Photo: Alamy
The Trump administration is ending federal tax credit subsidies for new solar and wind energy projects beginning Saturday, marking the implementation of a key provision in the Working Families Tax Cuts law signed by President Donald Trump last year.
The legislation sets Saturday as the deadline for new solar and wind projects that are not already under construction to qualify for federal tax credit subsidies.
Energy Secretary Chris Wright praised the change in a video posted to social media Thursday, arguing renewable energy subsidies have increased electricity costs.
“The wind doesn’t always blow, and the sun doesn’t always shine,” Wright said. “They drive up the system costs and increase Americans’ electricity prices.”
According to an analysis by the Texas Public Policy Foundation, solar and wind projects received more than $141 billion in government subsidies between 2010 and 2023, more than any other energy source during that period.
“Beyond their direct costs, subsidies are causing artificially low or negative wholesale prices, scarcity prices during periods of high demand and low wind and solar generation, inefficient use of existing assets, and increased transmission costs,” foundation researcher Brent Bennett wrote.
The federal government has supported renewable energy through the Investment Tax Credit, which provides a one-time credit based on qualifying investments, and the Production Tax Credit, which is tied to the amount of electricity generated.
Before the administration moved to end the subsidies, the Congressional Budget Office estimated the two tax credit programs would increase the federal deficit by $308 billion between 2026 and 2035.
The approaching deadline prompted many developers to accelerate construction schedules to qualify for the expiring incentives.
The Solar Energy Industries Association estimated in a June report that developers had more than 200 gigawatts of solar capacity in the pipeline, enough to support development through 2030. The wind industry, meanwhile, reported about 23 gigawatts of projects under development, below the 46 gigawatts industry leaders had anticipated before the subsidies were scheduled to end.
The Trump administration said eliminating the subsidies is one of the major components of the Working Families Tax Cuts law.