US President Donald Trump has issued a new executive order limiting tax incentives for solar and wind energy investments. Following instructions to the Treasury Department, the criteria for tax credits for renewable energy projects are being tightened. This measure eliminates most of the incentives provided during the Biden administration.

Trump Slashes Solar and Wind Energy Investments

The executive order restricts access to production (PTC) and investment (ITC) tax credits, which are vital for renewable energy projects. The Treasury is asked to narrow the definition of “start of construction.”

Under this regulation, the stages at which projects qualify for tax incentives will be redefined. The previously flexible definition allowed developers to plan the process over time. With the new regulation, this period will be significantly shortened.

According to the law, wind and solar projects that have not begun construction by the end of 2026 will not be eligible for tax incentives. The deadline for completion of these projects is set at the end of 2027. This move largely invalidates the 30% tax credit, which currently applies until 2032 under current law.

In his executive order, Trump characterized renewable energy as “unreliable, expensive, and dependent on foreign sources.” He argued that solar and wind energy harm the US energy grid and replace fossil fuel-fired power plants. The presidential statement cited the reliance of these resources on raw materials and technologies from “hostile” countries like China as a justification.

The new regulation targets not only the project’s content but also supply chains. Energy projects identified as having ties to countries like China, Russia, Iran, and North Korea will be excluded from the direct tax credit. The White House considered this move within the framework of its policy of “preserving US energy independence.”