Tuesday, AUGUST 19, 2025 |
In Washington, D.C., the Treasury Department on Friday issued guidance that narrows which wind and solar energy projects can receive the remaining tax credits that were largely eliminated under the Republicans’ “big, beautiful bill” earlier this year.
The legislation axes the credits for projects that don’t begin producing electricity by 2028.
The law contains an exemption for projects that begin construction over the next year. Under the law, those projects would remain eligible for the subsidies even if they don’t produce electricity under the specified time frame.
There’s a catch, though. The Trump administration’s new guidance sets further restrictions on which projects are considered to have begun construction.
The bill says that construction of these projects must be “continuous.” It also defines “having begun construction” as having done “physical work of a significant nature.” This includes manufacturing equipment and excavating land to begin placing equipment in it.
The bill excludes activities like only having done surveys, test drilling or excavation for purposes of altering the landscape.
The guidance also says that even if the project meets those other requirements, it still must produce electricity by the end of the fourth calendar year after it begins construction.
The renewable energy industry criticized the guidance, saying it would slow the buildup of low-carbon energy sources.
Climate activists are unhappy with the change.
The Hill also reports that in recent weeks, President Trump used other policies to go after renewables, including efforts to slow federal approval of wind and solar projects.
Senate Republicans did abandon an effort to impose new taxes on solar and wind energy if their components came from China. Since taking office, Trump has characterized wind and solar energy projects as unreliable, expensive, and overly dependent on Chinese supply chains.
The One Big Beautiful Bill Act, which Trump signed into law last month, requires projects to begin construction by July of next year or enter service by the end of 2027 to qualify for a 30 percent tax credit and bonuses that can push the subsidy even higher.
