President Trump has forced a change to the latest draft of the One Big Beautiful Bill that promises a new tax on renewable energy developers, while also phasing out wind and solar tax credits quicker.
“Give me liberty or give me death.”
US founding father Patrick Henry made this famous statement during a speech in 1775 as an impassioned call to arms against British rule during the American Revolution. This is the spirit Americans continue to celebrate to this day following the adoption of the Declaration of Independence in 1776.
But US renewable energy firms may soon lose some of their liberty.
On Friday (27th June), Republicans in the US Senate released the latest draft of the Trump administration’s One Big Beautiful Bill. The 940-page tax and spending package includes a wide range of changes to enable President Trump to pursue his political agenda, including changes to border security funding, changes to healthcare funding, and other tax cuts.
The package also includes significant changes for renewables projects.
First, it is pledging major cuts to the solar and wind tax credits that were introduced in the Inflation Reduction Act signed into law under the Biden administration in August 2022. The new draft of the OBBB commits to phase out tax credits for wind and solar projects faster than previous drafts, adding that the credits will only apply for wind and solar farms that begin producing electricity before the end of 2027.
For example, the first draft that said projects would be able to claim the full credit if construction started in 2025; claim a 60% credit if construction started in 2026; and claim a 20% credit if construction started in 2027. The decision to change tax credits for wind and solar developers comes after Trump himself lobbied for a quicker end to the credits. This is set to come into force for projects where construction started after 16th June this year
Second, the package would eliminate tax incentives for consumers to buy electric vehicles and make their homes more energy efficient by using solar panels, heat pumps and other technologies. The OBBB would end credits for these purposes in 2026 and 2027, instead of between 2033 and 2035 under the current law.
And third, the legislation pledges to impose a new tax on wind and solar projects commissioned after 2027, based on what percentage of their value is from components produced outside the US. This is intended to weaken US reliance on imported components for solar and wind farms but has prompted warnings that it could “devastate” the industry.
Midnight dumping
Trump’s disdain for renewables shows that this is no accident.
Jason Grumet, chief executive at the American Clean Power Association, said the changes in the updated bill text would freeze renewable energy investments, reduce US energy production, and push up energy bills: “With no warning, the Senate has proposed new language that would increase taxes on domestic energy production. In what can only be described as ‘midnight dumping’, the Senate has proposed a punitive tax hike targeting the fastest-growing sectors of our energy industry,” he said.
Grumet added that the new tax would “strand hundreds of billions of dollars in current investments, threaten energy security, undermine growth in domestic manufacturing and land hardest on rural communities” that have benefited from green energy investments. He urged Senate not to rush through the changes.
Ray Long, president and chief executive for the American Council on Renewable Energy, agreed that the bill would “increase everyone’s electricity costs at a time when prices are already high” and “result in hundreds of thousands of lost jobs and factory closures”.
In addition, Long said it would “play into China’s hands by severely diminishing our ability to compete globally at a time when China is building all energy technologies in order to beat the US”.
And Adrian Deveny, founder and president of policy advisory company Climate Vision, was quoted in an article in Politico calling the move a “kill shot” for renewable energy: “This new excise tax on wind and solar is designed to fully kill the industry,” he said.
Those in the wind industry feared the impact of Trump’s policies before he came to power in his first presidential term that started in January 2017. Those fears are coming to pass second time round.
The changes present some new challenges for wind, where 1.3GW of onshore wind developments were completed in the first quarter of 2025. This follows a difficult 2024 for the sector, which had its worst year for installations in a decade at just 4GW.
However, wind farms may be protected from import taxes as most onshore turbines used in the US in 2024 were made by US firm GE Vernova (56%) or at Vestas’ US facilities (40%).
The full impacts are yet to be revealed but the taxes are likely more punitive for solar and storage, where the American Clean Power Association reported US installations of 33GW and 11GW respectively. Despite recent rises in domestic solar manufacturing, only a small proportion of US solar farms commissioned in 2024 used US-made panels. Most were imported from southeast Asia.
There is a similar dynamic in the energy storage sector, where around 80% of the lithium-ion batteries used in the US in 2023 were imported from China.
The US renewables industry is susceptible to these planned last-minute changes. Trump is looking to push through the OBBB by the end of today, but the result for renewable energy projects is likely to be more death than liberty.
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