More than 40% of Oklahoma’s energy generation comes from wind turbines, and solar companies are showing increased interest in building projects in the state. But advocates say Oklahoma’s leadership position in renewable energy investments may fade with the passage of the megabill.

On top of tax and Medicaid cuts, the bill makes sweeping changes to incentives offered to renewable energy projects. Today, companies in Oklahoma and other states get a tax credit to lessen the burden of operating the facilities.

The credit, along with incentives for electric vehicles and home energy projects, will be phased out in the coming years. Kylah McNabb, head of Oklahoma energy consulting firm Vesta Strategic Solutions, said the cuts will effectively stop the state’s renewable energy development.

“ It’s just incredibly devastating, I mean, I hesitate to use a term that strong, but it is devastating,” McNabb, who is also the executive administrator for the Oklahoma Renewable Energy Council, said. “The bill is changing the business environment for which these projects are working in, and Business 101 is you want a stable policy environment in order to make calculated investments to know where money should be invested at for projects.”

“And what this bill has done has essentially yanked the rug out from under projects in development.”

Proponents of the bill, like the American Petroleum Alliance, celebrated deregulation plans for the fossil fuel industry and opening more land leases for drilling.

“This is the most important energy bill in a generation,” the organization, which has an Oklahoma City chapter, said in a news release. “President Trump has delivered on his promise to unleash American energy by unlocking opportunities for investment, supporting global competitiveness and opening lease sales onshore and offshore from the Gulf of America to Alaska.”

But renewable and environmental protection advocates report dismay over how the bill’s policies will roll back the country’s clean energy progress.

The bill slashes tax credits included in the Inflation Reduction Act, lauded as the U.S.’s first climate change mitigation law, passed during the Biden administration. Incentives for homeowners to invest in solar panels or efficiency projects will be phased out by the end of the year. It also eliminates credits for electric vehicle purchases, which can reach up to $7,500 per car. About 23,000 electric vehicles are registered in Oklahoma as of July 2025.

The megabill was signed into law about two weeks after the representatives from utilities and the Southwest Power Pool warned the Oklahoma Corporation Commission that the state would see a significant energy demand that is likely to outgrow its current supply.

Data centers that power AI use high amounts of energy, and the consumption is projected to increase significantly, forecasters say. Mayes County is home to one of Google’s centers, and several more from other companies are planned in other parts of the state.

As projections soar, the question of the amount of electricity needed to meet demand and the energy sources that will power it remains unanswered.

Natural gas in Oklahoma makes up about half of its generation and is considered a reliable source of electricity. Yet it’s unclear if an adequate number of new plants will be built in time since gas-fired turbines, which are used in a majority of the country’s facilities, are backlogged for up to seven years.

“ Solar and battery storage is going to be the quickest and cheapest way to provide those electrons in a stable, firm manner within the next three to five years, frankly,” McNabb said. “That is the technology that is currently available.”

A 2025 report from the U.S. Energy Information Administration says solar energy is less expensive to generate on average than natural gas in most regions, even without the current federal tax credit. Oklahoma was beginning to build out its solar capacity, but McNabb said the state’s progress will likely slow.

“ We are going to miss that stability, that grid stability, that opportunity to provide low-cost energy for Oklahomans and the Southwest Power Pool,” McNabb said.

Still, renewable projects currently in development have a chance to receive the tax credit. Wind turbines and solar farms have until the end of 2027 to get the benefit.

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