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The bill unplugs more than 300 gigawatts of wind and solar projects that would have been built through 2035, according to one analysis.
As Donald Trump’s $3.4 trillion fiscal package moved through Congress, there was some relief in the renewables industry that a proposed excise tax on wind and solar projects had been expunged.
Still, with the White House readying today’s bill signing ceremony, make no mistake: the US president’s victory marks a deep setback for the shift to clean energy. His legislation will aggressively phase out tax credits for wind turbines and solar panels, threatening many projects.
Energy Innovation, a climate policy think tank, predicts the law will significantly crimp the expansion of renewables. In an analysis this week, it forecast that about 200 gigawatts of wind capacity and 150 gigawatts of solar won’t get built that otherwise would have by 2035.
That period roughly coincides with a decade of soaring electricity demand, a stark reversal after a generation of sluggish growth. By 2030, Texas — a state that invested heavily in clean energy — may need the equivalent of 30 nuclear reactors, or 30 gigawatts, to quench the thirst of data centers that power artificial intelligence.
Source: BloombergNEF
Renewables were positioned to be leading providers of that supply. Utility-scale solar last year accounted for 61% of US capacity additions, or 30 gigawatts, according to the Energy Information Administration.
Solar was primed for further growth because it’s the cheapest domestic electric source, batteries capable of deploying excess power in the evening have become mainstream, and it’s quicker to build than natural gas-fired plants or atomic reactors.
And, of course, there was former President Joe Biden’s landmark 2022 climate law. Goldman Sachs Group Inc. estimated in 2023 that his signature legislation would ultimately cost about $1.2 trillion and spur even more in private investments.
But Trump’s bill yanks or dials back provisions in the Biden law, and in the process creates more questions about how the country will power the first wave of the AI boom.
–Brian Eckhouse, Bloomberg News
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