Trump Administration Blocks Solar and Wind Projects Amid Rising Electricity Costs

President Trump announced that the US will not approve solar and wind power projects, despite increasing electricity demand. Renewable energy companies such as First Solar, Sunrun, and NextEra Energy fear that their projects will no longer receive permits. Trump blames renewable energy for rising electricity costs and terminated investment and production tax credits for wind and solar projects by 2027.

The Trump administration has announced a significant policy shift that will impact the renewable energy sector in the United States. Effective immediately, the administration has halted approvals for new solar and wind power projects, citing rising electricity costs and the need to promote domestic energy independence. This move has sparked concern among major renewable energy companies, including First Solar, Sunrun, and NextEra Energy, who fear that their projects will no longer receive necessary permits and funding.

The policy change includes the termination of investment and production tax credits for wind and solar projects by 2027, which were previously scheduled to expire in 2026. This abrupt end to federal support has led to market volatility and uncertainty, particularly for residential solar installations, which have seen a 13% decline in Q1 2025 [1].

The immediate impact of this policy shift is evident in the residential solar market, where installations have dropped significantly. The absence of a phase-out period for residential tax credits has forced a "last-minute rush" to complete projects before the deadline, creating a surge in short-term demand followed by a potential post-deadline slump [1].

Commercial solar and wind projects, however, remain eligible for tax credits until 2026, provided they begin construction by July 4, 2026. This has resulted in a "race to build," with developers prioritizing projects that can demonstrate "physical construction" under the new, stricter definitions. The Treasury Department's revised guidance has increased compliance costs and reduced flexibility for smaller developers, favoring larger firms with capital and supply chain access [1].

The policy shift has also led to a regional slowdown in the Midwest and Mountain West, where federal tax credits were crucial for attracting renewable energy projects. Conversely, states with strong domestic manufacturing bases, such as Texas and Georgia, are better positioned to weather the storm, thanks to their investment in solar panel and battery manufacturing [1].

The administration's focus on energy independence has also sparked interest in alternative energy sources like hydrogen and nuclear. While these sectors are capital-intensive, they could see long-term growth if policy support shifts further [1].

Investors are advised to target undervalued commercial solar firms, domestic supply chain players, and state-level incentives in California and New York to navigate the policy uncertainty. Utility-scale solar-storage projects and domestic supply chain firms like First Solar are likely to benefit from the shift in policy [1].

References:
[1] https://www.ainvest.com/news/trump-administration-subsidy-overhaul-implications-renewable-energy-investment-2508/
[2] https://www.marketscreener.com/news/alternergy-says-erc-approves-2-8-billion-pesos-alternergy-tanay-wind-project-500kv-interconnection-ce7c51d2db8bf627
[3] https://www.politico.com/news/2025/08/15/trump-solar-wind-tax-00512034