Renewables Industry Fears Ugly Outcomes from Trump’s “One Big Beautiful Bill”
President Donald Trump’s proposed “One Big Beautiful Bill” Act (OBBBA) – a sweeping budget bill passed by the U.S. House last month – would mark a sharp reversal of federal support for clean energy. The bill's progression through the Senate will be pivotal in determining the future of U.S. energy policy, particularly the Inflation Reduction Act (IRA) of 2022.
Proposed Changes
As passed by the House, the bill would effectively end most federal clean energy tax credits. Wind and solar projects would only qualify if they begin construction within 60 days of enactment or come online within two years, after which the credits expire. This timeline is a drastic acceleration of the IRA’s schedule, which allowed most credits through 2032 or later. The only exception would be for advanced nuclear plants, which get until 2031 to come online.
The IRA’s support for domestic clean tech manufacturing would also be severely curtailed. The Advanced Manufacturing Production Credit (45X), which had spurred numerous factory plans, would face a phased reduction starting after 2029. Moreover, strict “Foreign Entity of Concern” rules in the legislation would bar projects or factories using equipment or inputs from countries like China from receiving certain credits.
In line with Trump’s “energy dominance” agenda, the OBBBA would also push federal support back toward fossil fuels. Although primarily a tax and budget bill, it includes measures favorable to oil and gas, such as increased leasing of public lands for drilling.
Industry Reactions
According to an analysis from the Solar Energy Industries Association, the proposal puts at risk 145,000 GWh of annual clean electricity generation across the US.
The Rhodium Group attributed this scale back to diminished funding. The group found that the bill could “put a meaningful portion of half a trillion dollars of new manufacturing, industrial, and clean electricity investments across the country at risk.”
The result of less cheap, clean electricity is likely to be higher prices for end users. Rhodium’s analysis found that the bill would raise U.S. household energy costs by as much as 7% –or $300 – in 2035.
The prospect of the bill passing is spooking the offtake market especially.
"Our general takeaway is that any project with COD from 2028 and out is at extreme risk,” said a Pexapark customer and major offtaker.
“The project economics just don't pencil without the tax incentives. If the bill passes, it will put a strain on generation beyond 2028 and could be really tough on smaller developers,” he added.
Just how tough is now up to the Senate.
