Trump administration to unveil tougher solar and wind subsidy rules

AI generated summary

The Trump administration is poised to implement stricter rules regarding federal tax subsidies for wind and solar energy, potentially hindering the growth of renewable energy in the U.S. The Treasury Department is expected to revise the criteria for qualifying for clean energy tax credits, as mandated by President Trump in July. The new regulations will redefine what constitutes a project as 'under construction,' which is crucial for companies that require extensive planning to build facilities. The One Big Beautiful Bill Act (OBBBA) stipulates that projects must commence construction by July of next year or be operational by the end of 2027 to qualify for a 30% tax credit, a significant reduction from previous laws that allowed credits through 2032.

In an executive order, Trump directed the Treasury to limit the use of safe harbors that have historically enabled project owners to claim tax credits after incurring a small percentage of costs. Analysts predict that the Treasury may raise the required percentage of costs incurred, potentially leading to a loss of about 60 gigawatts of planned solar capacity by 2030, enough to power around 10 million homes. This uncertainty has already caused some companies to delay projects while others are hastening their efforts to secure subsidies, indicating a significant impact on the renewable energy sector.