Trump directs Treasury to limit wind and solar tax credits

President Trump on Monday directed the Treasury Department to take a strict approach to limit which projects can get access to wind and solar tax credits.

The recently passed Republican megabill ends the tax credits for wind and solar tax credits unless solar or wind farms start producing electricity by 2028 – or unless they start construction in the next year.

Trump’s executive order tells his administration to limit which projects can count as having started construction.

Specifically, he directs the Treasury Department to restrict “the use of broad safe harbors unless a substantial portion of a subject facility has been built.”

It also says the department should try to prevent “the artificial acceleration or manipulation of eligibility.”

Trump also directed the Interior Department, which manages energy production on federal lands and waters, to look for and eliminate any policies that  give “preferential treatment” to wind and solar.

The Republican bill dramatically diminishes the solar and wind incentives passed by Democrats in their 2022 Inflation Reduction Act (IRA).

But, just how far to go was a major point of contention within the GOP,  with more conservative members lamenting that the Senate’s version of the bill – which ultimately also passed the House late last week – was too lenient. 

Ralph Norman, one of the key holdouts, said he would vote for the bill after speaking with the Trump administration about how it would enforce the green tax credit phaseout. 

“We got clarification of what’s going to be enforced. We got clarification on how the IRAs are going to be dealt with. We got clarification on the tax cuts. And still we’ll be meeting tomorrow on the specifics of it. But no, I feel comfortable with this,” he said last week.