When renewable energy stocks rallied last week after the Senate axed a $7 billion tax on wind and solar energy projects from its version of President Trump's One Big Beautiful Bill Act, the surge didn’t look built to last.
Senate Republicans secured a one-year extension for wind and solar companies to qualify for existing tax breaks carried over from the Biden era.
But with Trump’s long-standing hostility toward renewables, further government support looks unlikely once the reprieve runs out.
And the bad news came sooner than expected.
On Monday, Trump issued an executive order tightening eligibility requirements for clean energy projects seeking tax credits under the Senate’s one-year extension.
The legislation allows projects to qualify for full credits if they begin construction within 12 months of the bill becoming law.
Projects that start construction later must be placed in service by the end of 2027 to remain eligible.
Trump’s order, however, instructs the Secretary of the Treasury to “issue new and revised guidance” to prevent companies from circumventing the rules about when construction actually begins.
A key new requirement: a “substantial portion” of a facility must be completed to qualify for the credit.
The Treasury has 45 days after the bill becomes law to clarify what that means — but the lack of definition introduces immediate uncertainty.
Trump targets clean energy to appease fiscal hawks
As The Wall Street Journal reported, Trump’s move is likely aimed at mollifying the House Freedom Caucus — a group of hardline Republican fiscal hawks — who opposed even the temporary extension of renewable energy credits in the first place.
Markets didn’t take the news well and renewable stocks tumbled Tuesday.
SunRun (RUN) plunged 12.2%, Enphase Energy (ENPH) fell 4.9%, First Solar (FSLR) dropped 5.6%, NextEra Energy (NEE) lost 3.5%, and AES Corp. (AES) sank 3.9%.
Trump’s opposition to green energy isn’t new. In a June post on Truth Social, he called wind and other renewable sources “JUNK” and “the most expensive and inefficient energy in the world.”
“None of it works without massive government subsidy (energy should NOT NEED SUBSIDY!),” he wrote.
Market reality doesn’t match Trump’s message
Despite political hurdles, data shows renewable energy isn’t going anywhere.
As Morningstar equity analyst Brett Castelli pointed out earlier this month, renewables — including solar, wind, and battery storage — accounted for 99% of new generation capacity in the U.S. during the first quarter of 2025.
“They benefit from their zero-emission profile, cost competitiveness, and current tax incentives,” Castelli said.
“We expect renewables to continue to comprise the bulk of near-term capacity additions, along with natural gas additions and select nuclear restarts to help meet rising electricity demand.”
In short, there’s a clear disconnect between the White House and the market.
“We believe wind and solar will steadily rise to over 40% of generation over the next decade — more than double current generation levels,” Castelli added.
Your email address will not be published. Required fields are markedmarked