Are new tax rules putting the brakes on wind energy progress?

January 3, 2026

There is a literal, legal windstorm over massive turbines that produce green energy.

A broad array of groups with interests in clean and affordable energy earlier this week filed a lawsuit against the IRS and Treasury Department over new rules for tax credits they say unfairly and illegally discriminate against wind and solar projects.

As part of a series of attacks on wind and solar, the IRS eliminated a key pathway for companies to demonstrate they have begun construction and thus qualify for federal tax credits before they expire on July 4, the groups said.

The IRS guidance “unlawfully changes the tests for beginning of construction for only solar and wind facilities, without providing adequate reasons or data for treating those facilities differently from all other industries,” the filing says. This change is “likely to increase power prices, resulting in higher electric rates and bills for consumers.

The case was filed Dec. 29 in the U.S. District Court for the District of Columbia by a coalition of groups, led by the Oregon Environmental Council. Other plaintiffs are: Natural Resources Defense Council, Public Citizen, Hopi Utilities Corporation, Woven Energy, the City and County of San Francisco, and the Maryland Office of People’s Counsel.

“Oregon is counting on renewable energy. The Trump administration’s unfair decision to pull the rug out from under wind and solar projects will lock Oregon ratepayers into expensive, polluting energy sources,” said Jana Gastellum, executive director of the Oregon Environmental Council.

“Oregonians are already paying the price through devastating wildfires, toxic air pollution, and extreme weather. We can’t afford to go backwards — not when the climate crisis is worsening, and communities are suffering.”

The landscape of energy

In 2023, about 4,178 billion kilowatt hours of electricity were generated at utility-scale electricity generation facilities in the United States.

About 60% of this electricity generation was from fossil fuels—coal, natural gas, petroleum, and other gases. About 19% was from nuclear energy, and about 21% was from renewable energy sources, according to the Energy Information Administration.

There has been a tug of war when it comes to renewable energy. Under Joe Biden’s presidency, there was a significant emphasis on his “Green New Deal.” That meant a lot of federal subsidies to support wind and solar.

When Trump swept into office, it was all about drill, baby drill.

So the focus has changed and some groups are applauding.

The Texas Public Policy Foundation praised the U.S. Department of the Interior for announcing that it is pausing the construction on all large-scale offshore wind projects under construction in the United States, including the Vineyard Wind 1 Project off the coast of Massachusetts.

In 2021, TPPF filed a federal lawsuit against the Biden administration challenging the approval of the Vineyard Wind project, claiming it would severely harm the commercial fishing industry in the area and destroy the lives of countless families, as well as create irreparable harm to the environment, ocean wildlife, and national security. Last July, the group said its warnings came true when an enormous windmill blade the size of a football field collapsed into the ocean, scattering fiberglass debris for miles and closing beaches on the East Coast.

Utah and wind energy

While Utah gets its vast amount of energy from coal, it has embraced wind, solar and other forms of energy. State officials are cautious, however, and even wind and solar have impacts to nature.

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While there are federal tax breaks going away, Utah said it is still in the game for wind.

The Office of Energy Development has made that clear in a statement it released to the Deseret News.

“Utah’s unique geography has allowed us to develop a resilient and diverse energy portfolio. The state will continue to pursue its any-of-the-above energy approach, welcoming resources where they make sense for local communities and the grid,” the office said. “Utility-scale energy projects, regardless of resource type, may be eligible for the High Cost Infrastructure Tax Credit and some may be eligible for the Production Tax Credit.”

So the incentives and money are not going away in Utah. You just need to know how to find it.