Growing electricity demand in the US is forcing Republican policymakers to ease restrictions on tax credits in the Trump administration’s One Big Beautiful Bill Act. But will the proposed American Energy Dominance Act do enough to rebuild the confidence of developers and investors?
President Trump started his second term with a commitment to end tax credits for wind and solar projects. But despite sixteen months of chaos, he could yet preside over policies as unexpectedly ‘green’ as in his first term, from 2017 to 2021.
The statement from the White House on 7th July 2025, when the Trump administration committed to end “market distorting subsidies” for renewables, was forthright: “Ending the massive cost of taxpayer handouts to unreliable energy sources is vital to energy dominance, national security, economic growth, and the fiscal health of the Nation,” it said.
But, in recent months, developers and investors have seen more to be optimistic about than during the frenetic start of the second Trump presidency.
On 28th April, the American Clean Power Association released annual statistics for 2025 that said companies in the renewable energy sector invested $79bn in projects in 2025, which supported over 1.4million jobs and accounted for over 90% of power capacity added to the grid. In addition, 79% of installed renewables were in Republican-controlled districts.
Is this a hangover from pro-renewables policies in the Biden era? ACP said not. The trade organisation predicted that the growth of renewables was accelerating and that there would be up to 62GW of new clean power installations in 2026, if federal permitting challenges could be addressed. For wind, Biden’s final year of 2024 also represented a decade low with 5.2GW of new capacity installed, which increased to 6.9GW in 2025.
Trump’s drive to end tax credits for wind and solar power has prompted developers and investors to move ahead with their projects quickly where possible, and make sure they work financially without those tax credits.
Yet some Republicans are now having second thoughts about ending support for renewables while electricity demand continues to rise, due to trends such as rising demand for data centres; and because crises, notably the war in Iran, has boosted demand for US-made power sources.
This surprise support for renewables has emerged in two main pieces of legislation.
OBBBA and energy dominance
Trump’s flagship One Big Beautiful Bill (OBBB) Act was signed into federal law on 4th July 2025 and was meant to represent the end of clean energy tax credits.
Despite those fears, some analysts have highlighted that the OBBB Act has not been as punitive for renewable energy developers as initially feared. The final version retained a four-year window for developers to complete their wind or solar projects and claim tax credits, as long as construction started by 4th July 2026. Firms that miss that deadline could still claim tax credits if their projects are commissioned by 31st December 2027.
The OBBBA has also retained the potential for owners to transfer tax credits, which was set to be repealed, and has extended tax credits for clean fuel production. These shifts have created more favourable rules to enable renewables to meet rising power demand.
Similar measures to support tax credits could gain further momentum if new legislation proposed by a group of Republican lawmakers proceeds. On 23rd April, Congressman Brian Fitzpatrick and three colleagues introduced the American Energy Dominance Act (AED Act) in partnership with the North America’s Building Trades Union.
This Act proposes to restore the renewable energy industry’s investment tax credit and production tax credit, which it said would help stimulate investment and promote US energy security. This support for the renewables sector sits alongside the Act’s commitments to boost energy efficiency in commercial buildings and homes; and a pledge to extend the deadline for the production tax credit from clean hydrogen by five years, to cover projects that see a start of construction by 1st January 2033.
The AED Act’s proponents argue that “these incentives provide more than tax relief – they provide a stable foundation for long-term American growth” by restoring the certainty that developers and investors need to “plan, finance, and build major projects”.
This shows there is still support among Republicans to see renewables keep growing, despite the Trump administration’s rhetoric, because of the positive impacts on local jobs, investment and energy security. This also shows an acceptance that renewables can play an important economic role as the US battles for supremacy in the global race to roll out artificial intelligence, and as the US grapples with energy market upheaval.
There remain difficulties with federal permitting for renewables projects. But while President Trump may not like renewables personally, he may also be forced by economic reality to override his personal animosity to unlock growth. This happened in his first term and could again.
The AED Act is far from a done deal but, after 16 months of uncertainty, the fact it exists at all should give the industry a degree of confidence.
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