-out, resets phase-out to 100% for 6 years, then extends.
- Investment Credit (Section 48E): Similar extension mechanism tied to Section 45Y's definitions.
- Residential Credits:
- Energy Efficient Home Improvement Credit (Section 25C): Renews for 2 years after a price/demand increase determination.
- Residential Clean Energy Credit (Section 25D): Same 2-year renewal.
- Leasing Fix (Section 2): Eliminates rules denying credits for wind and solar facilities under leasing arrangements (removes subsections 45Y(h) and 48E(i)), effective for taxable years after enactment.
Significant Changes to Existing Law
- Replaces fixed phase-out schedules with market-responsive extensions (e.g., removes absolute end dates like paragraph (4) in 45Y(d) and 48E(e)).
- Links residential credits (25C and 25D) to the same price/demand triggers for temporary revival.
- Fully removes credit denials for leased wind/solar projects, broadening eligibility.
Potential Impacts
- Government Agencies: Treasury/IRS must monitor EIA reports and issue timely determinations, potentially increasing administrative workload and federal tax revenue losses (higher credits claimed).
- Citizens: Homeowners and businesses gain extended/reinstated tax credits for clean energy installs during high-price/demand periods, lowering costs for solar panels, efficient appliances, etc.
- Energy Sector: Boosts clean electricity production/investment when demand spikes (e.g., from electrification or heat waves), possibly stabilizing prices long-term.
- No direct international relations impact noted.
Main Stakeholders Affected
- Clean energy developers/producers: Benefit from extended production (45Y) and investment (48E) credits.
- Homeowners and residents: Access renewed residential credits (25C, 25D) for home upgrades.
- Wind/solar leasing companies: No longer denied credits, enabling more financing models.
- Utilities and consumers: Indirectly affected via potential increases in clean energy supply amid rising demand/prices.
- Taxpayers broadly: May see higher federal spending on subsidies.
Notable Legal, Constitutional, or Political Implications
- Legal: Introduces data-driven (EIA reports) administrative discretion for Treasury Secretary, with clear timelines to avoid disputes; amendments are targeted and self-contained within tax code.
- Constitutional: No apparent issues; standard congressional authority over tax policy.
- Political: Makes green energy incentives adaptive to market signals (price/demand), potentially bipartisan appeal in energy crises, but could extend subsidies indefinitely if triggers recur frequently. Introduced March 24, 2026, by Sen. Wyden (D-OR); referred to Senate Finance Committee.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-03-24: Read twice and referred to the Committee on Finance.
- 2026-03-24: Introduced in Senate
Bill Versions
- To amend the Internal Revenue Code of 1986 to extend the clean electricity production credit and the clean electricity investment credit based on increases in the price of, and demand for, electricity, and for other purposes. — issued 2026-03-24 — PDF (7 pages)