Key Impact Points:
- Treasury Department poised to tighten clean energy tax credit rules, threatening over 2,500 wind and solar projects nationwide.
- New standards could cancel or delay projects equal in capacity to 383 nuclear reactors, driving up utility rates for consumers.
- Republican senators clash with Trump over preserving credits, with confirmation of Treasury nominees now at stake.
Looming Treasury Decision Puts Projects at Risk
A Treasury Department decision expected next week could undermine the financial viability of hundreds of wind and solar projects across the US, part of an intensifying Trump administration push against renewable energy.
President Donald Trump last month ordered the department to raise the spending threshold or require greater construction progress for clean energy projects to qualify for critical tax credits. Current rules allow eligibility if developers spend at least 5% of planned costs by a set deadline.
More than 2,500 announced projects — with a combined generating capacity equal to roughly 383 nuclear reactors — could be affected, according to Atin Jain, energy analyst at BloombergNEF.
Industry Braces for Cancellations
Developers’ ability to proceed or secure financing will depend on how far Treasury officials go in tightening the criteria.
“Projects will get canceled,” said Rhone Resch, CEO of Advanced Energy Advisors. “A lot of projects just aren’t going to be able to adapt to these new deadlines.”
Others may survive but see profits fall. Higher standards for credits could also raise utility rates faster, warned Brian Murphy, Ernst & Young LLP’s Americas Power, Utilities and Renewables Tax Leader, noting that wind and solar are the only sources that can quickly scale to meet demand.
Political Rift Inside the GOP
The move has triggered a behind-the-scenes battle within the Republican party. Several Senate Republicans, including Chuck Grassley of Iowa and John Curtis of Utah, are pressing to preserve the credits as negotiated in Trump’s recent tax law. Grassley has threatened to block confirmation of three Treasury nominees until he’s assured the guidance follows “the law and congressional intent.”
Trump, however, struck a deal with the House Freedom Caucus to curtail the credits using executive authority, despite earlier Senate negotiations for a longer phase-out period.
Under current law, projects deemed under construction by July 4, 2026, have four years to finish and still claim credits; others must be operational by the end of 2027. Trump’s executive order — issued just days after the tax bill passed — directs Treasury to ensure only projects with “a substantial portion” completed by next year’s deadline qualify, aiming to prevent what he calls “artificial acceleration” of developments.
Mike Carr, partner at Boundary Stone Partners, called the upcoming guidance “the main game in town” for the sector.
Treasury Department officials have not commented, while negotiations between Senate Republicans and the administration continue.
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