On July 4, 2025, President Trump signed into law a sweeping tax-and-spending package dubbed the One Big Beautiful Bill Act. While it delivers on border security and tax reforms, it also marks a significant rollback of Biden-era clean energy incentives—raising alarm about the future of U.S. decarbonization efforts.
What the Bill Does to Clean Energy
- Rescinds IRA tax credits: Wind and solar production and investment tax credits (Section 45Y & 48E) will expire for projects placed in service after December 31, 2027—though projects beginning construction within 12 months post-enactment keep eligibility1.
- EV & residential solar credits slashed early: The $7,500 EV tax credit ends September 30, 2025; residential solar and energy-efficiency credits terminate by the end of 2025 or mid‑2026.
- Support shifts to fossil fuels & nuclear: The bill redirects federal backing toward oil, gas, coal, and nuclear projects while allowing hydrogen, carbon capture, geothermal, and battery storage credits to remain, though limited2.
Immediate & Long-Term Consequences3
Immediate Rush—and Pause
Developers are racing to meet new construction deadlines. The “safe harbor” exception buys a one-year runway, but projects in early planning stages are at risk. Residential solar installers are expected to suffer layoffs due to collapsed demand.
Projects at Risk
Analysts estimate more than 28 GW of utility-scale renewables may no longer qualify for credits. Early projections warn that by 2035, the U.S. could forgo up to 300 GW of clean generation, raising energy costs and straining the grid, especially amid rising AI and data center loads.
Job Losses Loom
The nonpartisan Energy Innovation think tank estimates a loss of up to 830,000 clean energy jobs by 2030, with wholesale electricity prices soaring 50–60 % by 2035.
Investment Trends Before the Rollback (U.S. Clean Energy)
| Key Figures | Insights | Sources |
|---|---|---|
| ~$370 billion in incentives by end-2023 | Enabled a nationwide surge in clean energy project announcements and investment | Washington Post, IEA, Wikipedia |
| $272 billion clean energy investment in 2024 (+16% YoY) | Strongest year on record for climate tech & renewable project deployment | Clean Investment Monitor, Deloitte |
| $67.3 billion in Q1 2025 (+6.9% YoY, but down QoQ) | Momentum continued into 2025 but with signs of deceleration | Clean Investment Monitor, Rhodium Group |
Where Support Still Exists
Despite the sweeping rollback of federal clean energy incentives, several critical areas still retain support. Notably, battery storage, green hydrogen, and carbon capture technologies continue to benefit from existing tax credits. Battery investment credits remain intact through 2033, ensuring that grid-scale storage projects and standalone battery developers have a stable policy environment for the foreseeable future. However, hydrogen production under the 45V tax credit faces earlier phase-outs, creating uncertainty for large-scale projects such as HIF Global’s hydrogen facility in Texas, which may now be at risk if timelines slip.
A temporary reprieve exists for solar and wind developers through a one-year safe harbor clause, allowing projects that begin construction by mid-2026 to still qualify for IRA-era credits. This grace period has triggered a short-term rush to secure permits and break ground before the deadline.
In response to the federal rollback, state and local governments are stepping in to fill the gap. States like California, New York, Illinois, and Colorado are actively expanding their own clean energy mandates, rebates, and financing programs to sustain momentum. This decentralised policy support could soften the blow, particularly for distributed solar, community energy, and storage developers operating outside the federal framework.
The One Big Beautiful Bill represents a seismic shift—upending the clean energy boom ignited by the IRA. While some projects may limp along, the appetite for renewables, EVs, and household energy upgrades has been undercut. With jobs, grid resilience, and global climate goals at stake, the next 18 months will be decisive—shaping whether America rebuilds support for clean energy or cedes ground to competitors.
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