Since its passage in 2022, the Inflation Reduction Act (IRA) has been instrumental in advancing clean energy initiatives across the United States. However, shifting political dynamics and early action on energy policy by the second Trump Administration raise questions about the stability of its provisions, particularly the tax credits aimed at fostering a clean energy economy. 

Will the Inflation Reduction Act (IRA) be repealed?

A full repeal of the IRA is extremely unlikely. Many of the business-facing tax credits designed to grow the clean energy economy—including the 45Q tax credit for carbon sequestration and the 45V tax credit for clean hydrogen—have strong bipartisan support, including among key congressional Republicans. In August 2023, a group of 18 House Republicans sent a letter to Speaker Mike Johnson advocating for preserving clean energy tax credits from the IRA. This support reflects the economic benefits these credits bring to their districts, including significant investments and job creation. Of those 18 lawmakers, 14 returned to the House in January 2025 and one is now a Senator from Utah. 

However, several consumer-facing clean energy incentives—such as EV tax credits and the 25C credit for energy-efficient home improvements like heat pumps—do not appear to benefit from the same bipartisan support. Under the new administration and Congress, these credits may face cuts or repeal unless producers and individual buyers push for their retention.

Could GOP divisions in Congress affect action on the IRA?

The Republican Party’s slim House majority may complicate any effort to roll back or adjust the IRA. The GOP holds a three-seat majority—the smallest for either party since 1931. The already narrow majority post-election was made narrower as a result of President Trump appointing members of the House to his administration.

Special elections in Florida will be held on April 1st to replace Reps. Matt Gaetz and Mike Waltz, but a New York election for Rep. Elise Stefanik’s seat may not happen until May or later. Until then, Republican leadership has little room for error when advancing the new administration’s agenda.

While Republicans hold more comfortable margins in the Senate (53 out of 100 seats), the norms and rules of the body, namely the filibuster, may serve as a safeguard against radical action. Given the filibuster’s constraints, which generally require 60 votes for most legislative actions, the budget reconciliation process–which only requires 51 votes for passage–will be necessary for significant changes to law. That said, reconciliation comes with its own drawbacks and challenges involving statutory procedure and arcane legislative precedent. Ensuring the small majorities in the House and Senate are on the same page for reconciliation or other legislative action is no easy task.

Can President Trump unilaterally roll back IRA funding?

While the Trump Administration can attempt to disrupt IRA implementation, it cannot fully halt progress without Congress.

The IRA invested in the clean energy sector via three major avenues: tax incentives, direct spending (including grants), and loans. Of the three, tax incentives represent the largest investment by far. When the IRA was passed, of the $392 billion allocated for clean energy, $271 billion was the estimate for the clean energy tax credits through 2031. However, since the tax credits were not capped (with the exception of the Sec. 48C Advanced Energy Project Credit, which is capped at $10 billion), the true cost depends on how many businesses claim the credit. An update from The University of Pennsylvania's Wharton School estimates that the uptake in clean energy investments and the associated claiming of tax incentive could mean the cost of the IRA is over $1 trillion; the associated climate benefits will also be commensurately greater. 

Ultimately, there is little the Trump Administration can do to prevent the provision of these tax credits. While it could make some difference at the margins by reissuing regulatory guidance for certain tax credits in the hope of narrowing how many firms and households qualify, this would require a lengthy notice and comment period. There is only so much that the Administration can change given the constraints of the law.

Likewise, the Trump Administration’s attempts to block the direct spending and loan programs from the IRA via executive action have run into the Impoundment Control Act (ICA) of 1974. This law clarifies the Constitutional mandate that the executive branch must spend funds appropriated by Congress. Attempts in the earliest days of the Administration to freeze funding, as well as the subsequent clarifying memos, lawsuits, and court action, all reflect the Administration’s desire to push the boundaries of executive authority. Still, courts play an important role in curtailing efforts to circumnavigate Congress, as evidenced by a federal judge immediately placing an administrative stay on the Trump Administration’s moves to freeze certain funding pending further litigation on the matter. 

No doubt, the legal challenges will likely continue as the Trump Administration tries other avenues to influence the disbursement of federal funding. However, the law clearly states that the president does not have the authority to pause congressionally mandated spending, making it likely that the courts will rule against such further actions.

Could the Administration impact other clean energy programs?

While the producer-oriented IRA tax credits are unlikely to be repealed and the executive branch is bound by law to carry out spending as directed by Congress, the timely transition to a clean economy still faces many risks. 

On President Trump’s first day in office, he signed an executive order to stop all permits for wind energy projects, which came as a surprise to some. The wind industry is not only crucial for meeting the country’s climate goals, but employs tens of thousands of technicians across rural, mostly Republican, communities across the United States. Similar actions to impede the clean energy transition via permitting and other restrictions are possible.

Even without a full unraveling of the IRA, delays in administering funding from the IRA and the Bipartisan Infrastructure Law could significantly affect the clean technology sector. The US federal government is the largest purchaser of goods and services globally and a primary funder of new clean energy technologies. The IRA’s historic investments in clean energy are already yielding economic benefits, including job creation and lower energy costs. If the disbursement of funding from these landmark bills is slowed, the industry’s growth could be set back by years or even decades. 

How can clean tech developers navigate policy uncertainty?

While federal policies fluctuate based on the administration in power, states, cities, and international markets are pushing forward with sustainability requirements. Forward-thinking green technology developers and buyers should maintain a long-term perspective. These projects require years of planning and development. Even amid political uncertainty, those who continue to invest will be well-positioned when market and political conditions inevitably favor clean energy again. The transition to a green economy is unstoppable even in the face of periodic headwinds.