Days after Republicans in Congress passed a wide-ranging law that slashed tax breaks for wind and solar energy, new moves from the Trump administration have added a fresh layer of uncertainty about the legislation.
Now the Trump administration is set to make crucial decisions about how the law is enforced. The administration’s next moves could claw back billions in funding for green projects and further hamstring the U.S. solar and wind industries.
One industry expert told me that, at worst, those decisions could amount to a “backdoor” cancellation of federal subsidies for solar.
Renewable energy tax credits were at the core of President Biden’s 2022 Inflation Reduction Act, and the law helped spur a clean energy boom in the United States. But the domestic policy law passed last week phased out many of those credits.
Still, some House Republicans argued it did not go far enough, and a member of the House Freedom Caucus said that President Trump would find more roadblocks to put in place.
On Monday, the White House issued an executive order that could make it harder for developers to claim the remaining credits, directing the Treasury Department to “rapidly eliminate the market distortions and costs imposed on taxpayers by so-called ‘green’ energy subsidies.”
And the Environmental Protection Agency submitted a court filing claiming the new law justified its efforts to claw back billions of dollars in funding for renewable energy and efficiency projects.
Here’s a rundown of what we still don’t know. And, if you missed it, Brad Plumer has a recap of what’s in the law here.
Timelines in flux
Under the new law passed last week, solar and wind projects that begin construction before July 2026 can qualify for federal tax credits.
But after Trump’s executive order was issued on Monday, some experts worried the Trump administration could move the goal posts.
Right now, solar and wind installations can be considered “under construction” for tax purposes if the facility spent at least 5 percent of the total cost of the project or physically broke ground.
Monday’s executive order instructed the Treasury Department to re-examine this guideline and ensure that a project can only claim credits if a “substantial portion” is built during the tax year in question. It is not clear what substantial means in this context.
A major change to the guidelines could put tax breaks out of reach for millions of dollars worth of renewable energy projects across the country, in businesses, schools, nonprofits and even some churches.
“This executive order appears to target longstanding and well-established tax standards that allow for realistic financing timelines for all sorts of energy projects — including solar, wind, carbon capture and hydrogen projects,” said Abigail Ross Hopper, president and chief executive of the Solar Energy Industries Association.
The uncertainty could have a chilling effect, said Tish Tablan, senior program director at Generation180, which works on electrifying schools.
“My concern is that schools are risk-averse — they really want to be good stewards of taxpayer dollars,” she said. “If there is a risk that they won’t be able to meet these onerous and burdensome thresholds, they may just back off these projects because it’s not worth the risk.”
In a statement, Harrison Fields, a White House spokesman, defended the law and said it would “further unleash the might of America’s energy dominance while continuing to lower costs for millions of families.”
A ‘backdoor way of canceling solar’
The new law also places complicated restrictions on tax credits for projects that source materials from China, North Korea, Iran and Russia, or that rely on investments from those countries.
Starting in 2026, in order to qualify for the credits, solar projects will have to source at least 40 percent of their materials from companies that do not have close ties to the banned countries. The rules apply to equipment manufactured abroad in factories that are 40 percent owned by Chinese shareholders.
Under the most extreme interpretation of the law, new guidelines could make it very difficult for solar projects to prove they meet the requirements, said Jacob Goldman, vice president at Energy Tax Savers, a consultancy. China dominates the supply chain for solar components and panels.
“Could it be considered a backdoor way of canceling solar?” Goldman said. “There’s not a lot of domestic solar in our country. You’d have to really look for it.”
Monday’s executive order instructs the Treasury Department to clarify the new rules within 45 days. Goldman said the administration has a lot of leeway in shaping the guidelines.
Andreas Karelas, executive director of RE-volv, a nonprofit group that helps other nonprofits install solar power, said he estimated about only a quarter of the 146 projects in his pipeline would be able to start soon enough to claim tax credits before the new restrictions take effect. Trump’s executive order, he said, could slow things down further.
Billions for green banks
For months, the E.P.A. has been trying to claw back billions of dollars in green financing grants that were awarded to eight nonprofits through the Inflation Reduction Act. The money has been frozen in accounts held at Citibank as the case plays out in court.
Trump’s new domestic policy law officially repeals the Greenhouse Gas Reduction Fund and rescinds all unobligated funds.
But a lot hinges on the definition of the word “unobligated.” Grant recipients say the new law has no impact on the frozen funding because the Environmental Protection Agency announced it had obligated the funds last August.
But the E.P.A. argues that in March it de-obligated $17 billion in grant funds when it issued termination letters canceling the eight contracts.
In a cabinet meeting Tuesday, Lee Zeldin, the E.P.A. administrator, said the law “delivered a sledgehammer to the green new scam — billions of dollars rescinded.”
Carolyn Holran, an E.P.A. spokeswoman said the agency would work to ensure congressional intent is fully implemented.
Conservation
These toads have psychedelic powers, but they’d prefer to keep it quiet
It looks much like any other toad. It’s plump and green with warty brown spots and vibrant golden eyes. When threatened, though, the Sonoran Desert toad does something extraordinary: It secretes a powerful psychedelic compound from specialized skin glands.
But that potent chemical defense might now be a liability for survival because of a spike in interest in psychedelic drugs.
Trapping in Mexico has decimated several populations of the amphibians and has sent others into steep decline, according to new findings presented at Psychedelic Science, a psychedelics-themed conference held in Denver last month.
Combined with habitat loss and other human-caused threats like climate change, “widespread toad abuse” is creating a “triple whammy for the species,” one expert said. — Rachel Nuwer
The Texas floods
In Flooded Texas, Questions About FEMA’s Role and Fate
At a cabinet meeting on Tuesday, President Trump said that the Federal Emergency Management Agency had swiftly deployed personnel to Central Texas, as catastrophic floods roared through the region.
“You had people there as fast as anybody’s ever seen,” Trump told Kristi Noem, who leads the Department of Homeland Security, FEMA’s parent agency.
But FEMA has been slow to activate certain teams that coordinate response and search-and-rescue efforts, according to half a dozen current and former FEMA officials and disaster experts, most of whom spoke on the condition of anonymity because they were not authorized to comment publicly. — Maxine Joselow
By the numbers
1,500 estimated heat deaths
Days after an intense, record-breaking heat wave sweltered wide swaths of Europe, a group of scientists released a rapid analysis estimating the extent to which climate change might have amplified the heat wave’s death toll.
The World Weather Attribution study was the first of its kind to produce a rapid assessment of deaths linked to climate change from a heat wave, researchers said. They estimate that the influence of climate change may have tripled the death toll. The scientists examined 12 European cities, focusing on the hottest five-day stretch between June 23 and July 2 for each.
The analysis found that in the 12 cities, 1,500 of 2,300 estimated heat deaths could be connected to climate change, compared with a toll of roughly 770 without its effects. — Christina Kelso
More climate news from around the web:
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Bloomberg reports that only a fraction of homeowners in the areas affected by the Texas floods had flood insurance: “In Kerr County, where the Guadalupe River swelled, killing more than 90 people, only 2 percent of homeowners hold federal flood insurance. In neighboring Kendall, another hard-hit county, that share is less than 5 percent.”
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In June, solar power was the European Union’s largest source of electricity for the first time, Reuters reports, citing data from Ember, an energy think tank.
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“I should never have been approved for a loan to begin with”: Homeowners are defaulting on residential solar loans, and the issue is starting to ripple out into the bond market, The Wall Street Journal reports.
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Claire Brown covers climate change for The Times and writes for the Climate Forward newsletter.
The post Trump May Not Be Done Overhauling Renewable Energy appeared first on New York Times.
