Surging renewables fall off the megalaw cliff

Politico

3 days ago

Efforts to green the economy are speeding up just as President Donald Trump works to shut them down.
Solar generation is up 32 percent through the first six months of 2025 compared with the same time last year, according to preliminary data by the U.S. Energy Information Administration. It is up a whopping 99 percent since 2022, when former President Joe Biden signed the Inflation Reduction Act.
The climate law's generous subsidies are also starting to bear fruit for storage developers, who beat the 2022 annual record for new battery capacity by May. Electric vehicle sales in the first half of 2025 also hit a record 607,000 vehicles, an increase of 1.5 percent over the same time period in 2024.
But as I write today, that clean energy boom might be headed for a bust.
Renewable installations and EV sales are expected to plummet as a result of Trump's One Big Beautiful Bill Act, which phases out credits for most of those industries and puts new restrictions on others. Republicans say the credits are a waste of money and that the country needs more traditional forms of electricity generation like coal and natural gas to bolster the power grid.
The credits for EVs will be gone in October, leading some analysts to predict a short-term boom in sales this quarter before they plummet in the last three months of the year.
The story is more complicated for wind, solar and other renewables, as the law sets up a complicated system for phasing out the taxes depending on when projects start construction. The bottom line: Renewable installations are likely to continue for the next couple years before falling off a cliff.
The nitty-gritty: A graphic helps tell the story. The figures are from EIA, and represent the information that power companies report to the government about their facilities.
On the left side, you'll see how solar and storage installations rocketed upward in the wake of the IRA's passage in 2022. As Ryan Jones, the co-founder of Evolved Energy Research, told me: 'I think the IRA was doing what it intended. That increase in solar can't be accounted for in the cost of projects over the last couple of years.'
Notably, wind has not performed as well since passage of the IRA. The industry faces a series of restraints, such as the lack of transmission capacity and growing local opposition to new projects that have hampered installations.
The right side shows what could happen next. Under Trump's budget bill, projects that begin construction before July 4, 2026, are still likely to be eligible for credits through the end of the decade. That's why you see such a large number of solar and storage projects over the next couple of years. Projects that begin construction after that date are subject to a new restriction requiring they come online by the end of 2027 to receive the credits.
Once 2028 rolls around, no new projects will be able to qualify for credits.
An important caveat: The EIA's figures represent the most recent data as of May, and so they don't yet incorporate the impact of Trump's budget law.
The projects reported to EIA tend to be those that are already in advanced development. Without IRA tax credits to rely on, few renewable developers are likely to add many more projects to the agency's list.
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That's it for today, folks! Thanks for reading.