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Maine is sprinting to build clean energy projects before federal tax credits expire.
State utility regulators are fast-tracking plans to procure nearly 1,600 gigawatt-hours of renewable energy, with the goal of getting projects started before key incentives disappear under the budget law signed by President Donald Trump this month. Developers were given just two weeks to submit proposals, with a deadline of July 25.
These projects should help the state make up for clean-energy developments derailed by the pandemic, and ultimately progress toward its newly mandated target of 100% clean energy by 2040.
“This is an opportunity to get some things done that Maine had every intention of getting done a handful of years ago,” said Eliza Donoghue, executive director of the Maine Renewable Energy Association, a nonprofit industry group. “It’s good news.”
The move comes as the clean-energy industry pushes other states, including New York and California, to help speed up wind and solar deployments before subsidies expire in the coming years.
For its part, Maine is looking for enough bids to meet roughly 13% of its annual electricity usage. Preference will be given to developments that make use of property contaminated by toxic PFAS, following the discovery in recent years that at least 60 Maine farms have unsafe levels of these “forever chemicals” in their soil and water.
This specification is a win for renewable energy, wildlife, and farmers whose land has been rendered unusable for agriculture, said Francesca Gundrum, director of advocacy for Maine Audubon.
“This work to help deploy solar and other renewable technologies is exactly the kind of siting we need to see more of in Maine,” she said. “Whatever we can do to minimize the turnover of habitat is something we’re going to be supportive of.”
The current procurement has its roots in a bill the Maine Legislature passed in 2023, calling for the state to source renewable energy from installations sited on PFAS-contaminated land. A request for proposals was issued in August 2024, but none of the initial bids were deemed cost-effective, and none were selected. This year, the Legislature went back to the drawing board, tweaking details about how solar and storage projects can enter proposals.
The amended bill was enacted in June with an “emergency preamble,” allowing it to become law immediately, rather than waiting the typical 90 days after the legislative session adjourns. That move required the approval of at least two-thirds of lawmakers in both the state Senate and House, which is an encouraging sign of support for renewables across political divides, said Dan Burgess, director of the Maine Governor’s Energy Office.
“It’s really exciting that a bipartisan coalition of legislators sees this as an opportunity to bring on low-cost clean energy in Maine,” he said.
Previous renewable energy procurements in 2020 and 2021 chose 24 wind and solar developments to buy power from. Many of these projects, however, fell apart when the COVID-19 pandemic disrupted global supply chains and drove up inflation, Burgess said. This latest solicitation is a great opportunity to make up some of that lost ground, he said.
Maine was an assertive early adopter of the “renewable portfolio standard,” a state-level regulation that requires utilities to obtain a certain percentage of their power supply from renewable resources. When Maine adopted the policy in 1999, it required 30% of the electricity sold to be renewable (a number it hit immediately because of the high concentration of hydropower in the state). The total requirement increases over the years; the state is now aiming for 90% renewables by 2040 with the final 10% coming from non-emitting but not necessarily renewable sources, like nuclear.
Today, about 32% of Maine’s electricity comes from gas-fired power plants, and another 31% from hydropower. Solar and wind together contribute roughly one-quarter of the supply.
Studies suggest that Maine’s commitment to renewable energy has already saved residents significant sums and stands to create even more financial benefits. A 2024 report on the impact of the renewable portfolio standard found that utility customers saved a total of about $21.5 million each year from 2011 to 2022. An analysis released in January concluded that reaching 100% clean energy by 2040 would save the average Maine household around $1,300 per year.
The current procurement is to be the last under the existing regulatory structure, in which the state Public Utilities Commission is the body that runs such solicitations. Legislation signed this month will create a cabinet-level energy department — currently Maine has only an energy office — with the authority to run regular procurements as needed to advance the state’s renewable energy goals.
“Instead of doing these one-off procurements specifically directed by the Legislature, we’re now getting to have that predictability,” Donoghue said.
A controversial bill to unravel North Carolina’s climate law would cost the state more than 50,000 jobs annually and cause tens of billions of dollars in lost investments, a new study finds. The research comes days before the Republican-controlled state legislature aims to override a veto of the measure by Gov. Josh Stein, a Democrat.
First passed by the Senate in March, the wide-ranging Senate Bill 266 repeals the 2030 deadline by which utility Duke Energy must curb its climate pollution 70% compared to 2005 levels. It leaves intact a mandate that the company achieve carbon neutrality by midcentury.
Senate leader Phil Berger, a 13-term Republican from Rockingham County, has said his chamber will vote on the override Tuesday, July 29. The House, which approved the bill with bipartisan support in June, could attempt an override of Stein’s July 2 veto the same day.
Conducted by BW Research for clean energy nonprofits, the new analysis draws on earlier projections from Public Staff, the state-sanctioned customer advocate. That modeling showed that without a near-term climate goal, Duke would build about 40% less new generation capacity over the next decade — leaning harder instead on aging fossil-fueled units to meet demand.
The fresh research calculates the economic losses of foregoing those new power plants, including massive amounts of solar and wind along with 300 megawatts of new nuclear and 1,400 megawatts of combined-cycle gas plants.
From 2030 to 2035, North Carolina would see nearly 50,700 fewer jobs annually and over $47.2 billion sacrificed in power-plant construction, the study says. More than $1.4 billion in tax revenue would also be left on the table.
“This study conveys in real terms the impact of arbitrarily removing a market signal that has proven to be a job creator and an economic booster for North Carolina,” said Josh Brooks, chief of policy strategy and innovation with the North Carolina Sustainable Energy Association.
BW Research finds that if SB 266 became law, Duke would have 12 fewer gigawatts of capacity in 2035 to meet peaks in power demand, like those that happen on unusually cold winter mornings. Experts say the company would likely have to purchase more out-of-state power or rely more heavily on fossil fuels as a result.
“This limitation hampers the state’s ability to meet current energy needs and undermines its competitive edge in attracting energy-intensive industries,” the analysts say.
The new study is the second to show how Public Staff’s modeling belie claims from SB 266 proponents that the bill will save money and promote more power generation.
Late last month, three researchers from North Carolina State University found that with fewer solar, wind, and nuclear plants as projected by Public Staff, Duke would have to burn almost 40% more natural gas between 2030 and 2050.
Under a worst-case but plausible scenario for gas prices, the trio found, customers could pay $23 billion more in fuel costs on their electric bills by midcentury as a result. The figure would cancel out projected consumer savings from building fewer new sources of generation, a fact not lost on the governor.
“My job is to do everything in my power to lower costs and grow the economy,” Stein said in a statement when he vetoed SB 266 early this month. “This bill fails that test.”
In his veto message, Stein also referenced another study, from EQ Research, showing the measure would make energy more expensive for North Carolina households.
“[SB 266] shifts the cost of electricity from large industrial users onto the backs of regular people,” Stein said. “Families will pay more so that industry pays less.”
Still, the findings from independent researchers and the three NC State professors may not be enough to counter the lingering narrative that SB 266, dubbed the Power Bill Reduction Act, will help customers.
Duke Energy and major industrial groups have lined up in support of the measure — the latter falsely suggesting that solar power investments have raised electric rates.
The North Carolina Chamber, the state’s major business lobby, says the bill’s enactment would provide “businesses and consumers with more affordable, predictable energy costs.” The group plans to include SB 266 in its annual scorecard rating legislators’ performances.
Perhaps most daunting for clean energy advocates and other bill opponents is that several Democrats appear swayed by these arguments. While Republicans have enough members to overrule Stein in the upper chamber, they’re one vote shy in the House. With all members present, that means the 11 House Democrats who previously voted for SB 266 would need a change of heart to uphold Stein’s veto.
House Speaker Destin Hall, a Republican from Caldwell County, says that won’t happen.
“I’m disappointed in the governor’s veto of the ‘Power Bill Reduction Act,’ which would have delivered cheap, reliable energy to North Carolina, cut the red tape that is choking innovation and long-term energy solutions, and saved consumers over $12 billion dollars,” Hall said in statement moments after Stein rejected the bill. “Considering the strong bipartisan support in both chambers, we anticipate overriding this veto.”
But Will Scott, Southeast climate and clean energy director for the Environmental Defense Fund, hopes the study will help change lawmakers’ minds.
“This shows that passing this legislation is going to have negative consequences for our ability to meet growing demand,” he said, “and that’s going to have knock-on economic impacts across the state.”
The rooftop solar industry is facing an unprecedented crisis. Utilities are cutting incentives. Major residential solar installers and financiers have gone bankrupt. And sweeping legislation just passed by Republicans in Congress will soon cut off federal tax credits that have supported the sector for 20 years.
But the fact remains that solar panels — and the lithium-ion batteries that increasingly accompany them — remain the cheapest and most easily deployable technologies available to serve the ever-hungry U.S. power grid.
Sachu Constantine, executive director of nonprofit advocacy group Vote Solar, thinks that the rooftop solar and battery industries can survive and even thrive if they focus their efforts on becoming “virtual power plants.”
Hundreds of thousands of battery-equipped, solar-clad homes across the country are already storing their renewable energy when it’s cheap and abundant and then returning it to the grid when electricity demand peaks and utilities face grid strains and high costs — in essence, acting as “peaker” power plants.
In places like Puerto Rico and New England, these VPPs have demonstrated their worth in recent months, preventing blackouts and lowering costs for consumers, and the approach could be scaled up dramatically. “If we do that, despite the One Big Beautiful Bill, despite the headwinds to the market, there is space for these technologies,” Constantine said.
Right now, there aren’t many other options for meeting soaring energy demand, he added. The megabill signed by President Donald Trump this month undermines the economics of the utility-scale solar and battery installations that make up the vast majority of new energy being added to the grid. And despite the Trump administration’s push for fossil fuels, gas-fired power plants can’t be built fast enough to make up the difference.
Meanwhile, the U.S. power grid has not expanded quickly enough, increasing the risk of outages and subjecting Americans to the burden of rising utility rates, Constantine said. State lawmakers and utility regulators are under growing pressure to find solutions.
Solar and batteries, clustered in small-scale community energy projects or scattered across neighborhoods, may be “the only viable way to meet load growth” from data centers, factories, and broader economic activity, Constantine said. And by relieving pressure on utility grids, they can help bring down costs not just for those who install them, but for customers at large.
This summer has brought new proof of how customers can turn their rooftop solar systems and batteries to the task of rescuing their neighbors from energy emergencies. Over the past two months, Puerto Rico grid operator LUMA Energy has relied on participants in its Customer Battery Energy Sharing program to prevent the grid from collapsing.
“Last night we successfully dispatched approximately 70,000 batteries, contributing around 48 megawatts of energy to the grid,” LUMA wrote in a July 9 social media post in Spanish. Amid a generation shortfall of nearly 50 MW, that dispatch helped avert “multiple load shedding events” — the industry term for rolling blackouts.
Puerto Ricans have been installing solar and batteries at a rapid clip since 2017, when Hurricane Maria devastated the island territory’s grid and left millions of people without power, some for nearly a year.
“There were tens of thousands of batteries already there that just needed to get connected in a more meaningful way,” said Shannon Anderson, a policy director focused on virtual power plants at Solar United Neighbors, a nonprofit that helps households organize to secure cheaper rooftop solar. “The numbers have been really proven out this summer in terms of what it’s been able to do.”
Puerto Rico’s VPPs are managed by aggregators — companies that install solar and battery systems and control them to support the grid. Tesla Energy, one such aggregator, provides live updates on how much the company’s Powerwall batteries are contributing to the system at large.
The impacts of distributed solar and batteries aren’t always so easy to track — but clean-energy advocates are busy calculating where they’re making a difference.
During last month’s heat wave across New England, as power prices spiked and grid operators sought to import energy from neighboring regions, distributed solar and batteries reduced stress on the grid. Nonprofit group Acadia Center estimated that rooftop solar helped avoid about $20 million in costs by driving down energy consumption and suppressing power prices.
A good portion of that distributed solar operates as part of the region’s VPPs. The ConnectedSolutions programs run by utilities National Grid and Eversource cut demand by hundreds of megawatts during summer heat waves. And Vermont utility Green Mountain Power has been a vanguard in using solar-charged batteries as grid resources at a large scale, in concert with smart thermostats, EV chargers, and remote-controllable water heaters. All told, that scattered infrastructure gives the company 72 extra megawatts of capacity to play with during grid emergencies.
Mary Powell, who led Green Mountain Power’s push into VPPs before that term had caught on, left to become CEO of Sunrun, the country’s largest residential solar installer, in 2021. Choosing to hire Powell indicated the company’s growing interest in becoming something of a solar-powered utility.
This summer, Sunrun dispatched hundreds of megawatts from more than 130,000 batteries across California, New York, Massachusetts, Rhode Island, and Puerto Rico. It recently expanded into Texas’ competitive energy, in partnership with Tesla.
“We are living in the future of virtual power plants in places like Puerto Rico, and California, and New England, and increasingly Texas,” said Chris Rauscher, Sunrun’s head of grid services and electrification. “It’s just about other states putting that in place in their territories and letting it run.”
Sunrun, Vote Solar, and Solar United Neighbors have been working for the last year to advance state policies that support VPPs. So far this year, the groups have promoted model VPP legislation in states including Illinois, Minnesota, New Mexico, Oregon, and Virginia.
In May, Virginia passed a law requiring that utility Dominion Energy launch a pilot program to enlist up to 450 megawatts of VPP capacity, including at least 15 MW of home batteries, Anderson said.
The legislative effort has had less luck in New Mexico and Minnesota, where bills failed to advance, Anderson said. In Illinois, a proposed bill did not pass during the regular legislative session, but advocates hope to bring it back for consideration during the state’s “veto session” this fall, she said.
A lot more batteries are being added to rooftop solar systems in Illinois, Anderson noted — a byproduct of the state clawing back net-metering compensation for solar-equipped customers starting this year. Similar dynamics have played out in Hawaii and California after regulators reduced the value of solar power that customers send back to the grid, making batteries that can store extra power and further limit customers’ grid consumption much more popular.
Rooftop solar advocates have fought hard to retain net-metering programs across the country. But Jenny Chase, solar analyst with BloombergNEF, noted that most mature rooftop solar markets have shifted away from rewarding customers for sending energy back to the grid at times when it’s not needed.
“In some ways that’s justified, because net metering pushes all responsibility and cost of intermittency onto the utility,” she said.
VPPs flip this dynamic, turning rooftop solar and batteries from a potentially disruptive imposition on how utilities manage and finance their operations to an active aid in meeting their mission of providing reliable power at a reasonable cost. Utilities have traditionally been leery of trusting customer-owned resources to meet their needs. But under pressure from lawmakers and regulators, they’re starting to embrace the possibilities.
In Minnesota, utility Xcel Energy has proposed a “distributed capacity procurement” program that would allow it to own and operate solar and batteries installed at key locations, letting the company defer costly grid upgrades. Rooftop solar advocates have mixed feelings about the proposal, given their longstanding complaints about Xcel’s track record of making it more difficult for customers and independent developers to build their own solar and battery systems.
Similar tensions are at play in Colorado, where Xcel is under state order to build distributed energy resources like rooftop solar and batteries into how it plans and manages its grid. This spring, Xcel launched a project with Tesla and smart-meter company Itron aimed at “taking these thousands of batteries we have connected to this system over time and [being] able to use them to respond to local issues,” Emmett Romine, the utility’s vice president of customer energy and transportation solutions, told Canary Media in an April interview.
But waiting for utilities to deploy the grid sensors, software, and other technology needed to perfectly control customers’ devices runs the risk of delaying the growth of VPPs, Anderson said. Simpler approaches like those being taken in Puerto Rico — where aggregators manage VPPs — can do a lot of good quickly. “Once you get that to scale, there will be a lot of learnings for the next stage,” she said
State- and utility-level incentives that encourage individuals to participate in VPPs are also a vital countermeasure against the damage incurred by the “big, beautiful bill” passed by Republicans this month, Anderson said. Under that law, households will lose a 30% tax credit that offsets the cost of solar, batteries, and other home energy systems by the end of this year.
However, companies such as Sunrun and Tesla will retain access to tax credits for solar systems that they own and provide to customers through leases or power purchase agreement structures, as long as they begin construction by mid-2026 or are placed in service by the end of 2027. And tax credits for batteries remain in place until 2033 for these companies.
VPP programs can’t make up for the loss of the tax credit for customers who haven’t yet installed solar or batteries, Anderson said. But by financially rewarding participants, they can help consumers recoup initial costs, she said, as long as they aren’t hampered by ineffective state policies.
“Folks can earn over $1,000 a summer through [some VPPs],” she said. “You couple in the leasing model for solar and storage, which is going to get a little more popular in the aftermath of the bill,” due to its ability to continue to earn tax credits, “and I think it’s a pretty good way to get batteries for low or no cost up front.”
A contested solar agrivoltaics project avoided having its permit denied by Ohio regulators, likely thanks to the neutral stances of a county board and one of its townships.
The Ohio Power Siting Board approved construction of the 120-megawatt Frasier Solar project late last month despite local groups’ organizing efforts, which led the other township within the project’s 840-acre footprint and a neighboring township to pass anti-solar resolutions. The power siting board has found that unanimous local government opposition was reason enough to decide other solar projects did not meet a public interest requirement under state law. One of those cases is before the Ohio Supreme Court.
In the Frasier case, however, local governing bodies for Knox County and Clinton Township stayed neutral. Knox County voted unanimously in 2023 to accept a payment arrangement instead of property taxes, which will add more than $40 million for local governments over the project’s 40-year useful life, but it took a neutral position on the project itself.
About six months after an evidentiary hearing — basically an administrative trial — on Frasier Solar, Knox County restricted new solar projects within most of its boundaries. However, legal counsel for the Ohio Ethics Commission found that a conflict of interest prevented Drenda Keesee, a newly elected Knox County commissioner, from taking official action against Frasier Solar because she owned property next to the project site. Another county commissioner served as an ad hoc power siting board member for the Frasier decision, so he could not take a position before hearing the case. He wound up voting with the board’s majority to grant the permit.
Prior to the administrative trial, Clinton Township’s board had clarified that despite an anti-solar position for future projects, it was officially neutral on Frasier Solar.
“We had a very small dog in the fight,” Clinton Township Trustee Jay Maners told Canary Media, noting that most of the project will be in Miller Township. He recalled that there was sparse attendance at early trustee meetings when the project was discussed, with most in favor of it. Then “everything exploded” with people suddenly voicing opposition, he said.
“There was a lot of misinformation,” Maners said, such as solar opponents falsely claiming tax dollars would pay for the project, and solar proponents warning about rising energy prices.
The Ohio Power Siting Board’s June 26 ruling discussed Clinton Township’s neutral stance on Frasier Solar, as well as that of Knox County, to stress that local government opposition was not unanimous. The board found that the project was in the public interest and approved the permit.
Supporters are celebrating the win for Frasier Solar but worry about how much the power siting board focused on whether local government opposition was unanimous. That leaves solar energy vulnerable to a standard that depends on potentially arbitrary local government rulings, rather than regulatory experts’ judgment of projects’ merits.
Frasier Solar is exempt from parts of Senate Bill 52, a 2021 law that lets counties block large solar and wind projects before they get to the power siting board. Yet its developer, Open Road Renewables, faced substantial local opposition and misinformation, much of which was stoked by a dark money group with multiple connections to fossil fuel interests and the anti-solar speakers it brought in. Opponents also went to local township meetings to push for anti-solar resolutions.
The staunch local opposition and involvement of fossil fuel interests fit a pattern playing out across the country. The Sabin Center for Climate Change Law at Columbia University last month reported a 32% jump in the number of contested projects for 2024 compared with 2023.
Only within the past few years have state regulators used unanimous local government opposition as a reason to kill proposed solar projects. Those projects, like Frasier, were otherwise exempt from parts of the 2021 law. But Ohio regulations don’t contain such a rule. Another part of Ohio law appears to say that local government consent isn’t a condition for siting decisions.
“I’m certainly happy to see this project move forward, and it had every reason to move forward,” said Dan Sawmiller, Ohio energy policy director for the Natural Resources Defense Council. Yet he questioned what the role of the power siting board is if it lets unanimous local opposition control whether projects go ahead.
“They’ve got the goal post cemented in, and it’s in the wrong location,” Sawmiller said. As he sees it, the board and its staff have a responsibility to use their expertise to make decisions in the public interest for the whole state.
It’s also hard to fact-check local government resolutions, said Heidi Gorovitz Robertson, a Cleveland State University law professor who testified as an expert witness for the Ohio Environmental Council. Those decisions could be based on misinformation or simply be a response to political pressure, with little focus on the factual basis for objections.
Frasier Solar became “known nationally as part of a case study on how the fossil fuel industry stokes opposition to renewable energy projects,” said Dave Anderson, policy and communications director for the Energy and Policy Institute, a watchdog group on utility and fossil fuel influence.
Testimony at the administrative trial revealed that an anti-solar group called Knox Smart Development had big financial backing by Tom Rastin, who has been a leader of the Empowerment Alliance, an anonymously funded group that promotes the natural gas industry. Rastin is a former vice president of Ariel Corp., which makes equipment for the oil and gas industry.
Anti-solar media flourished throughout the area during the permitting process too. An eight-page Ohio Energy Reporter sent by bulk mail consisted mostly of anti-solar advertorials. Anti-solar stories and ads also ran in outlets such as the Mount Vernon News, which ProPublica described as a conservative “pink slime” publication.
Evidence introduced by the developer last summer characterized some of the opposition’s publicity as “misinformation campaigns,” which the power siting board noted in its opinion.
Nonetheless, the project had an “encouraging level of support, both locally and from across the state,” said Craig Adair, vice president for development at Open Road Renewables. About 40% of those who spoke at local public hearings or filed comments favored the project.
More significantly, the siting board considered the merits of comments, not just the total numbers. In doing so, the board focused on Robertson’s testimony, which found that half of opponents’ unique arguments at local hearings were factually inaccurate or unsupported by evidence. About a third were already addressed by permit conditions, and nearly one-tenth were just subjective opinions, she also found.
“The happy news is that the siting board and the staff weren’t snowed by the number of opposing comments,” Robertson told Canary Media. “We really were able to take the wind out of their sails on the vast majority of the negative comments.” A similar analysis may help in future cases, she suggested. “We can’t let truth and facts disappear. We have to keep pushing what is real.”
The board’s ruling also noted evidence provided by chapters of the International Brotherhood of Electrical Workers about jobs and other positive economic benefits. Additional experts for the Ohio Environmental Council described how the solar farm and revenue from it could help local governments deal with climate change impacts.
“Given the risks Ohio faces from climate change, the board’s review of any application is incomplete without considering impacts,” said Karin Nordstrom, one of the Ohio Environmental Council’s lawyers in the case.
Adair welcomed the other parties’ supporting evidence and said he hopes to see the same level of scrutiny in future cases. “As long as the board continues to review projects on their merits and not fall prey to the misinformation, it’s encouraging,” he said.
Still, solar and wind projects continue to face hurdles under state law that don’t apply to fossil fuels. While counties now have the power to block most large solar and wind projects, local governments can’t even enforce zoning restrictions against oil and gas development.
“A lot of businesses are going to say, ‘I’ll take my investment elsewhere,’” Adair said. And while some projects like Frasier may get approval, the combination of SB 52 and other deference to local governments “is going to leave you vulnerable to getting the supply that you need on the grid,” he added.
An enormous array of over 750,000 solar panels blankets the prairie landscape in Pueblo, Colorado, providing clean energy to one of the largest electricity-based steel mills in the country.
The Rocky Mountain Steel mill, which opened in 1881, today uses electricity instead of coal to produce steel rails and pipes. In late 2021, it became the first and largest solar-powered steel plant in the United States — and possibly the world — when electricity began flowing from the 300-megawatt Bighorn Solar project next door, supplying roughly 90% of the power used by the facility’s electric arc furnace.
The storied steel mill recently marked a different kind of milestone. Atlas Holdings, a private-equity firm in Connecticut, said last month that it plans to acquire Evraz North America, which owns the facility in Pueblo as well as steelmaking operations in Portland, Oregon, and Western Canada. The sale is expected to close later this year.
“This [is] a major investment in creating a more vibrant domestic steel production industry right here in the United States and Canada,” Sam Astor, a partner at Atlas, said in a June 27 news release.
The deal, which could reach up to $500 million, arrives at a complex moment for U.S. steelmakers working to decarbonize their facilities.
Recent U.S. efforts to build cutting-edge, low-emissions ironmaking facilities that use green hydrogen — made with renewable power — have all but vanished due to challenging economics and shifting political tides. Building large clean-energy projects like Bighorn Solar to power industrial sites just got much harder to do under the megabill that President Donald Trump signed into law this month, which slashes incentives for and imposes restrictions on wind and solar.
At the same time, the nation’s steel industry is slowly getting cleaner as manufacturers invest in new capacity that relies on electricity and fossil gas, not coal. And Rocky Mountain Steel is no longer the country’s only solar-powered steel plant. U.S. Steel’s Big River Steel mill in Arkansas draws from the 250-MW Driver Solar project, while steelmaker Nucor Corp. has a deal to buy 250 MW of power from the Sebree Solar farm under construction in Kentucky.
Steel is an essential material used to make everything from railroads, bridges, and buildings to solar-panel racks, electric vehicles, and grid components. Producing the high-strength metal is currently an extremely dirty business, responsible for as much as 9% of global carbon dioxide emissions and a significant amount of harmful local air pollution.
That’s because most steel production globally involves burning copious amounts of coal in a blast furnace to turn raw iron ore into iron; the iron is then made into steel in a separate furnace. The United States still operates a dozen blast furnaces, which account for roughly 30% of the country’s annual steel production.
The remaining 70% of U.S. steel output comes from electric arc furnaces, including the hulking unit at Rocky Mountain Steel’s facility, which is capable of producing 1.1 million tons of steel per year. These power-hungry furnaces turn scrap metal into a glowing orange liquid that is then transformed into recycled steel parts.
Producing steel this way can curb CO2 emissions by up to 75% compared to traditional coal-based methods, according to industry research. However, the carbon intensity of steel made in an electric arc furnace depends on the electricity used — and most of the 100-plus such facilities operating in the U.S. rely primarily on coal- and gas-fired electric grids.
Until a few years ago, Rocky Mountain Steel got its power from Xcel Energy’s coal-fired power plant in Pueblo.
Lightsource bp financed, owns, and operates the neighboring $285 million Bighorn Solar project. The developer sells the electricity it generates to Xcel under a 20-year power purchase agreement; the utility then provides power to Evraz North America for the steel mill. When the 1,800-acre solar array came online in late 2021, Bighorn became the nation’s largest on-site solar facility dedicated to a single customer.
“This project proves that even hard-to-abate sectors like steel can be decarbonized when companies come together with innovative solutions,” Kevin Smith, who was then the CEO of Lightsource bp, Americas, said in an October 2021 press release. The fixed-rate power agreement gives the mill’s owner “the low, predictable electricity prices it needs to stay in Pueblo and invest in its future there, keeping more than 1,000 jobs in the local community,” according to the release.
Evraz North America first announced plans to sell its assets in August 2022 after its parent company, Evraz plc, was sanctioned by the British government following Russia’s invasion of Ukraine. Evraz plc is part-owned by a Russian oligarch.
Atlas Holdings, the firm acquiring Evraz North America, didn’t immediately return questions this week about whether the sale would affect the solar-power agreement in Pueblo. However, Atlas noted in its June 27 news release that the “Pueblo steel mill stands as a remarkable testament to commitment to sustainability” owing to the solar project.
The American solar manufacturing renaissance was charging ahead. Then President Donald Trump took the reins.
Since Trump resumed occupancy of the White House, promising to bring back manufacturing jobs, new investment in clean energy factories has plummeted from its Biden-era highs, and factory cancellations have surged instead. Now, with Trump’s signing of the One Big Beautiful Bill Act earlier this month, things are about to get even rockier for clean energy manufacturers — but several of the leading firms reshoring solar panel production still see reasons for qualified hope.
That’s not to say the path ahead will be easy. The law swings a battle-axe through the clean energy incentives that were carefully crafted by Democrats in the 2022 Inflation Reduction Act. Solar and wind deployment credits will disappear after 2027. Now, the U.S. will install somewhere between 57% to 62% less clean energy from 2025 to 2035, per a new analysis by Rhodium Group. That’s bad for all the customers and industries who will need vastly more electricity over that timeframe — not to mention the climate — but it also portends a shrinking market for American manufacturers to sell into.
“It’s a massive self-inflicted wound,” said Sen. Jon Ossoff (D-Ga.), an architect of the original clean energy manufacturing policy. “This law is a targeted attack on the advanced energy industry. It will hamstring industrial development; it will undermine energy independence and drive up energy costs by interrupting the development and installation of new generation capacity.”
But for manufacturers who have kickstarted a stunning reshoring of the solar supply chain after years of decline, the legislation’s final form is not nearly as dire as some earlier drafts. Chiefly, Republicans preserved the flagship manufacturing credit, which pays a company for each unit they make of key clean-energy components.
“Because manufacturing and job creation has always been a highlight of all politicians, independent of their party, that part has not been touched,” said Martin Pochtaruk, CEO of Heliene, which runs 1.3 gigawatts of domestic module production in Minnesota. However, the new law “has axed the businesses of many of our clients two years out, so it will require a lot of work by a lot of people to reshuffle how their businesses are run, and how they finance.”
The one major change the law did make to the manufacturing tax credit was to add in “foreign entity of concern,” or FEOC, restrictions, a whole new bureaucratic regime that polices companies’ corporate or supply-chain ties to China. New FEOC restrictions also apply to energy projects, and they actually resemble policies several domestic manufacturers have been requesting for years.
Take the case of T1 Energy, a solar manufacturer currently churning out 12,000 modules a day outside Dallas, on track for up to 3 gigawatts produced this year. Chinese giant Trina Solar actually built the factory but sold it to T1 (formerly known as Freyr Battery) in December, such that it is now operating under the control of a U.S.-based firm traded on the New York Stock Exchange. The company’s executive vice president for strategic communications, former longtime Wall Street Journal energy correspondent Russell Gold, called the law’s FEOC measures “good policy.”
“It promotes U.S. ownership and control of solar manufacturing and solar production,” Gold said. “Given how important solar is becoming on our power grids, that’s totally appropriate.”
Dean Solon, the billionaire solar entrepreneur who has manufactured connectors and cabling systems in Tennessee since the dawn of the modern solar industry, seemed unconcerned when I asked him in June about whether the new FEOC rules were too stringent.
“FEOC? Isn’t that a shitty little Italian car?” he responded.
For now, solar manufacturers that have factories operating or nearly operational can squint and see a good few years ahead while the tax credits are still accessible, though after that, it’s anybody’s guess. Companies that were about to commit to the multiyear effort to build new factories, however, just got an undeniable signal from Congress to take their jobs and economic dynamism elsewhere.
“The hill’s a lot steeper than it was before this for those kinds of investments,” said Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition.
Somewhat improbably, Trump’s signature policy effort let the Biden-era 45X clean energy manufacturing credit continue as planned before phasing down after 2030 and stopping entirely in 2033 (except for wind manufacturing, which got whacked with an early end).
Unlike the earlier House version, Gold noted, the law preserves transferability, which lets factories monetize their credits when they lack sufficient tax burden themselves; factories cost a lot up front before they start making money, so this is especially useful in their early years. Factories almost lost stackability, which guarantees credits for companies that produce several steps of the supply chain, but the final text preserved that, Gold added.
“When you look at 45X, which is what solar manufacturers do receive, it is exactly like what was included in the Inflation Reduction Act and proposed by Sen. Ossoff in the Build Back Better days,” Pochtaruk said.
That has direct implications for a solar cell factory Pochtaruk was developing somewhere in the U.S. but put on hold after the election as he waited to see if 45X would survive. Now that its fate is clear, Heliene can return to developing that factory, if the company determines it still makes sense in the new market landscape.
The major lingering concern for solar manufacturers is what happens next with their customers. The law, after all, attacks the demand-side credits that were designed to stimulate purchases of made-in-America solar products.
The early demise of the solar deployment credits will hit manufacturers in two major ways.
First, with the stroke of Trump’s pen, the amount of clean energy projects expected to come online in the U.S. over the next decade just dropped. Demand for the American factories that opened up to serve that market just took a commensurate hit. Americans pay a lot more for solar panels than the rest of the world, due to the trade protectionism in place to help factories here; thus, U.S.-made solar is for U.S. consumers, and can’t readily export to foreign markets if domestic demand suddenly drops.
Second, in destroying the solar deployment credits, Republicans also eliminated the domestic content adder, a bonus incentive that encouraged developers to pick domestic equipment over cheap imports.
“They removed the key incentive driving investment in American manufacturing of solar technology,” Ossoff said. “Go ask the industry. This is a huge gift to the Chinese Communist Party, which will reinforce China’s stranglehold on the solar value chain.”
Marta Stoepker, a spokesperson for Qcells, which runs the largest solar-module factory in the U.S., located in Dalton, Georgia, corroborated the importance of that policy for encouraging domestic purchases.
“Policy levers like domestic content and trade are critical to ensuring U.S.-made solar can compete against China,” she said.
That said, the new megabill might leave a path for solar installations to continue at a healthy clip for the next five years. It’s the five years after that when solar could fall off a cliff.
Under the new law, solar developers need to start building their projects between now and July 4, 2026, to secure the full 30% investment tax credit. (If they start after that date, arrays must be placed in service by the end of 2027.) Starting Jan. 1 next year, companies will also need to meet the newly written FEOC rules that limit the amount of Chinese-produced materials in a power plant. As far as the IRS is concerned, developers have officially started building once they begin physical construction or buy 5% of the overall capital cost of the project — say by purchasing transformers or inverters. Then, under what’s called safe-harboring rules, developers have four years from the end of that year to finish the project, provided they show continued progress.
That timeline, then, could support something close to the recent high level of solar deployment into 2030, which would be great for newly minted factories that need a little more time to get their footing. Qcells is racing to finish a new factory in Cartersville, Georgia, that will produce 3.4 gigawatts of panels and the cells and wafers that go into them. T1 is still ramping up to its full capacity of 5 gigawatts.
If the market follows the pattern from previous times Congress was set to end solar incentives, developers will rush to safe-harbor projects before the deadline, fast-tracking work that could have been spaced out over the next few years. Then they’ll have several more years to buy the rest of the project equipment, giving domestic factories more time to spin up.
Nonetheless, factories will have to navigate upheaval among their customers in the mad dash to lock in these incentives. Larger developers can afford to hustle and start a number of projects in the next year to secure the full tax credit. Smaller developers typically finish and sell projects to finance their next efforts, a strategy that could be foiled by this truncated timeline.
“There is going to be consolidation, because the larger entities will buy out projects developed by smaller ones that cannot continue to bring them forward,” said Pochtaruk.
Besides the impending blows to domestic demand, a few other variables could skew the fate of the solar manufacturing renaissance.
For one thing, manufacturers will have to navigate the new FEOC rules themselves, proving they are not beholden to China in order to claim the 45X manufacturing credit. The firms who spoke with Canary Media said that, right now, doing so seems manageable, but a lot depends on how the final IRS guidance is written. The Treasury Department has until the end of 2026 to issue rules, according to the budget law.
Despite the uncertainty, some are very confident they’ll make do.
“Our optimism comes from having spent the last six or seven months working through these issues,” said Gold, whose company moved to ensure U.S. control of the factory before Trump took office. “We could give a workshop on how to achieve compliance, by this point. We’re not going to, because we want a competitive advantage, but we could.”
Not everyone is so sanguine. One alarming scenario would be if the administration uses new FEOC rules to launch investigations into clean energy manufacturers or developers. Ossoff deemed that a clear danger.
“It’s the most corrupt administration in American history, and they will wield implementation as a political cudgel,” Ossoff said. “They’ll pick winners and losers based on political considerations.”
As if to underscore that exact point, the White House published an executive order last Monday that targets the very credits that Trump had signed into law three days prior. The order specifically raises the possibility of the Treasury Department “restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built.” Those safe-harbor rules are the same ones providing something of a lifeline to the American solar factories over the next few years. The solar industry is watching this measure intently to see how it affects the already-distorted outlook for the market.
“This is a longstanding, well-established set of practices,” Carr said of the IRS safe-harbor rules. If something happened to upend that established precedent, “basically everybody in the industry would sue pretty much immediately.”
Should manufacturers make it through the near-term turbulence, they’ll still have to figure out what happens to the solar market after the current tax credit-fueled runway peters out around 2030. That future could always involve a policy swing away from the current trajectory.
Over the last decade, solar tax credits have shown a Houdini-esque ability to bounce back from certain death through last-minute legislative maneuverings. But if this latest death proves more enduring, the industry will have to transition to a model that doesn’t revolve around monetizing tax credits. That change will be scary and uncertain for companies, but it would bring the U.S. market closer to the global norm.
“There will be no tax equity — there will be equity and debt, like on all projects in the rest of the planet,” Pochtaruk said. “There’s no tax credits in Chile, in South Africa, in Australia, in Namibia. Pick a country where solar is the most-deployed power generation source; [it’s happening] with no tax credits.”
Ongoing delays and disruptions to a federal rural energy program threaten to disproportionately impact Midwest farmers and Republican congressional districts, experts say.
For more than two decades, the Rural Energy for America Program (REAP) has helped thousands of farmers install solar, energy-efficient grain dryers, biodigesters, wind turbines, and other cost-saving clean energy improvements.
Since 2014, Illinois has benefited more than any other state, with over $140 million in REAP grants, according to federal data obtained by the Chicago-based Environmental Law & Policy Center through a public records request.
Minnesota, Iowa, Michigan, and Ohio are also in the top 10 states receiving grants during that period. REAP proponents say the numbers show what’s at stake as the program faces chaos and uncertainty under the Trump administration.
“It’s popular with all different stripes — not just political stripes, any type of farmer,” said Lloyd Ritter, who helped draft the program as senior counsel for former Sen. Tom Harkin (D-Iowa). “It could be poultry, corn, soybeans, wheat — everybody benefits because the program is so flexible and innovative, you can utilize the program for your type of needs in your area.”
Carmen Fernholz and his wife are among the success stories. The couple has run an organic farm in Minnesota for more than 50 years. Last summer Fernholz used a REAP grant to install a 40-kilowatt solar array. It powers everything on the farm from the electric lawnmower to the heating, and over the last year he’s earned an additional $600 a month on average by sending electricity on the grid back to his rural electric cooperative.
Since 2014, REAP has provided more than $1.2 billion for more than 13,000 solar projects, making up about 70% of the total REAP dollars. More than $292 million went to energy efficiency, including for windows, lighting, heating, and efficient grain driers. Millions more were awarded for biogas, biomass, biofuels, wind energy, hydroelectric power, and other projects.
This has created crucial energy savings and revenue for farmers, as well as important business for solar developers, energy-efficiency auditors, and various types of contractors. Farmers raising livestock and poultry and growing corn, soy, and other crops are the most common recipients of REAP, but funds have also gone to small rural businesses including distilleries, breweries, a car wash, a mental health clinic, a newspaper publisher, and a moving company.
More than 75% of the grants went to congressional districts represented by Republicans. Ritter noted that REAP was a deeply bipartisan effort from the start, led by both Harkin and former Republican Sen. Richard Lugar of Indiana.
“These are their voters,” Ritter said of Republican leaders. “The thing that is so great about REAP is it lowers energy costs and saves farmers money, which ties into the [Trump administration] agriculture secretary’s recent announcements about building rural prosperity and farm security.”
The program was turbocharged by the 2022 Inflation Reduction Act (IRA). Under the federal Farm Bill, REAP grants covered up to 25% of a project’s costs. The IRA created an additional funding source and allowed grants to cover up to 50% of a project’s cost.
More than $1 billion in REAP grants have been promised (or “obligated”) under IRA in just the past two years, while since 2014, Farm Bill REAP grants have totaled $623 million.
More than 80% of the IRA REAP grants — totaling $818 million — were awarded to solar projects, more than 5,000 of them nationwide. Those arrays are expected to generate over 8,000 gigawatt-hours of clean energy annually, according to the federal data.
REAP grants are paid as reimbursement after a project is completed. About $770 million worth of IRA-funded REAP grants have not been paid out yet, according to the data. That’s not surprising given that projects may still be under construction, but after President Donald Trump froze IRA funds earlier this year, some farmers and clean energy advocates are worried about whether promised grants will be paid in full.
Andy Olsen, senior policy advocate for the Environmental Law & Policy Center, has done extensive data analysis on REAP. Given the Trump administration’s hostility toward clean energy, he wonders what REAP will look like in the future.
“Will they support solar and wind projects?” Olsen asked. “This is a crew that likes refineries, likes ethanol, big centralized energy technologies. I could see them only making awards to biomass, ethanol, maybe some energy efficiency.”
In addition to grants, REAP provides loan guarantees for projects. That money does not go directly to the recipient, but the guarantee helps them secure private financing since the government promises to back up the loan if the recipient were to default. More than $3 billion worth of loan guarantees have been made under REAP since 2014, the data shows.
While the majority of REAP grants go to solar and energy efficiency, REAP has also obligated over $115 million to biogas, biofuel, and biomass projects; over $12 million to wind; and more than $8 million each to hydroelectric and geothermal projects.
Battery projects are also eligible for REAP, though only a few of those grants have been made thus far.
Fernholz, the farmer in Minnesota, hopes he can tap such a grant in the future. “The next step for people like myself should be looking at energy storage,” said Fernholz, who grew up on his parents’ farm as one of nine siblings.
He uses sustainable practices like conservation tillage and a tiling system to keep water from running off into nearby rivers. He also has 100 acres of native grassland and wetlands in a conservation reserve program. Solar is a major contribution to these efforts.
“When the REAP grant came through, that was a blessing, the frosting on the cake,” Fernholz said.
A recent U.S. Department of Agriculture policy document, which outlines a strategy to “Make Agriculture Great Again,” says that going forward, REAP will disincentivize solar on “productive farmland.” Ritter is worried that means few ground-mounted solar arrays will receive grants, though he imagines panels on barn and farmhouse rooftops will still be awarded.
“I can understand there are some concerns about the loss of farmland. It’s an emotional issue,” Ritter said. But he notes that housing development is the largest cause of farmland loss. Indeed, the American Farmland Trust reported in 2022 that between 2016 and 2040, the country is on track to convert over 12 million acres of farmland and ranchland to low-density residential development, like scattered houses and subdivisions with big lots. (Another roughly 6 million acres could be lost to higher-density residential development, commercial buildings, and industrial sites, the trust says.)
Ritter said installing solar can actually help prevent such conversions, by providing farmers revenue and energy savings that increase the financial viability of their farms. Meanwhile, agrivoltaic practices — like grazing livestock between rows of panels — mean solar and farming can coexist.
“There are a lot of great ways to do solar on prime farmland,” Ritter said. “You can build energy dominance and farm at the same time.”
Since 2009, Bill Jordan has helped close to 100 farmers write REAP grants to install solar with his company Jordan Energy in upstate New York.
“Electric bills are always in the top 10 expenses of running a farm business,” said Jordan. “Any business that’s going to run itself well will look at those costs. Behind-the-meter solar is a way of offsetting the cost of your own electricity, and it’s a wise diversification of farm revenue.”
Jordan said he has met “farmers who are milking 150 cows and making more money on the solar farm than on milk production. It’s also a diversification that the next generation gets. As farmers do family succession planning, the younger generation gets excited about solar.”
Jordan hopes solar funding under REAP doesn’t diminish because of partisan politics, emphasizing that it drives solar manufacturing and installation jobs along with helping farmers.
“These are good American jobs,” he said. “Let’s not throw out the baby with the bathwater. Creating energy independence is really what this is about.”
June was a monumental month in the European Union: For the first time ever, it got more electricity from solar power than any other source.
Solar provided 22.2% of the region’s electricity, per clean-energy think tank Ember, unseating nuclear and beating out gas and coal combined. Between nuclear, wind, hydropower, and solar, nearly three-quarters of the EU’s power came from completely carbon-free sources.
It’s a striking illustration of how far solar power, and clean energy as a whole, have come in the EU.
A decade ago, solar contributed just 3.5% of the region’s power while coal supplied 24.6%. Those energy sources are now on pace to essentially trade places. Across all of last year, solar beat out coal for the first time as more and more EU member states shutter their polluting coal-fired power plants. The results speak for themselves: Power sector emissions declined by 41% between 2015 and the end of last year.
Europe has been in hyperdrive with clean energy since Russia invaded Ukraine in 2022, destabilizing the region’s main supply of affordable natural gas and sending gas prices soaring. Since then, for reasons of energy security as much as climate consciousness, the EU has made a concerted effort to ditch fossil fuels even faster and rely more on carbon-free energy sources that can be controlled locally.
That push has helped drive fossil-fueled generation to record lows on the region’s power grid. June was coal-fired power’s worst month ever in the EU, accounting for just 6.1% of electricity, largely thanks to Germany and Poland, the bloc’s two biggest coal consumers, burning comparatively small amounts of the fossil fuel. Meanwhile, solar smashed records in at least 13 of the EU’s 27 member states last month.
The milestone comes as the U.S. under the Trump administration moves backward on clean energy. Earlier this month, President Donald Trump signed into law the One Big, Beautiful Bill Act, which will rapidly phase out subsidies for solar and wind energy. Last week, his Energy Department released a controversial report that experts say will likely be used to justify extending the life of aging, uneconomical coal-fired power plants.
While the Trump administration seeks to tether the U.S. to fossil fuels, Europe and much of the world continue accelerating toward cleaner options.
On Tuesday, the president summoned leaders from tech, energy, and finance to Pittsburgh — that Silicon Valley of western Pennsylvania, a veritable Menlo Park on the Monongahela — where executives gushed about Trump’s apparent leadership as if their survival on a dating show depended on it.
At the summit, the industry offered some new insight into how it is thinking about a key question it faces, namely how AI companies are going to find the electricity to fuel their exponential growth. Hint: The answer might not be solar, wind, and batteries.
Investment firm Blackstone, for instance, unveiled a $25 billion strategy to build data centers alongside fossil gas power plants in Pennsylvania, which is rich in natural gas that’s hard to export elsewhere. Loading up the Keystone State with data centers could thus boost the fracking industry, which has plateaued in recent years.
Google brought its own major commitment, but with a clean twist: The tech giant will work with Brookfield Asset Management to relicense a pair of Pennsylvania hydropower plants to funnel up to 3 gigawatts of clean power to data centers in the region for 20 years.
The splashy announcements follow one from Microsoft last fall, in which the tech giant said it plans to bring back a reactor at Three Mile Island (the quietly retired one, not the one that had those problems you may have heard about) and use its output to power computing operations. No nuclear reactor has ever been restarted in the country, though a few restarts are in progress now.
There’s something other than Pennsylvania’s energy-rich geography connecting these three AI-energy plays: They’re banking on big, old-school, slow-moving energy projects to keep pace with the propulsive sprint of AI.
While gas is the No. 1 source of electricity in the U.S., new plants can’t be spun up quickly; top-tier turbine suppliers have warned of multi-year backlogs for that key ingredient. As for hydropower, new construction of major generators has stagnated for decades. Nuclear construction has shown more signs of life, but barely: Two new reactors were started and finished in the last 30 years, way behind schedule and massively over budget.
Meanwhile, the U.S. has been churning out gigawatts of new solar and battery installations, especially in Texas, where free markets reign and jealous incumbents have fewer tools to eliminate competition.
But Trump’s new budget bill whacked the solar and wind sector and threw new foreign-content restrictions at the grid storage industry. Analysts at the Rhodium Group think the budget law will eliminate about 60% of the clean power capacity we would have built in the next 10 years.
The law, then, is manufacturing energy scarcity at the moment when AI tycoons need abundance. Perhaps the long-lead-time technologies of bygone decades will shrug off their sluggishness and meet the moment. But history suggests that’s a risky thing to depend on for the nation’s tech dominance.—Julian Spector
Rural energy funding in turmoil
For over two decades, the Rural Energy for America Program, or REAP, has helped farmers and rural businesses save on energy costs, ranging from installing solar panels to buying more efficient grain dryers. The program has given out billions of dollars in grants and loans in its lifetime, and was infused with another $2 billion by the Inflation Reduction Act in 2022 — but now the Trump administration has cast uncertainty over the future of REAP, Kari Lydersen reports for Canary Media.
After taking office in January, Trump froze over $1 billion in REAP funds. Then, on July 1, the USDA abruptly canceled a grant application window for the program. The administration has also explicitly said it wants the program to deemphasize its most popular function: helping farmers afford solar. Farmers are concerned about the upheaval with the popular program, which, as Kari reports in a second story, largely benefits Republican congressional districts.
Consumers could lose big as Trump pushes fossil fuels
Twice now, Trump has ordered aging fossil-fueled power plants to stay open right as they were about to close. These directives, which energy experts agree are unnecessary, could cost consumers tens or even hundreds of millions of dollars — and some fear Trump might just be getting started, Jeff St. John reports for Canary.
Last week, Trump’s Energy Department released a report that experts say relies on flawed math to bolster the case for keeping old coal-fired power plants online past their planned closure dates. Experts fear the administration will use this report to justify additional orders like the two Trump has already made. If that happens, Jeff reports in a second story that it would be disastrous for Americans, potentially costing them billions of dollars in extra energy costs all to prop up expensive, polluting energy infrastructure that the grid doesn’t need.
Use it or lose it: The GOP megalaw sunsets tax credits that make it cheaper to do things like install solar, get a heat pump, or buy an EV, meaning consumers must act quickly to lock in discounts. (Canary Media)
Radioactive rubber stamp: Sources say a Department of Government Efficiency representative told high-level Nuclear Regulatory Commission officials in May to “rubber-stamp” new nuclear reactor designs. (Politico)
A breath of fresh air: Window-unit heat pumps perform well on key metrics like cost, ease of installation, and customer satisfaction, according to a new report examining their deployment in New York City public housing. (Heatmap)
Power-line politicking: Sen. Josh Hawley, a Missouri Republican, says he has secured a commitment from the Energy Secretary to cancel a $4.9 billion federal loan to build the Grain Belt Express transmission line, which would carry as much as 5 gigawatts of wind power from Kansas to other states. (New York Times)
Clean and carefree: Even after the GOP’s new law phases out subsidies for solar and wind in the U.S., the energy sources are “economically unstoppable,” a report from Columbia Business School finds. (news release)
Take me home, solar roads: A 5-MW solar canopy proposed for a two-mile stretch of highway median in Lexington, Massachusetts, would be the first such project in the country; developers are confident construction will begin in time to take advantage of expiring federal tax credits. (Lexington Observer)
Ohio’s OK: A major solar project in Ohio receives state approval despite strong local opposition and fossil-fuel-funded misinformation. (Canary Media)
Offshore headwinds: The U.S. EPA declares that Maryland environmental regulators last month improperly issued a permit for the US Wind project off the state’s coast, but Democratic Gov. Wes Moore says he is determined to push forward with offshore wind despite federal challenges. (WBFF)
Emily Walker has been tracking the damage the Republican megabill will do to a solar industry that’s helped roughly 5.4 million households put panels on their rooftops. It isn’t pretty.
“This is a net harm for the industry, especially for the long-tail installers and the small local businesses that have built this industry from the ground up,” said Walker, the director of content and insight at EnergySage.
While big national solar installers like Sunrun get a lot of attention, the majority of the U.S. home solar market is made up of smaller companies, ranging from regional installers to mom-and-pop businesses, she said.
These regional and local companies, often referred to as the “long tail” of the U.S. rooftop solar business, use EnergySage’s online solar marketplace to reach prospective customers and can expect to bear the brunt of the cuts to federal incentives cuts in the law passed by Republicans and signed by President Donald Trump earlier this month.
At the end of 2025, an incentive that’s helped offset the cost of rooftop solar for two decades will disappear. For all but a brief period in 2020, the Residential Clean Energy tax credit, known as 25D for its place in the tax code, has shaved 30% off the cost of a residential solar system, whether homeowners buy it for cash or finance it via a loan. That equates to about $8,400 that a household can save on a typical 11-kilowatt, $28,000 rooftop solar system.
Losing the tax credit will erode the economic benefits of solar, putting it out of reach for many homeowners and making it less valuable to those who can still afford it. It will take the average household several years longer to break even on their rooftop solar investment without the incentive in place.
“Fewer people will be able to go solar, and they will not be able to benefit from the energy cost savings of going solar,” said Glen Brand, vice president of policy and advocacy at Solar United Neighbors, a nonprofit that has helped organize tens of thousands of households to secure lower-cost rooftop solar. “That’s just a fact.”
It’s yet another blow to an industry that’s already struggling with rising interest rates and some negative state-level policy developments, including the steep cuts of net-metering values in California, the country’s largest rooftop solar market. In the U.S., residential solar sales fell last year for the first time since 2017, according to analysis firm Wood Mackenzie.
The new law’s solar-incentive clawbacks will make things worse. Wood Mackenzie’s recent “low case” forecast indicates that the U.S. will see a 42% decline in residential solar installed between 2025 and 2029 compared with what would have been installed with the tax credits in place.
“Many residential solar companies will be able to diversify and survive,” said Wood Mackenzie solar analyst Zoë Gaston. But “we do expect that some residential solar companies will not be able to adapt.”
That will mean “massive layoffs,” EnergySage’s Walker said. The Solar Energy Industries Association estimates that the phaseout of 25D could lead to about 84,000 job losses by the end of 2026. Of the more than 150 smaller solar installers surveyed by EnergySage, 92.3% said the law’s changes will harm their businesses, and 63% said it would “dramatically harm” their future prospects.
The sudden loss of tax credits compounds smaller installers’ challenges, Walker said. “Even if they were given another six months a year, they could pivot business models,” she said. But for “businesses this small, their margins are not huge. They don’t have the bandwidth, while trying to serve as many customers as they can through this year to claim the tax credit, to also pivot.”
Barry Cinnamon, CEO of solar and battery installation firm Cinnamon Energy Systems, said his strategy is to do as many tax credit–backed projects as possible in 2025 and then retrench. “Nobody wants to admit they’re going to have to cut overhead by 30% or 40% or more,” he said. “But for the solar hardcore people who want to stay in the business, you’ve got to cut your costs back.”
Despite the bad news for rooftop solar, the share price of Sunrun, the country’s top residential solar and battery installer, has not cratered over the last two weeks. Instead, it’s rallied since the law’s passage — and that’s because the law offered a bit more runway to a separate tax credit that large companies can use to facilitate third-party ownership structures for rooftop solar.
For more than a decade, nationwide solar companies like Sunrun, Tesla Energy, Freedom Forever, Trinity Power Systems, and the now-bankrupt Sunnova, SunPower, and Titan Solar Power have offered households solar systems through leases or power purchase agreements. Under those structures, companies maintain ownership of the solar systems, which allows them to utilize tax credits designed for utility-scale solar, wind, and other clean energy projects.
Under the Inflation Reduction Act, those decades-old tax credits were replaced this year with a 30% “tech neutral” investment tax credit, known as 48E for its place in the tax code. Republicans initially aimed to eliminate those tax credits for solar and wind power almost immediately. But the final version of the law allows companies to continue to claim them for projects that begin construction before July 4, 2026, as long as they reach completion within four years of that start date, and for projects that are connected to the grid by the end of 2027.
This means that, starting next year, households are going to have two options, Julien Dumoulin-Smith, head of equity research for power, utilities, and clean energy at investment firm Jefferies, said during a Latitude Media podcast last week. They can spend or borrow money to purchase a system without the benefit of tax credits, or they can sign up with a third-party owner that “can qualify for the tax credits, and indirectly flow that back to you in the form of a lower cost arrangement or offtake price,” he said.
That’s a significant advantage for third-party-ownership solar companies, which have regained market share against competing loan-based solar business models amid the rising interest rates of the post-Covid years and now make up roughly half the U.S. residential solar market.
But the pathway for third-party solar companies to tap federal tax credits remains challenging.
In the midst of the megabill’s passage from the Senate to the House of Representatives, Trump issued an executive order calling on the Treasury Department to quickly set guidelines to “strictly enforce the termination” of the solar and wind tax credits, with specific instructions to examine “restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built.”
That throws many of the assumptions on which third-party residential solar companies might build their business into uncertainty, Dumoulin-Smith said. Today, clean energy projects can secure start-of-construction dates for projects by buying at least 5% of the equipment and materials going into them under “safe harbor” provisions. But if the Treasury Department alters that understanding, perhaps by increasing the proportion of prepurchased equipment required, “that’s a big question mark here on what this means for residential solar in 2028 and 2029 and 2030,” he said.
Jenny Chase, lead solar analyst with BloombergNEF, warned of another potential trap: the law’s “foreign entity of concern” (FEOC) rules, which bar tax credits to companies with ties to China. It’s possible that the Treasury Department will issue guidance to “make it essentially impossible to prove there are no components, materials, or intellectual property from China, which would mean that anything not safe-harbored in 2025 cannot claim tax credits,” she said.
The Treasury Department is required in the law to issue its guidance by 2026, though several agency rulemakings under the Biden administration took longer than expected, and the Trump administration has since cut staff at the department.
These same risks extend to the lithium-ion batteries being added to a growing number of residential solar systems. The final version of the megabill allows projects using batteries to claim tax credits for them through the end of 2033, but only if they can meet FEOC restrictions — and most of the world’s lithium-ion batteries have materials and components made in China.
Cinnamon noted that regional installers like his company can partner with third-party solar providers, and he’s actively investigating his options. “But it’s also crazy, because nobody knows what the rules are, due to FEOC and changes in safe harbor.”
“It’s very hard to make specific financial and investment plans in this environment,” he said. “We don’t think it’s going to change — we know it’s going to change.”
Arrayed against all these downsides are some glimmers of hope for rooftop solar, however, including its seemingly inexorable decline in cost. That’s true even in the U.S., where solar system costs remain stubbornly higher than in the rest of the world.
According to the National Renewable Energy Laboratory, the cost of U.S. residential solar systems fell from an average of $8.60 to $2.70 per watt from 2010 to 2023, a 69% decline.
It’s now more affordable to install rooftop solar in large part because solar panels themselves have simply gotten much cheaper. While tariffs have bumped up U.S. prices in recent years, solar equipment costs now represent only a fraction of total installation costs.
Instead, it’s the “soft costs” — acquiring customers, designing systems to meet households’ needs, navigating lengthy permitting processes, securing utility interconnections, and offering long-term maintenance and operations support — that dictate the price tag of a system in the U.S. It’s in those areas that the industry will need to improve in order to make solar more affordable once tax credits disappear.
As Walker noted, state and local governments can be extremely helpful in driving down those costs. States have passed laws to streamline solar project permitting, and cities and counties have installed “instant permitting” software platforms that can dramatically cut wait times and administrative costs. Some utilities are starting to offer incentives to customers that enlist solar and battery systems in “virtual power plant” programs that reduce grid stresses and utility costs.
Rising utility rates themselves are also a counterweight to losing tax credits. The megabill’s cuts to clean energy incentives are expected to force utility rates upward by increasing the cost and restricting the expansion of solar, wind, and batteries, which make up the vast majority of new generation that can be added quickly to the grid, at a time of spiking demand for power from data centers, factories, and broader economic growth.
“There are basically only two ways to reduce and control your energy costs,” Solar United Neighbors’ Brand said. “One is to use less energy, through energy efficiency, insulation in your home, more efficient appliances, etc. The other is to reduce your fuel costs. With solar, your fuel costs are zero.”
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