What Just Happened? The Narrow Victory That Changes Everything
The House on Thursday morning narrowly passed a massive domestic policy package, a major victory for President Donald Trump and Speaker Mike Johnson, R-La., after weeks of heated intraparty negotiations and some last-minute changes. Following hours of overnight debate, the vote on final passage in the House was 215-214, with two Republicans — Reps. Thomas Massie of Kentucky and Warren Davidson of Ohio — joining all Democrats present in opposition.
This incredibly close vote shows just how divided Republicans were on this huge tax package. Trump called it his "big, beautiful bill," but getting it through the House was anything but easy.
Clean Energy Tax Credits Take a Major Hit
Here's where things get really interesting for anyone thinking about going solar or buying an electric car. House Republicans gutted energy savings and clean energy tax credits in President Donald Trump's "big, beautiful" tax bill — taking aim at funds that are creating thousands of jobs in GOP states and saving homeowners money on their bills.
The changes are pretty dramatic. The House Ways and Means Committee introduced a measure that would weaken or remove several parts of the IRA, including a full removal of the 30% solar tax credit for homeowner-owned solar and battery systems at the end of 2025. That means if you're thinking about installing solar panels, you better act fast.
Electric car buyers are also facing tough news. The bill would end tax credits that helped lower the cost of electric vehicles, energy efficient appliances, rooftop solar and insulation. The $7,500 electric vehicle tax credit that many people rely on when buying a new EV would disappear much sooner than originally planned.
The Job Impact Nobody Saw Coming
What makes this really interesting is where these job losses will happen. The bill could cost the US more than 830,000 jobs that would otherwise be created in the coming years, the think tank Energy Innovation found. The impacted jobs are mostly in construction and manufacturing, building factories and components for EVs, wind turbines, solar panels, batteries and other clean energy products — the vast majority of which are in GOP states and districts.
That's right - Republican states and districts would lose the most jobs from this Republican tax bill. It's one of those weird political situations where lawmakers might be hurting their own voters without realizing it.
SALT Deduction Gets a Big Boost
Now here's the part that will make homeowners in high-tax states really happy. The House GOP's legislation, initially released May 12, which has since been amended and passed the House on May 22, would raise the SALT deduction cap to $40,000 per household earning up to $500,000. For incomes above that limit, the deduction cap would remain at $10,000.
This is a huge change from the current $10,000 limit. If you live in states like New York, New Jersey, or California where property taxes and state income taxes are really high, this could save you thousands of dollars on your federal tax bill.
The SALT cap and income phaseout would increase annually by 1% from 2026 through 2033, according to the text. So it gets even better over time, at least for people who qualify.
Who Really Benefits From These Changes?
Let's be honest about who wins and loses here. Any changes to lift the cap would primarily benefit higher earners. With an income phaseout over $400,000, the top 20% of taxpayers "would be the only group to meaningfully benefit," Watson wrote.
The clean energy credit cuts, on the other hand, affect everyone who wanted to install solar panels or buy an electric car. These were programs that helped middle-class families afford cleaner technology.
What Happens Next?
The bill now heads to the Senate, where things could change significantly. The multitrillion-dollar tax cut and spending measure now heads to the Senate, where Republicans have vowed to change it. Senate Republicans might have different ideas about some of these provisions.
It will add about $3.8 trillion to the federal government's $36.2 trillion in debt over the next decade, according to the nonpartisan Congressional Budget Office. That's a lot of money, and fiscal conservatives in the Senate might want to scale things back.
The Stock Market Reaction Says It All
The market immediately understood what was happening. Shares of U.S. solar companies fell sharply on Thursday after the House of Representatives advanced President Donald Trump's sweeping tax and spending bill, which may end numerous green-energy subsidies that have supported the renewable energy sector.
Sunrun led the market rout, with shares falling nearly 41% in early morning trade, SolarEdge Technologies slid nearly 26%, Enphase Energy was down 17.7% and Complete Solaria fell over 15%. These companies know their business model just got a lot harder.
The Bottom Line for Regular People
If you're a homeowner in a high-tax state making less than $500,000, the SALT deduction increase could save you money. If you were planning to go solar or buy an electric car, you need to move fast before those credits disappear.
The bigger picture is that this bill represents a major shift away from green energy incentives and toward traditional tax cuts for higher earners. Whether that's good or bad depends on your perspective and your tax situation.
For now, the ball is in the Senate's court. They could make significant changes before sending anything to Trump's desk for his signature.