US Senate plan threatens wind and solar

Today's newsletter looks at the US Senate's latest version of President Donald Trump's spending package, which would create a shorter phase out for wind and solar tax credits. You can read and share this story on Bloomberg.com.

Also, read more about the Northern Hemisphere's unusually hot June and why every day has become a heat wave on the London Underground. For unlimited access to climate and energy news, please subscribe.

US Senate mulls bill killing tax credits

By Ari Natter and Will Wade

Key tax incentives for US wind and solar projects would face a more aggressive phase-out in the Senate's latest version of President Donald Trump's spending package released late on Friday.

The tweak, which follows pushback by Trump on the Inflation Reduction Act credits, would sharply limit the number of solar and wind farms that qualify for incentives, appeasing opponents while risking the ire of moderate members who argued for a slower phase-out.

Shares of renewable energy companies tumbled on Monday morning, while coal miners surged on the news. NextEra Energy Inc., the Florida-based utility owner that's the biggest US developer of wind and solar projects, slumped 4.8% before the start of regular trading in New York. Enphase Energy Inc., a solar-component supplier, slipped 2.8%, while the US coal giant Peabody Energy Corp. gained 2.3%.

Under the new version of the $4.2 trillion tax and spending package, wind and solar projects would need to be up and running by the end of 2027 to receive a pair of lucrative incentives for clean energy production.

The initial version released by the Senate's tax-writing committee simply required projects to start construction by the end of 2025 to get the incentives' full value.

"This is a huge problem for wind and solar developers, who thought they would have at least four years to finish projects that started in 2025," said James Lucier, managing director at research group Capital Alpha Partners.

Photographer: Rebecca Noble/Bloomberg

If it becomes law, the change could be a blow to companies such as NextEra Energy, which has an inventory of projects that qualified as starting construction in 2025, Lucier said.

The legislation also adds a new tax on wind and solar projects that don't meet strict restrictions against the use of Chinese materials, as well as adds the production of coal used in steel making to an existing tax credit for clean energy technology such as wind turbines and solar panels.

A residential energy credit that has benefitted solar-leasing companies such as Sunrun Inc., would expire at the end of 2025 in the current legislation. But it restores access to a separate investment tax credit until the end of 2027 that an earlier version of the bill removed, Charlotte Jenkins, a vice president at research firm Capstone LLC, said in an email. Still, the tweak wasn't enough to stop the solar industry from slamming the bill.

"Any senator who votes for this bill is voting for higher energy prices, a weaker economy, and a less secure America," the Solar Energy Industries Association said in a statement. "And they'll have to answer for it when families open their utility bills, when workers lose their paychecks, and when voters head to the polls."

The bill does include a longer phase-out of a tax credit for hydrogen production used by companies such as Plug Power Inc. While the initial version of the legislation ended the credit after this year, the new version allows it to remain until 2028.

Other tweaks made in the new version of the bill includes a quicker end to a popular $7,500 consumer tax credit for electric vehicles.

While the earlier proposal would have ended the incentive at the end of this year for most EV sales, the new version terminates the credit after September 30, 2025. Tax credits for the purchase of used and commercial electric vehicles would end at the same time.

The tweaks reflect House Republican resistance to the more generous timetables. House Majority Leader Steve Scalise said Thursday the House will need to reverse the Senate's move to extend a slew of clean energy tax credits.

"We had a lot of back and forth over getting that language right to keep it tight," Scalise said. Trump "is where we are, if not more aggressive, in getting rid of it," he said.

Read and share this story on Bloomberg.com.

A Trump slump

14%

This is how much the US pipeline for utility-scale battery storage projects in 2026 has declined since President Donald Trump's inauguration, according to Allison Weis, Wood Mackenzie's global head of energy storage, power and renewables.

Bad timing

"Why are we having this conversation right now when we are looking at energy shortage? Why are we doing anything to reduce the ability to bring on generation? We should be talking about permitting reform and how we bring things forward. We're trying to reduce energy at a time of energy demand."

David Carroll

Senior vice president for Engie North America

The head of Engie's North American business said last week the French energy company is on track to invest less than half its usual $2 billion to $3 billion in the US this year, as uncertainty over tariffs and tax incentives chills spending on renewable power.

Where every day is a heat wave

By Joe Wertz

For London commuters squished into cramped carriages, with faces against sweaty armpits, every day is a heat wave, and every heat wave is an inferno.

Unusually hot weather is making it almost unbearable to travel on the UK capital's underground train network. As pedestrians bake in 30C heat at street level, seeking shade among the wilting roadside trees, temperatures inside some tube carriages can be nearly 5C hotter.

It's a situation that can sap a city's economy and threaten the health of passengers, and it's getting more unbearable with each passing summer due to climate change.

It's not easy to find data on how hot it is below ground. Transport for London, or TfL, "periodically" measures platform temperatures, but doesn't monitor them in real-time or record the level of heat in train carriages.

Bloomberg News is creating a London Tube Heat Index, gathering data on the Central Line at the same time every day using an Aranet4 sensor, about the size of a drinks coaster, that logs temperature and humidity at one-minute intervals.

Data recorded during a heat wave earlier this month showed carriages on the central line — one of the oldest and deepest in the network at 20 meters (65.617 feet) below surface level — were consistently 3C higher than street level during a commute from Bank station, in the city's financial district, to Bond Street station, next to luxurious Mayfair, according to measurements taken by Bloomberg. Even on more typical summer days, temperatures were at least 1.5C hotter.

Put another way, using the official definition of a heat wave for London of three consecutive days of 28C maximum temperatures, London's commuters are enduring worse-than-heat-wave conditions constantly. Read the full story on why there are no easy fixes to the problem.

The Central Line is one of the oldest and deepest in the London Underground network. Photographer: Jose Sarmento Matos/Bloomberg

Weather watch

By Joe Wertz, Mary Hui, Lauren Rosenthal and Brian K Sullivan

The heat wave searing western Europe is set to peak in the coming days, threatening power networks and triggering health alerts.

A high-pressure system combined with a stream of super-hot air from North Africa and abnormally warm oceans is baking the region from Portugal to the UK. On Sunday, Spain set a June heat record of 46C (114.8F) near El Granado in the south of the country, according to preliminary data from forecaster AEMET.

Amber health alerts have been issued for large parts of England, including London, where temperatures could reach 34C on Tuesday, according to the UK Met Office. Heat warnings are also in place for much of France, with peaks above 40C through Wednesday.

Pedestrians try to escape the heat at the Great Pond of El Retiro park in Madrid, Spain, on June 26. Photographer: Michael Robinson Chavez/Bloomberg

China's weather bureau forecasts a sizzling start to July, with temperatures nearly 3°C above historical averages. Swathes of eastern China, which includes Shanghai, will see temperatures around 35C to 39C (95F to 102F), with some places touching 40C.

Tropical storms have spun up on both sides of Mexico. The biggest threat is flooding from Tropical Storm Barry on the east coast. In the Pacific, Tropical Storm Flossie is expected to strengthen into a hurricane as it moves northwest.

The US Navy and NOAA will no longer accept and distribute readings from the long-running Defense Meteorological Satellite Program after June 30, according to a service notice. Forecasters will as a result lose a key tool for predicting rapid hurricane intensification, when a storm's top wind speeds increase by at least 35 miles per hour (56 kilometers) in 24 hours. In recent years, many storms have undergone rapid intensification, notably last year's Hurricane Milton.

More from Green

The Los Angeles wildfires have generated potentially thousands of new clients for lawyers and prospects for billions in fees. Wall Street wants in on the action, too.

The chance at a piece of strong returns has encouraged investment banks, hedge funds and debt investors to vie for contracts to fund the litigation, according to people involved in transactions. That's in addition to firms solely dedicated to funding lawsuits, which has grown into a $16 billion industry in the US over two decades.

Suits over wildfire damages could be worth tens of billions of dollars in claims, but they are also expensive to bring. For lawyers taking on high-stakes complex cases, especially at smaller firms that don't have deep reserves of capital, the loans help cover an array of overhead, from client marketing to expert witnesses.

"There's no question Wall Street has gotten very interested in this segment of the market over the years," said Samir Parikh, a law professor at Wake Forest University who has studied litigation finance. "It's grown into a multibillion-dollar business, but it's not a very transparent market."

Read the full story on Bloomberg.com.

A firefighter hoses down a burning house during the Eaton Fire in Altadena, California, in January. Photographer: Michael Nigro/Bloomberg

Worth a listen

Climate tech is not the hot investor thesis it once was a couple of years ago. After several record breaking years, and billions of dollars being poured into climate startups, venture capital investments are way down. This week on Zero, Akshat Rathi speaks with Mike Schroepfer, who runs Gigascale Capital, a venture firm focusing on climate investments, and used to be Meta's chief technology officer. Schroepfer shares his views on the current investment climate, the danger of funding cuts to US research, and why demand for AI will prompt a new wave of energy innovation. Listen now, and subscribe on Apple, Spotify, or YouTube to get new episodes of Zero every Thursday.