When President Trump signed the One Big Beautiful Bill Act (OBBBA) into law in July, renewable energy advocates immediately identified the cutback in tax credits for wind and solar projects as potential industry killers. Ending those incentives also could take a financial toll across the gamut of developers, manufacturers and installers who’ve built businesses based on those benefits over the last few decades.

However, those tax credits have been political targets for years. Many industry watchers say wind and solar can make financial sense even without that assistance, thanks to falling costs compared to fossil fuel-fired alternatives. What could make their survival more difficult, though, are new environmental rules applied to renewables’ development. Though the new rules appear limited to efforts involving federal land, they could have a much broader impact.

Tax credit implications

To qualify for the 30% investment tax and production credits under the OBBBA’s new provisions, solar and wind projects will need to begin construction on or before July 4, 2026, or be placed into service by Dec. 31, 2027. Projects that have begun construction by the end of this year will need to be in service by Dec. 31, 2029, while those starting construction before July 4, 2026, will have until Dec. 31, 2030 to begin operations.

The phrase “begin construction” doesn’t necessarily mean work at a construction site needs to have commenced. Instead, it refers to physical work performed on- or off-site, which could include work on related inverters or transformers, or even the beginning of manufacturing of custom equipment, so long as there’s a signed contract. 

Given these deadlines, renewables consulting firm Wood Mackenzie sees installations increasing over the next year, noting in a press statement that “permitted projects are well-positioned, but unpermitted developments face growing uncertainty as permitting bottlenecks threaten to push completion dates outside eligibility windows.” (As the new permitting requirements outlined below indicate, those bottlenecks could be substantial.) 

Beyond that period, the firm forecasts utility-scale installations over the next decade could fall 17% to a 10-year total of 375 gigawatts (GW). By comparison, a record 41 GW of utility-scale solar was installed in the United States in 2024 alone. 

While tax incentives have been an obvious boon to renewable development, some experts say solar and onshore wind have hit financial viability on their own. A report from the investment bank Lazard released after the OBBBA’s passage notes that wind and solar, even unsubsidized, have offered the lowest-cost generation for the last decade.

Additionally, the report added, costs to build new combined cycle gas turbines have reached 10-year highs. 

“As such, renewable energy will continue to play a key role in the buildout of new power generation in the U.S. as the lowest-cost and quickest-to-deploy generation,” according to the report.

Permitting hurdles

Lazard’s optimistic forecast doesn’t address the bureaucratic challenges new projects that haven’t yet been permitted could face going forward. In July, the U.S. Department of the Interior (DOI) announced that all wind and solar projects on federal land will have to undergo “elevated review” from the office of Secretary of the Interior Doug Burgum. In August, DOI released an order mandating all energy projects based on federal land be evaluated for how much energy they’re able to produce per square acre, a metric that would obviously favor combustion generation over solar and wind. 

This increased scrutiny has already led to the cancellation of what would have been one of the world’s largest solar developments in the Nevada desert north of Las Vegas. Called Esmeralda 7, the plan encompassed seven solar farms, with a capacity totaling 6.2 GW, that were progressing through permitting as a single entity. On Oct. 10, the Bureau of Land Management announced its decision to cancel the environmental review. The developers could seek their own permits, but that could be futile given heightened scrutiny.

On the surface, it would seem only those projects planned for public land would face the DOI’s new three-tiered review process. However, even proposed installations on private land could be at risk if they require any federal permitting, including for rights-of-way, construction and operation plans, and consultations or reviews related to the National Environmental Policy Act or the Endangered Species Act. Any requests related to these issues would have to first be submitted to the Office of the Executive Secretariat and Regulatory Affairs, then be reviewed by the Office of the Deputy Secretary and then receive a final review by the Office of the Secretary.

Making things even more difficult, the Fish and Wildlife Service has stopped allowing project developers access to a database often used to identify potential endangered species in a project’s location and receive automated determinations regarding its potential effect on those species.

stock.adobe.com / UncleFredDesign