Trump Abolishes Period of Untrustworthy Renewable Energy - Grants for Wind and Solar Eliminated
In a significant policy shift, President Donald Trump's executive order, issued on July 7, 2025, and the related legislation known as the One Big Beautiful Bill Act (OBBB), have initiated a phased elimination of federal tax credits for new clean energy projects, particularly wind and solar energy. This move represents a stark contrast to the prior support these industries received under the 2022 Inflation Reduction Act (IRA).
The OBBB enacts a phased elimination of tax credits for new wind and solar projects, affecting their future in the US. Existing projects and those that began construction before the Act’s enactment date generally remain unaffected, but uncertainty exists about potential retroactive changes due to new Treasury guidance mandated by the executive order.
The executive order directs the Treasury Department to issue new and revised guidance on eligibility rules for wind and solar facilities. This includes preventing artificial acceleration of project construction to claim credits and tightening the criteria for qualifying projects. The Treasury has 45 days to deliver this guidance.
The Trump administration labels wind and solar as "unreliable, expensive," and heavily dependent on foreign supply chains, which it claims threaten national security and grid stability. It aims to roll back the "unfair advantages" these renewables have had and eliminate subsidies perceived to harm reliable energy sources.
The policy emphasizes a return to fossil fuels (coal, natural gas) and nuclear power, deemed reliable and dispatchable. This shift implies renewed government support will favor these fuels rather than renewables.
The OBBB also ends the 30% residential solar tax credit by the end of 2025, creating urgency but uncertainty in the residential solar market.
The Interior Department must revise current policies that have favored renewables, such as streamlined permitting and lease arrangements, aiming to reduce government facilitation of renewables.
The order freezes new permits and approvals for wind energy projects, including offshore developments. If federal benefits for renewable energy are removed, it could significantly slow the pace of new solar developments.
States with ambitious climate targets may need to reevaluate their clean energy goals and consider alternative funding methods to stay on track. The order labels renewable energy sources as unreliable, expensive, and overly dependent on foreign supply chains, which could force states with ambitious climate targets, such as New York and New Jersey, to revise their energy roadmaps due to the shift in federal policy.
Developers who had planned on receiving federal tax credits now face stricter deadlines and higher costs. The National Energy Dominance Council, established as part of Trump's plan, will focus on increasing fossil fuel production, attracting private investment, and accelerating domestic energy production.
Critics warn that this approach overlooks the long-term risks of continued reliance on fossil fuels, especially in a world already experiencing the impact of climate change. The new executive order could cause major uncertainty across the wind and solar industries, potentially leading to delays or cancellations of projects currently in the pipeline.
The order marks a major reversal from the direction set by the 2022 Inflation Reduction Act, which offered strong incentives for clean energy projects. The new law only allows developers to claim tax benefits for wind and solar projects if construction begins before the end of 2026 and is completed by the end of 2027.
The U.S. solar industry installed 10.8 gigawatts (GWdc) of new capacity in Q1 2025, a 7% drop compared to Q1 2024 and a 43% decrease from Q4 2024. The Treasury Department is required to end tax credits for wind and solar production.
If the US steps back from clean energy leadership, it could fall behind in both technology development and global market share. The IEA's World Energy Investment 2025 report projects that global energy investment will reach $3.3 trillion in 2025, with approximately $2.2 trillion going toward clean energy sources.
Over 131,000 Americans are employed in wind energy-related jobs. Wind energy plays a vital role in the US electricity mix, contributing about 10% of the nation's power. As the implications of this policy change unfold, it is crucial to monitor how the Treasury and Interior Departments implement these directives, as further clarifications or restrictions could amplify or moderate these impacts.
- The policy shift initiated by President Trump's executive order and the One Big Beautiful Bill Act (OBBB) has led to a phased elimination of federal tax credits for new clean energy projects, impacting the future of the renewables industry in the US.
- The OBBB enacts a phased elimination of tax credits for new wind and solar projects, affecting their future in the US, while existing projects and those that began construction before the Act’s enactment date generally remain unaffected.
- The executive order directs the Treasury Department to issue new and revised guidance on eligibility rules for wind and solar facilities, aiming to prevent artificial acceleration of project construction to claim credits and tighten the criteria for qualifying projects.
- The Treasury Department is required to end tax credits for wind and solar production, which could lead to significant delays or cancellations of projects currently in the pipeline, potentially causing major uncertainty across the wind and solar industries.
- In a shift towards traditional energy sources, the policy emphasizes a return to fossil fuels (coal, natural gas) and nuclear power, deemed reliable and dispatchable, and aims to eliminate subsidies perceived to harm renewable energy sources, affecting both the environmental-science and finance sectors of the energy and business industries.
