Trump administration tightens requirements for renewable energy tax credits

The Treasury Department published new guidelines restricting access to tax credits for wind and solar energy projects, in compliance with the executive order issued by President Donald Trump following the passage of the Republican bill known as One Big Beautiful Bill.

The measure further defines which wind and solar energy projects will be able to continue to receive the remaining ctax credits still available. While the law passed last month allows developers who break ground in the next year to access the benefits even if their facilities don't begin generating electricity until 2028, the new Treasury guidance imposes additional limits. It is now required to demonstrate that construction actually began, with verifiable physical progress, not just preliminary paperwork or minimal investments.

New conditions

The guidelines specify that projects must show continuous physical progress, such as equipment fabrication, excavation or foundation installation. Preliminary activities such as topographical surveys, test drilling or earthworks that do not result in substantial work are excluded.

In addition, a maximum deadline is established: facilities must start generating electricity before the end of the fourth calendar year following the start of construction, or they will lose access to the tax credit.

This change responds tothe White House's instructionto ensure that companies do not use minimal investments or preliminary paperwork as a mechanism to retain subsidies indefinitely.

Green industry reaction

Renewable industry associations criticized the move, saying the decision slows the expansion of solar and wind power and could make electricity more expensive.

The Solar Energy Industries Association and the Environmental Defense Fundopined that the new restrictions will create significant barriers to clean energy investment and delay the transition to low-carbon sources.