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Treasury Tightens Rules On Wind And Solar Subsidy Phase-Out, Making Projects Harder To Qualify

The renewable energy industry is facing tighter requirements under the new guidance.

by Callie Patteson
August 19, 2025, 9:54 AM
in Energy, Money & Finance, News, Politics
Reading Time: 2 mins read
A A
0

Wind farm stopped
The Trump administration has further tightened the screws on the renewable energy industry, making it more difficult for new projects to claim tax credits that are set to phase out next year. [emphasis, links added]

The Treasury Department issued new guidance on Friday on enforcing the planned phase-out of subsidies.

It places tight restrictions on when a wind or solar project can be considered under construction, a key definition under the law.

The guidance stems from an executive order signed by President Donald Trump in July, which ordered the agency to ensure projects cannot skirt the deadlines for phasing out the credits in the One Big Beautiful Bill Act.

The law ends the subsidies for wind and solar projects placed in service, meaning operational and plugged into the grid, after the end of 2027.

The bill did include a carve-out for projects that begin construction less than one year after the bill is enacted to claim the credit, but the Treasury’s new guidance will make that even more difficult.

Under the new rules, the Treasury Department considers a wind and solar facility under construction when “physical work of a significant nature begins.”

This varies depending on whether the project is for a wind or solar facility, though it solely focuses on the type of work performed on and off-site.

Off-site work that falls under this definition includes manufacturing components and mounting equipment, transformers, support structures, inverters, and other power conditioning equipment.

On-site work that is described as significant is much more specific.

For a wind facility, on-site work includes excavating the foundation of a turbine, setting anchor bolts into the ground, or pouring concrete for the foundation.

For a solar facility, this is limited to installing support racks or other structures to which panels, solar cells, or collectors will be affixed.

Other preliminary activities associated with constructing a wind and solar facility, such as surveying, site clearing, test drilling, and excavating, do not fall under the administration’s revised definition of beginning construction.

The new guidance was swiftly criticized by the renewable energy industry, with many accusing the administration of creating more burdensome regulations that will make it difficult to add more energy to the U.S. grid while demand soars.

Read rest at Washington Examiner

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