U.S. Scales Back Renewable Energy Tax Provisions with New Legislation
President Donald Trump signed the One Big, Beautiful Bill Act into law on July 4, 2025, scaling back several renewable energy tax provisions. The law imposes a placed-in-service deadline of December 31, 2027, for solar and wind projects—unless they begin construction before July 4, 2026—while other clean technologies like battery energy storage systems retain more favorable timelines, with construction qualifying for credits up until the end of 2033.[5]
U.S. Adds 7.4 GW of New Renewable Capacity in Early 2025, Led by Solar
In the first quarter of 2025, the U.S. installed 7.4 GW of new renewable capacity, primarily in Republican-voting states, with utility-scale solar leading at 4.46 GW followed by 1.6 GW of energy storage and 1.3 GW of wind. The national renewable energy project pipeline also saw significant growth, up 12% year-on-year to 184.4 GW, and the energy storage pipeline surged 57%, reflecting robust investment and demand for clean power.[2]
Solar and Battery Storage to Dominate U.S. Power Additions in 2025
The U.S. is expected to add 63 GW of new utility-scale electric-generating capacity in 2025, with solar and battery storage accounting for 81% of these additions. Texas and California will lead solar growth, and notable natural gas projects will also replace retiring coal capacity, highlighting the ongoing transformation of the U.S. energy mix.[6]
Renewable Electricity Generation Diversifies and Accelerates Globally
Renewable electricity generation has diversified significantly over the past 25 years, with variable renewables like wind and solar now comprising 44% of the renewable mix, up from 1.1% in 2000. In 2023, solar generation increased by 25.2% year-on-year—the fastest growth since 2018—while wind and hydropower contributed major shares to the global renewable supply.[3]
New Inflation Adjustment Set for Renewable Energy Production Tax Credit
The IRS set the 2025 inflation adjustment factor for the renewable energy production tax credit (PTC) at 1.9971, with a reference price for wind facilities at 3.1 cents per kilowatt-hour. This adjustment impacts the calculation of tax credits for eligible renewable electricity sales in the 2025 calendar year.[1]