The “One Big Beautiful Bill Act” (OBBB) signed into law by President Trump in July has sparked controversy due to its far-reaching impacts on various sectors, including clean energy. The energy-related provisions of the OBBB have raised concerns about their potential negative effects on the electricity system and the people relying on it.
The timing of the OBBB couldn’t be worse as energy bills are already on the rise, aging power plants are being retired, and the grid is struggling due to underinvestment. The surge in electricity demand, especially driven by AI data center buildout, further complicates the situation.
The Trump administration’s actions, such as halting clean energy projects, imposing tariffs, and restricting permits for renewable energy projects, are exacerbating the challenges facing the electricity system. The OBBB, passed along partisan lines, continues this trend by making changes to existing energy policies that hinder the deployment of clean energy solutions.
The implications of the OBBB on the energy sector are severe. Electricity rates are projected to increase by 10 to 18 percent by 2035, renewables deployment could decrease by 57 to 62 percent over the next decade, and grid reliability could be strained. Clean energy jobs are at risk, with the solar industry warning of potential job losses in the hundreds of thousands.
The OBBB’s changes to clean electricity tax credits, particularly sections 45Y and 48E, are significant. The eligibility of wind and solar projects for tax credits is restricted, leading to a decrease in renewables deployment. The shift in project eligibility criteria and the addition of foreign entity restrictions further complicate the situation.
Consumer-facing tax credits for rooftop solar, energy efficiency, and electric vehicles have also been slashed, undermining the transition to cleaner energy sources at the consumer level. The abrupt phase-outs impact not only consumers but also the broader clean energy economy, leading to job losses and investment cancellations.
The OBBB also made changes to the advanced manufacturing production credit (45X) and clawed back climate and clean energy funds, further undermining clean energy initiatives. Additional revisions to energy tax policies favor fossil fuels, amplifying the pro-fossil, anti-renewable effect of the OBBB.
Overall, the OBBB’s relentless attacks on proven energy policies will result in higher energy costs, job losses, cancelled investments, increased emissions, ceded technological leadership, and weakened resilience to climate change. The implications of the OBBB extend beyond the energy sector, impacting individuals, communities, and industries across the board.
