OBBBA’s short tax credit window is set to trigger a brief solar surge, followed by longer-term installation uncertainty, says Wood Mackenzie
It has cut down the 10-year solar forecast to 375 GW AC, citing tax policy reversals
The DOE, on the other hand, warns blackouts could rise 100x by 2030 without firm generation replacing 104 GW retirements
The DOE has also slashed support for solar energy technologies by 87% in its new spending plan released
The reduced solar tax credit deadlines under the Trump administration’s One Big Beautiful Bill Act (OBBBA) are set to create a brief installation boom, along with longer-term uncertainty, cautions Wood Mackenzie. It now projects the US solar capacity to fall 17% over 10 years, reaching just 375 GW AC without extended incentives. Wind installations will also fall by around 20%.
Previously, in April 2025, Wood Mackenzie had pegged new solar PV capacity additions over the next 10 years at 502 GW DC, based on the support provided under the Inflation Reduction Act (see US To Install 502 GW DC New Solar Capacity By 2035).
Wood Mackenzie’s revised projections are based on the OBBBA allowing clean energy tax credits to only those wind and solar energy projects that enter construction within 12 months of the passing of the act on July 4, 2025, or are placed in service by December 31, 2027.
US President Donald Trump followed it up with an executive order on July 7, 2025, directing the Departments of the Treasury and the Interior to ensure strict enforcement of the repeal of solar and wind tax credits (see Trump Signs Executive Order To End Green Energy Subsidies).
They will also implement the Foreign Entity of Concern (FEOC) restrictions, which Wood Mackenzie fears could further undermine the economics of solar and wind projects when viewed alongside the OBBBA.
The impact of these regulatory changes will impact the economics of the power sector in the US as well as the country’s clean energy industrial development.
David Brown, Wood Mackenzie’s Energy Transition Research Director, warns, “With such dramatic uncertainty facing new power supply investments, thermal retirements are likely to be deferred, power prices will rise and large loads will be delayed.”
He added, “The early sunset of manufacturing tax credits will lower future energy demand from clean energy manufacturing, while delays to new supply could slow data center rollouts nationwide as facilities compete for scarce grid capacity.”
Meanwhile, the US Department of Energy (DOE) is creating a sense of urgency to pivot the focus back to fossil fuels. In a report released following the passage of the OBBBA, the department warns that blackouts could increase by 100 times in 2030 if the country continues to shutter reliable power sources and fails to add additional firm capacity.
Pointing to the ‘unstable and dangerous path of energy subtraction’ that forced closures of baseload power sources such as coal and natural gas, Energy Secretary Chris Wright slammed the previous administration for leading the ‘radical green agenda’.
By 2030, retiring 104 GW of firm power without firm replacements could raise outage hours from under single digits today to over 800 hours annually. Assuming 209 GW of planned additions to replace this capacity will still lead to only 22 GW coming from firm, baseload generation – thus increasing the risk of outages in several regions to rise more than 30-fold – it will fall far short of what’s needed to ensure grid reliability, according to the report.
“President Trump’s administration is committed to advancing a strategy of energy addition, and supporting all forms of energy that are affordable, reliable, and secure. If we are going to keep the lights on, win the AI race, and keep electricity prices from skyrocketing, the United States must unleash American energy,” stated Wright.
The DOE has also cut its support for solar energy technologies by 87% from $318 million in FY2024 to $41.9 million in FY2025, under the department’s new spending plan. For FY2026, the support will drop to zero.
Opposing the DOE’s plan, Congresswoman Marcy Kaptur from Ohio and Senator Patty Murray from Washington issued a joint statement that reads, “This outrageous, unlawful decision by the Trump administration is a direct attack on our energy independence and American families’ ability to afford their monthly energy bill. By slashing congressionally mandated investments in cutting-edge technologies, President Trump is driving up energy costs and ceding ground to our global competitors, who certainly aren’t throwing in the towel on the energy solutions of the future.”