President Donald Trump has issued a new executive order aimed at tightening remaining loopholes in renewable energy subsidies, further reinforcing his administration’s shift away from federal support for wind and solar projects.
The order follows passage of the “One Big Beautiful Bill,” which already repealed major clean energy tax credits under the Inflation Reduction Act (IRA).
It directs the Treasury Department to narrowly interpret what qualifies as “under construction,” restricting eligibility for subsidies unless “a substantial portion of a subject facility has been built”.
Critics argue the move undermines bipartisan agreements that allowed projects a 12-month grace period under existing rules.
Jason Grumet, CEO of the American Clean Power Association, said, “The executive order and commitments to the Freedom Caucus seem at odds with that agreement.
The administration’s next steps are a clear test of whether Senate leadership or the House Freedom Caucus has more influence on national policy”.
In addition to narrowing tax credit eligibility, the order escalates restrictions on Chinese-backed clean tech by tightening “Foreign Entity of Concern” (FEOC) rules.
It also instructs the Interior Department to eliminate policies favouring wind and solar development on federal lands, potentially impacting large-scale projects.
Abby Hopper, president of the Solar Energy Industries Association, emphasised, “Business certainty, predictability, and even-handedness are bedrocks of federal policy that cannot be undone by the stroke of a pen”.
Supporters argue the crackdown could prevent abuse of subsidies and reduce the federal deficit.
“The Trump administration could… make it very specific in terms of what is under construction,” said Thomas Pyle of the Institute for Energy Research.
As solar accounted for 50GW of new capacity in 2024, the industry now faces heightened uncertainty amid growing energy demand and global calls for decarbonisation.
