The New U.S. Energy Course: Is the Era of Renewable Support Ending?
Donald Trump’s executive order, signed on July 7, 2025, may prove to be a turning point for the renewable energy sector in the United States. Introduced alongside the so-called One Big Beautiful Bill Act, Trump’s new policy formally signals the end of key tax incentives for wind and solar projects—effective as soon as after 2026. Is the “energy dominance” policy based on fossil fuels the new normal in the U.S.?
An Offensive Against “Unreliable Renewables”?
In Trump’s order, renewable energy sources are described as “expensive, unreliable,” and “making the country dependent on supply chains controlled by foreign adversaries.” This stance sharply contrasts with President Biden’s policies, which—through the Inflation Reduction Act—introduced significant tax incentives, enabling the growth of the renewables sector and attracting record investments.
Now, Trump not only revokes these subsidies but also directs the Department of the Treasury and the Department of the Interior to:
- End the validity of tax credits for wind and solar energy (Sections 45Y and 48E of the Tax Code).
- Introduce strict criteria for the start of renewable energy projects, limiting the use of so-called “safe harbors.”
- Review all federal regulations that favor renewables over traditional energy sources.
- Freeze new permits and support for offshore projects—at least until the review is complete.
End of Incentives = End of Development?
Previous regulations allowed developers to apply for a 30% tax credit until 2032. Under the new rules, only projects that begin construction before the end of 2026 and are operational before the end of 2027 will be eligible. Shortening the investment horizon by five years is a significant blow to projects that require lengthy planning, permitting, and financing processes.
According to analysts at Wood Mackenzie, the U.S. solar market had already seen a 7% decline in Q1 2025 compared to the same period the year before. Now, this trend may worsen. Investors could see the sector as too risky.
Jobs and State Goals at Risk
Wind energy currently provides about 10% of the country’s electricity and employs over 131,000 Americans. States like Iowa and South Dakota, where over half of the electricity comes from wind, are particularly at risk.
Even greater concerns surround offshore wind projects, into which billions have already been invested by states like New York and New Jersey. These states planned to launch 9 GW and 11 GW of offshore capacity by 2035 and 2040, respectively. A federal policy shift could stall these ambitions and hinder climate goals.
Are the U.S. Ceding Ground to China and Europe?
Trump’s decision may also have serious geopolitical implications. According to the International Energy Agency, global clean energy investments will reach $2.2 trillion in 2025, compared to “only” $1.1 trillion for fossil fuels. Europe, China, India, and other energy giants are not slowing down.
America’s withdrawal from renewable subsidies could mean:
- Lost technological leadership, especially in sectors like energy storage, photovoltaics, and green hydrogen.
- Limited access to global export markets for American companies.
- Increasing dependence on foreign technologies—ironically undermining Trump’s own strategy of energy independence.
Trump has made no secret of his goal to restore U.S. “energy dominance.” A National Energy Dominance Council has even been established to support the fossil fuel sector, attract private investment, and eliminate “bureaucratic barriers.”
Coal, gas, oil, and nuclear will now take center stage. But can a world already reeling from climate change afford such an energy regression?
Article in polish: Nowy kurs energetyczny USA
Source: carboncredits.com