The Energy Freedom Act eliminates the majority of existing federal tax credits and deductions for energy efficiency, clean energy production, and related manufacturing, with most changes taking effect after December 31, 2025.
Josh Brecheen
Representative
OK-2
The Energy Freedom Act is a comprehensive bill focused almost entirely on repealing numerous existing tax credits and deductions related to energy efficiency, clean energy production, and alternative fuels. This legislation systematically eliminates incentives such as those for residential solar, clean vehicle purchases, advanced manufacturing, and carbon sequestration. With only one minor exception, the bill's primary effect is to remove these specific energy-related tax breaks from the Internal Revenue Code, generally taking effect for tax years beginning after December 31, 2025.
Energy Freedom Act Systematically Repeals Nearly All Clean Energy Tax Credits After 2025
The aptly named Energy Freedom Act is less about adding new options and much more about hitting the delete button on nearly every federal tax incentive currently promoting clean energy and efficiency. If you’ve been counting on tax breaks for solar panels, buying an EV, or making your home more energy efficient, this bill is the official notice that those incentives are heading for the exit ramp after December 31, 2025.
The Great Clean Energy Tax Credit Purge
This legislation systematically targets and repeals over 20 separate sections of the Internal Revenue Code (IRC) that support energy transition. Think of it as a comprehensive tax code cleanse, but focused almost entirely on removing financial incentives. For instance, Section 3 repeals the Residential Clean Energy Credit (IRC Section 25D), which is the credit people use for installing solar panels on their homes. Similarly, Section 2 eliminates the credit for general energy-efficient home improvements (IRC Section 25C). If you’re a homeowner planning a major efficiency upgrade or looking to go solar, your window to claim a federal tax break shrinks significantly to anything installed and in service before the end of 2025.
The End of the EV Handshake
For consumers, the biggest change hits the transportation sector. Section 6 repeals the popular Clean Vehicle Credit (IRC Section 30D), which is the incentive for buying new electric vehicles. Not stopping there, Section 4 takes out the credit for previously-owned (used) clean vehicles (IRC Section 25E). This means that after 2025, the federal government will no longer be subsidizing the purchase of EVs, new or used. For the average buyer, this translates directly into a higher sticker price, potentially slowing the adoption rate of these vehicles, particularly for those who rely on the credit to make the math work.
Hitting Producers and Manufacturers
The impact isn't just on consumers; it’s a massive shift for industry. The bill scraps nearly every major production incentive for clean energy, which could dramatically change the economics of these sectors. For example, Section 10 repeals the credit for electricity produced from renewable resources (IRC Section 45), and Section 13 eliminates the credit for zero-emission nuclear power production (IRC Section 45U). If you’re a producer of clean hydrogen, that credit is gone too (Section 14). For manufacturers, Section 16 eliminates the Advanced Manufacturing Production Credit (IRC Section 45X), which was designed to bring clean energy component manufacturing back to the U.S. This comprehensive removal of production incentives is likely to raise the cost of clean energy generation and manufacturing across the board.
Infrastructure and Commercial Buildings Get the Axe
Even businesses and infrastructure developers aren't spared. Section 5 repeals the tax credit for installing alternative fuel vehicle refueling property (IRC Section 30C)—think EV charging stations or hydrogen pumps. This makes it more expensive to build out the infrastructure needed to support the vehicles that are already on the road. Furthermore, Section 22 wipes out the deduction for energy-efficient commercial buildings (IRC Section 179D). For real estate developers or small business owners looking to reduce their operating costs through efficiency upgrades, that incentive is off the table after 2025.
The Bottom Line: What This Means on Your Budget
This bill is highly effective at one thing: removing government subsidies from the clean energy market. While proponents might argue this simplifies the tax code and reduces federal spending, the practical reality for busy people is that it makes the cost of going green significantly higher. If you're a builder, your energy-efficient projects lose a valuable tax break. If you’re a consumer, your next car or home solar installation will cost thousands more out of pocket than it would under current law. The bill is clear, and the impact is straightforward: After 2025, the financial push to adopt clean energy technologies is largely over.