Trump Clampdown Tightens Rules on Wind and Solar Tax Credits

• Trump’s executive order forces strict enforcement of the One Big Beautiful Bill Act, slashing wind and solar tax credits and tightening rules for project eligibility.

The White House has sharpened its stance on clean-energy subsidies. On Monday, President Donald Trump signed an executive order that compels the Treasury and Interior departments to rigorously enforce a phase-out of production and investment tax credits for new wind and solar facilities, as mandated by the recently enacted One Big Beautiful Bill Act. 

Under the order, Treasury officials have 45 days to revise guidance so developers can no longer qualify for credits merely by “breaking ground” or stockpiling equipment. Projects must show “substantial physical progress” to meet safe-harbor rules, and any attempt to accelerate eligibility will be treated as abuse. Facilities that fail to begin real construction within 12 months of the law’s July 4 signing—or reach commercial operation by the end of 2027—will permanently lose incentive access. 

The directive also extends the bill’s tougher “Foreign Entity of Concern” provisions, limiting the use of components sourced from adversarial nations. Meanwhile, the Interior Department must strip wind and solar of preferential siting or royalty treatment on federal lands, aligning their terms with oil, gas and coal leases. 

Administration officials framed the move as an effort to “unleash American energy” and end taxpayer support for what they called “expensive and unreliable” technologies. Industry groups, however, warned the sudden policy shift will jolt a sector that announced a record 27 GW of capacity additions last year. Developers racing to secure financing before deadlines now face tighter scrutiny, higher compliance costs and potentially steeper capital hurdles.

Market reaction was swift: leading U.S. residential-solar installer Sunrun fell 11 percent on Tuesday, while inverter specialist Enphase Energy lost almost 6 percent. Utility-scale builder First Solar slipped nearly 4 percent, and diversified giant NextEra Energy shed 3.9 percent, even as the broader S&P 500 traded flat. Analysts at Wood Mackenzie said the combined tax-credit sunset and executive-order constraints could shave up to 20 GW from planned wind-and-solar pipelines through 2030, unless lawsuits or a future Congress intervene. 

Environmental advocates vowed to challenge the order in court, arguing it violates statutory discretion granted to Treasury and Interior. For now, the clock is ticking: developers must prove meaningful progress by early July 2026—or risk seeing their projects stranded without federal support.