Solar Stalls, Wind Wavers: The Impact of One Big Beautiful Bill
- August 27, 2025
When the One Big Beautiful Bill Act (OBBB) passed in mid‑2025, it marked a decisive shift in the United States’ approach to clean energy. Promoted by supporters as a course correction to the Inflation Reduction Act (IRA) of 2022, the OBBB has instead been widely interpreted by clean energy experts as a major policy rollback—one that adds regulatory hurdles, curtails tax credits, and casts uncertainty over the future of America’s energy transition.
A sharp turn
The OBBB changes the landscape of clean energy in the U.S. by narrowing eligibility for a broad suite of federal tax incentives. The OBBB significantly tightens access to tax credits for solar, wind, and EV manufacturing, while preserving incentives for geothermal, nuclear, and carbon capture.
The OBBB shortens the timeline for wind and solar projects to qualify for tax credits. Developers must either start construction within a year or finish projects by the end of 2027. This creates pressure to move quickly or miss out on federal support. Meanwhile, tax incentives for newer technologies like battery storage and carbon capture remain mostly intact through the next decade.
To qualify for tax credits, all new clean energy projects must now follow strict rules on foreign ownership and sourcing. Originally limited to EVs and advanced manufacturing, these “foreign entity of concern” (FEOC) restrictions have been expanded under the OBBB to apply to nearly all clean energy incentives.
Projects linked to certain foreign companies—especially those owned or influenced by the Chinese government—are now ineligible, even if they simply buy components from or make payments to those entities.
(Also read: What’s Holding Back Foreign Investors in Renewable Energy?)
A sudden halt in momentum
Following the IRA’s passage in 2022, the U.S. experienced a surge in clean energy investments.
Investment in clean energy technologies—like solar, wind, and electric vehicles—went up by 71% in the two years after the Inflation Reduction Act (IRA) was passed, compared to the two years before it
But OBBB may well reverse that trend.
According to BloombergNEF, the bill will lead to:
- A 23% reduction in clean energy capacity additions (wind, solar, and energy storage) through 2030.
- A 50% drop in onshore wind development, and a 23% fall in solar deployment.
- Slower energy storage growth, with projected reductions of around 7%.
In financial terms, the independent research provider Rhodium Group estimates that:
- Clean energy capacity through 2035 will decline by 53–59%.
- Over $500 billion in planned investments across clean energy and transportation projects may now be delayed or canceled.
- Facilities that produce clean energy technologies—representing close to $150 billion in investment—face increased financial strain due to declining domestic demand.
- Average household energy costs could increase by $78 to $192 per year by 2035.
Repealing key tax credits for solar and wind doesn’t just slow the clean energy rollout—it also shifts money away from energy developers and back into the federal budget. This move could ultimately raise electricity prices for consumers. Wholesale electricity prices are projected to rise by 25% by 2030 and 74% by 2035, while consumer electricity bills could increase by 9% to 18% by 2035.
“It will also lead to less wind and solar on the US grid, although the precise impacts are uncertain because they depend on how market participants and regulators respond,” said Dr. Noah Kaufman of Columbia University’s Center on Global Energy Policy. “Some projects will be canceled, while others will rush to meet deadlines or proceed without federal support.”
According to BloombergNEF (BNEF), wind and solar installations are expected to drop sharply—from 81 GW in 2027 to 48 GW in 2028—as key tax incentives expire and developers race to complete projects in time.
“A short path still exists for wind and solar projects to access these credits, but it will not be an easy road ahead for most developers,” BNEF analysts noted in their report.
(Also read: Energy Strategy in Focus at BusinessWorld Economic Forum)
Uncertainty for developers and manufacturers
Developers now face a complex regulatory maze. The need to start construction by late 2025 to qualify for tax credits means scrambling to beat the clock, while the foreign entity clause introduces major sourcing and compliance risks. Companies that rely on Chinese solar panels, wind turbines, or EV components now face steep barriers to eligibility—despite the fact that China remains the world’s dominant supplier in these industries.
The FEOC rules introduce new legal hurdles. Projects that use equipment, funding, or technology from countries labeled as foreign entities of concern—such as China, Russia, Iran, and North Korea—can lose access to tax credits if those entities are found to have “effective control.”
To stay eligible, developers must now closely examine and verify their entire supply chains, including the ownership of suppliers and the origin of all key components.
A pause or a pivot?
The One Big Beautiful Bill has paused—or possibly derailed—the growth of the clean energy industry in the United States. Whether this marks a temporary policy detour or a more permanent redirection depends on future congressional dynamics and market responses. For now, U.S. clean energy developers, manufacturers, and consumers are left navigating a far more complex—and far less certain—landscape.
Sources:
https://www.congress.gov/bill/117th-congress/house-bill/5376/text
https://pv-magazine-usa.com/2025/07/18/the-rise-and-fall-of-clean-energy-deployment-following-obbb/
https://www.thomsonreuters.com/en-us/posts/sustainability/one-big-beautiful-bill-act-clean-energy/
https://about.bnef.com/insights/clean-energy/trump-slams-the-brakes-on-us-wind-and-solar-growth/
https://rhg.com/research/assessing-the-impacts-of-the-final-one-big-beautiful-bill/
https://www.iea.org/reports/energy-technology-perspectives-2024
https://supplychaindigital.com/news/how-trumps-budget-bill-is-slashing-green-energy-incentives
