Posted on 07/13/2025 4:35:44 AM PDT by MtnClimber
What does the future hold as to large additions to heavily subsidized wind and solar electricity generation capacity in the U.S.? For those paying attention, the legislative back-and-forth of the One Big Beautiful Bill, as it made its way through Congress, has been something of a roller coaster ride. At this point, I am betting that the utility-scale wind and solar industries are near the end of their line. This post reports on the latest development, which is an Executive Order signed by President Trump on July 7. But count on the wind and solar subsidy farmers to keep fighting to the last dollar of their government handouts.
Note that it is my view, from extensive study of the subject, that wind and solar generators of electricity are essentially useless, not to mention dangerous and costly, for a modern grid that needs reliable generation 24/7/365. Nobody will invest private capital in them without huge government subsidies. To date those subsidies have been provided mostly in the form of tax credits under the Internal Revenue Code. Those tax credits have existed since 1978 (and since 1992 for an additional tax credit for wind generation), always with expiration dates that, however, have time and again been extended as the deadlines neared.
I have had two previous posts about provisions in the OBBB on this subject: this one from May 24 (immediately after the House had passed its version of the Bill), and this one from July 6 (after the President had just signed the final Bill into law). As I reported in the May 24 post, the version of the OBBB passed by the House had such strict limitations on further qualification for the wind and solar tax credits that it was likely that few if any additional projects would be able to qualify. Projects would have had only 60 days after enactment to begin construction, and would have had to enter service by 2027 — that is, before President Trump would leave office. That would mean that any attempt to revive the subsidies before they expired would have to overcome Trump’s veto. In other words, if the language in that version of the Bill had survived, the wind and solar industries were basically finished.
But as I then reported in the July 6 post, the final language of the OBBB as enacted appeared to give the big wind and big solar industries the chance to fight another day. The time to commence construction and qualify for the tax credits had been extended to a year (thus, to July 4, 2026), and the time to enter service had been extended to four years after that (thus, in 2030, which would be well beyond President Trump’s term). Big wind and solar would thus get a substantial window to commence new projects, plus an opportunity to lobby Congress for further extension of the credits in 2029 and 2030, after Trump had left office. The post quoted energy writer Alex Epstein as pointing out that the IRS rules on what constitutes beginning of construction were so lenient and flexible as to pose no real constraint on how many economically useless projects could qualify for a decade of taxpayer subsidies.
In an update to the July 6 post, I cited David Blackmon at the Daily Caller as attributing the tax credit deadline extensions in the final OBBB to a deal negotiated by Senator Lisa Murkowski of Alaska. This piece from Politico says that other Republican Senators, including Grassley and Ernst of Iowa and Curtis of Utah, were also involved in the deal.
Well, it turns out that people in the White House were on to the scam and have taken steps to try to ensure that the extended deadlines in the final OBBB do not turn into an open ended taxpayer blank check for the wind and solar industries.
Note that the potential for new deadlines in the OBBB to turn into such a massive blank check turns on how easy it is for large numbers of projects to qualify as having “begun construction” within the year ending July 4, 2026. The test for what constitutes “beginning of construction” appears in some IRS regulations adopted under the Internal Revenue Code sections providing for the tax credits; and during the Covid pandemic era, the IRS issued a notice of a “safe harbor” to qualify. Here is the IRS Notice from 2021 containing the relevant language. As Epstein notes, the test for “beginning construction” under the so-called safe harbor is “insanely-easy-to-meet. . . . All you need to do is commit 5% of expected project cost to buying re-sellable assets like solar panels.”
This is the specific loophole addressed by President Trump’s July 7 Executive Order. Here is the text of Section 3(a) of that Order:
Within 45 days following enactment of the One Big Beautiful Bill Act, the Secretary of the Treasury shall take all action as the Secretary of the Treasury deems necessary and appropriate to strictly enforce the termination of the clean electricity production and investment tax credits under sections 45Y and 48E of the Internal Revenue Code for wind and solar facilities. This includes issuing new and revised guidance as the Secretary of the Treasury deems appropriate and consistent with applicable law to ensure that policies concerning the “beginning of construction” are not circumvented, including by preventing the artificial acceleration or manipulation of eligibility and by restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built.
So the test for “beginning construction” will likely turn out to be not so easy to meet at all. The Secretary of the.Treasury is directed to issue “new and revised guidance” within 45 days from July 4, which would be August 18. We won’t know exactly how strict and onerous the new guidance is until it is issued, but we do know that Trump has directed that the purpose of the new guidance will be to assure that the new deadline as to “beginning of construction” is not “circumvented.”
According to Utility Dive here on July 9, the language of the Executive Order is the result of a deal reached between Trump and the House Freedom Caucus to secure their votes for passage of the OBBB. It seems that both sides can play this game.
I would think it is well within the power of Treasury Secretary Bessent to come up with guidance on the meaning of “beginning of construction” that will strongly discourage almost all efforts to try to qualify for the extended tax credits.
What a huge scam this global warming hoax became.
A little off topic from Industrial grade solar, but I had a solar salesman knock on my door the other day.
He started right in about home improvement. I told him I was all set then he really got rolling. as I began closing the door solar finally came up and I told him that I really wasn’t interested now.
This guy was actually yelling at me.
I use a small amount of solar to power a fan in my camper. It’s perfect for that type application. But if I walk in front of the solar panel, the fan stops immediately. There’s no battery big enough to overcome that in an industrial application.
What a great article. Thanks for posting.
It’s great to know that ending these monstrous scams is still on the table. President Trump and Scott Bessent are a formidable team. The Freedom Caucus gets applause as well. Congress is still a swamp but this is evidence that the good guys can win despite corruption & greed.
Although it has made people like Al Gore super duper wealthy.
Wind and solar may be he future but it will not be economical until the private enterprise has perfected it and reduced its cost to where it is market competitive. Then it will be worth doing. Trying to force it by government edict will waste resources and delay or end competitiveness while epressing the economy and adding to the National Debt.
Our political geniuses in Washington State were giddy to announce the first electric hybrid ferry entering service in Seattle in July. The perfect “green” solution for a locale that doesn’t see the sun for close to 8 months out of the year. Contract for the first three solar ferries is over $400 million. With budget creep, that figure will surely be closer to $600 million. We currently have 21 ferries in service in Washington. This is the cost to replace just 3 of them. Doomed to fail but, hell, Washington taxpayers reliably vote in Democrat moon bats to run our state into bankruptcy.
I read about that. I was in Washington a year ago and took a short ferry across a river. Somewhere in NE WA. The river was deep in a valley with tall mountains around. Perfect for a solar powered ferry.
I read about somewhere else with electric ferry’s. They are all out of service.
Philadelphia just lost their entire fleet of electric school buses to a fire. Diesels average 15-20 year lifespan. The electrics were put in the boneyard at around two years. None were usable. Then the fire. They admitted it was a battery fire.
I’m guessing it was arson for profit.
I believe the electric/hybrid ferries that do exist have all been running on their diesel power. What a pathetic joke on the forced-to-subsidize taxpayer.
Those pushing this fraud should be a arrested and imprisoned.
“it is my view, from extensive study of the subject, that wind and solar generators of electricity are essentially useless”
We have that “useless” nearly everywhere here in the Texas pandle.
Answer: No. The subsidies crowded the market with junk and gimmicks. Funding bad ideas reduced the market for good ideas, making the good ideas reliant on subsidies also. But photovoltaic solar energy actually works, and has become cheaper than alternatives. The main issue is that they aren’t consumable, meaning that it’s very easy to create a glut so production capacity is only ramping up at a moderate pace. But even with battery-delayed supply to prevent the “duck tail” problem, solar is cheap now.
Let’s hope so. They are America’s Number One EYESORE. Ugly and worthless.
“They are America’s Number One EYESORE. Ugly and worthless.”
The blades and pole can be carried away. The 50+tons of concrete and rebar is not going anywhere.
It has been a big money grab, only to leave unsightly trash scattered throughout the country side.
You got that right.
An ongoing scam since 1978. I had no idea the grift had gone on that long. That would make sense though since the windmill scam Has been around such a long time
Watches these projects are abandoned for somebody else to clean up. That can mean only 1 thing The taxpayer Will once again be left holding the bag
It will not be just the clean up though. The price for all this foolishness Will also come With even higher electric rates. It was higher rates Will be required to Rebuild Generated capacity and for the emergency Installation of gas turbine fired generation. That too will come at a high cost.
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