Trump Moves to End New Wind, Solar Tax Subsidies

Trump Moves to End New Wind, Solar Tax Subsidies

Federal tax subsidies for new wind and solar projects expired today, July 4, under the Working Families Tax Cut, and President Trump has now signed an executive order directing the Treasury and the Interior Department to ensure they stay dead.

Energy Secretary Chris Wright made the administration’s position plain on July 2.

“I’m thrilled to report that after about 35 years, on July 4th, we will end the subsidies for wind and solar, thanks to the Working Families Tax Cut,” Wright said.

Wind and solar have pulled federal subsidies for roughly 35 years and still accounted for only about three percent of total U.S. primary energy consumption in 2025. Wright’s case against the programs:

“Wind and solar take a lot of land, 100 times more land for a similar amount of energy. They take an enormous amount of materials, energy intensive materials like steel and cement and polysilicon.

“They take an enormous amount of additional transmission lines to connect their large land, far flung production back to where there’s demand centers.

“And what do we get for all that is a relatively small amount of low value energy. It’s low value because the wind doesn’t always blow and the sun doesn’t always shine.

“So they drive up the system costs and increase Americans’ electricity prices.

“Enough of raising electricity prices. We’re going to drive them down. Thank you.” 

Wind and solar tax subsidies cost taxpayers more than $141 billion between 2010 and 2023, more than any other energy source, according to an analysis by the Texas Public Policy Foundation. Before Congress rewrote the law, the Congressional Budget Office (CBO) projected the investment and production tax credits alone would add $308 billion to the federal deficit between 2026 and 2035.

Trump’s executive order puts Treasury and Interior on a 45-day clock. Treasury must issue updated guidance to close off developer attempts to game the “beginning of construction” definition and to extend eligibility for credits that have now expired. It must also implement tightened Foreign Entity of Concern restrictions written into the One Big Beautiful Bill Act. Interior must scrub its own regulations, guidance, and agency practices for any preferential treatment given to wind and solar over dispatchable energy sources and eliminate what it finds. Both departments must report their actions directly to the president.

Trump signed the order, charging that federal policy had for years “forced American taxpayers to subsidize expensive and unreliable energy sources like wind and solar” while building dependence on foreign-controlled supply chains.

“It is the policy of the United States to:

“(a) rapidly eliminate the market distortions and costs imposed on taxpayers by so-called ‘green’ energy subsidies;

“(b) build upon and strengthen the repeal of, and modifications to, wind, solar, and other ‘green’ energy tax credits in the One Big Beautiful Bill Act; and

“(c) end taxpayer support for unaffordable and unreliable ‘green’ energy sources and supply chains built in, and controlled by, foreign adversaries.”

In June, U.S. District Judge Colleen Kollar-Kotelly vacated an IRS rule that had narrowed the definition of when a renewable energy project qualifies as under construction for tax credit purposes. The court found that the Treasury had failed to provide adequate justification for eliminating a longstanding 5% cost safe harbor that developers had relied on for a decade. The ruling sent the IRS guidance back for further consideration. 

The Solar Energy Industries Association estimated developers had locked in more than 200 gigawatts of solar capacity, enough to secure projects through 2030. The wind industry managed only 23 of an expected 46 gigawatts. 

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