Solar Electric Power NAICS 221114

Jul 8, 2025 - Budget Reconciliation Law to Reduce Clean Energy Investment

• Renewable energy industry insiders expect the tax and policy bill signed into law in early July by President Trump to reduce clean energy investments, according to The Wall Street Journal. The Biden-era Inflation Reduction Act created 30% tax credits for renewable energy projects, either on the development side with Investment Tax Credits (ITC) or for producing clean energy with Production Tax Credits (PTC). The credits were to remain available until 2032. The legislation signed in July sunsets the ITC and PTC for wind and solar projects five years early in 2027. The new law also requires projects to have higher levels of US-derived content and increases restrictions on content from foreign entities of concern (FEOC). Princeton University’s REPEAT Project estimates the new law will reduce US electricity and clean fuels production by $500 billion over the next decade.
• Since the beginning of 2025, nearly $15.5 billion in clean energy investments have been cancelled, closed, or scaled back, according to a report released in late June by clean energy advocacy nonprofits E2 and the Clean Economy Tracker. Many of the cutbacks came in anticipation of the Trump administration’s goal to claw back some tax credits created during the Biden administration. Clean energy projects have also faced other headwinds, including inflation, high interest rates, and supply chain snarls that affected project timelines, according to The Wall Street Journal. The E2 and the Clean Economy Tracker report said about $450 million was invested in May across five states for solar, EV, grid enhancements, and transmission equipment, but those investments come well short of offsetting the value of project cancellations.

• At the recent Transmission and Interconnection Summit sponsored by Infocast, regional grid operators CAISO, ERCOT, MISO, and SPP said they planned to invest billions of dollars to expand electricity transmission infrastructure, according to PV Magazine. Much of the need for transmission investment is driven by anticipated load growth. However, transmission growth is also needed to bring more low-cost renewable energy to the grid. In 2023, the US Department of Energy estimated that a clean grid would require 54,500 gigawatt-miles of additional inter-region transmission capacity. One summit speaker noted operators are committed to building a larger grid that can accommodate renewables additions, reduce costs for ratepayers, and withstand extreme weather and larger loads.
• Solar component costs are expected to rise and supplies will tighten as tariffs push buyers to seek domestically produced products, according to consultancy Anza Renewables’ Q2 2025 Domestic Content Insights report and reporting by Utility Dive. While some US solar product manufacturers are ramping up production, logistical and financial restraints are causing others to pause their planned expansions. While the Trump administration has paused reciprocal tariffs until July 8th, it has imposed a flat 10% tariff on most imports, and a 145% levy on imports from China. Shifting trade policies have prompted US solar manufacturers, buyers, and developers to delay procurement choices and recalibrate supply chain strategies. Anza expects market uncertainties to weigh on US solar manufacturing growth. While the number of US-based solar module suppliers could rise to as many as 10 by 2027 compared to five today, the number of solar cell suppliers is expected to remain relatively flat, rising to only 18 from 17 over the same period.