The Trump administration has further tightened the screws on the renewable energy industry, making it more difficult for new projects to claim tax credits that are set to phase out next year. 

The Treasury Department issued new guidance on Friday on enforcing the planned phase-out of subsidies. It places tight restrictions on when a wind or solar project can be considered under construction, a key definition under the law.  

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The guidance stems from an executive order signed by President Donald Trump in July, which ordered the agency to ensure projects cannot skirt the deadlines for phasing out the credits in the One Big Beautiful Bill Act. The law ends the subsidies for wind and solar projects placed in service, meaning operational and plugged into the grid, after the end of 2027. 

The bill did include a carve-out for projects that begin construction less than one year after the bill is enacted to claim the credit, but the Treasury’s new guidance will make that even more difficult. 

Under the new rules, the Treasury Department considers a wind and solar facility under construction when “physical work of a significant nature begins.” This varies depending on whether the project is for a wind or solar facility, though it solely focuses on the type of work performed on and off-site. 

Off-site work that falls under this definition includes manufacturing components and mounting equipment, transformers, support structures, inverters, and other power conditioning equipment. 

On-site work that is described as significant in nature is much more specific. 

For a wind facility, on-site work includes excavating the foundation of a turbine, setting anchor bolts into the ground, or pouring concrete for the foundation. For a solar facility, this is limited to installing support racks or other structures to which panels, solar cells, or collectors will be affixed. 

Other preliminary activities associated with constructing a wind and solar facility, such as surveying, site clearing, test drilling, and excavating, do not fall under the administration’s revised definition of beginning construction. 

The new guidance was swiftly criticized by the renewable energy industry, with many accusing the administration of creating more burdensome regulations that will make it difficult to add more energy to the U.S. grid while demand soars. 

“The Treasury Department’s new guidance to further restrict energy tax credits is part of an unprecedented side deal the administration made with anti-clean energy ideologues to undermine Congress and further harm America’s solar industry,” Solar Energy Industries Association President and CEO Abigail Ross Hopper said in a statement. 

“This is a blatant rejection of what Congress passed in H.R. 1, and it threatens thousands of small businesses across the country that are the backbone of our clean energy economy,” Hopper added. 

“At a time when we need energy abundance, these rules create new federal red tape,” Advanced Energy United President and CEO Heather O’Neill said. “They eliminate long-standing precedent for how companies demonstrate they’ve begun project development.”

“These rules will make it more difficult and expensive to build and finance critical energy projects in the U.S. that are needed to power homes, small businesses, and new manufacturing and industry dependent on reliable and affordable energy,” she continued. 

The guidance released Friday is also expected to be criticized by some top Senate Republicans, who have been urging the administration to add every electron to the grid, no matter its source. 

WIND INDUSTRY DOUBTS ANY NEW OFFSHORE PROJECTS IN NEXT YEAR THANKS TO TRUMP

Sens. Chuck Grassley (R-IA) and Lisa Murkowski (R-AK) have led the charge and attempted to meet with Treasury officials before Congress broke for the August recess. 

The Republicans have even moved to block some of Trump’s nominees to the Treasury to illustrate their unhappiness with the administration’s crackdown on the industry.