President Donald Trump signed an executive order on July 7, aiming to roll back support for wind and solar energy. The move is part of the new One Big Beautiful Bill Act, which cuts renewable energy tax credits and prioritizes traditional energy sources.

Trump’s EO Ends Support for “Unreliable” Green Energy

Trump’s administration labeled these renewable sources as unreliable, expensive, and overly dependent on foreign supply chains. According to Trump, clean energy policies threaten U.S. national security, disrupt the electric grid, and harm the natural environment.

This executive order marks a major reversal from the direction set by the 2022 Inflation Reduction Act, passed by Democrats, which offered strong incentives for clean energy projects.

Now, Trump’s energy policy shifts back to conventional energy sources like coal, natural gas, and nuclear—those he calls “reliable and dispatchable.” His administration argues that green energy has received unfair advantages and is weakening the nation’s energy system.

Tax Breaks for Renewables Face the Axe

As part of the executive order, the Treasury Department is now required to end tax credits for wind and solar production. It must also apply stricter rules concerning foreign-controlled companies involved in renewable energy supply chains.

In addition, the Interior Department must revise current policies that have so far favored renewables, such as streamlined permitting and lease arrangements. Both agencies have 45 days to submit detailed reports of their actions to the White House.

Moreover, the order freezes new permits and approvals for wind energy projects, especially offshore developments. Until a full government review is completed, federal agencies are barred from issuing new loans or contracts for wind projects. This decision creates immediate uncertainty in a sector that has been growing rapidly due to both state and federal commitments.

Wind Power at Risk: What’s at Stake

As per EIA, currently, wind energy plays a vital role in the U.S. electricity mix, contributing about 10% of the nation’s power, making it the largest single source of renewable energy. In states like Iowa and South Dakota, wind supplies more than half of all electricity.

According to the U.S. Department of Energy, over 131,000 Americans are employed in wind energy-related jobs. These workers now face an uncertain future as federal support for their industry is scaled back.

Under the new law, developers will only be able to claim tax benefits for wind and solar projects if construction begins before the end of 2026. Furthermore, these projects must be completed and placed in service by the end of 2027.

Previously, developers could rely on tax incentives through 2032 under the 30% tax credit program. The shorter timeline could discourage companies from launching new renewable projects due to the higher financial risks and increased upfront costs.

Offshore Wind Goals in Limbo for States

This dramatic shift in policy could most severely impact states with ambitious climate targets. For instance, New York aims to install nine gigawatts of offshore wind capacity by 2035, enough to power roughly six million homes. The state has already invested heavily in infrastructure and workforce development to support this target.

Similarly, New Jersey plans to develop 11 gigawatts of offshore wind by 2040 and transition to a 100% clean energy power sector by 2050.

Offshore wind was a central pillar in both states’ strategies. Now, with federal support in question, these states may be forced to revise their energy roadmaps or find alternative funding solutions. Several state officials have already expressed concerns that their clean energy timelines may slip, which could push critical emissions targets further into the future.

Solar Slowdown: Cheap Power Faces New Roadblocks

The clean energy sector, especially solar, has made remarkable progress in lowering costs. Today, solar energy is one of the cheapest sources of new electricity in the United States. However, despite falling prices, large-scale projects still rely heavily on financial incentives to offset their high upfront expenses.

According to Wood Mackenzie, the U.S. solar industry installed 10.8 gigawatts (GWdc) of new capacity in Q1 2025. This was a 7% drop compared to Q1 2024 and a 43% decrease from Q4 2024.

If these federal benefits are removed, it could significantly slow the pace of new solar developments. It may also discourage private investors at a time when international competition in green energy is heating up.

What’s Next for U.S. Energy Policy Under Trump?

Supporters of the move believe that Trump’s new policy will help restore American energy independence and reduce unnecessary government spending. His energy policy puts the spotlight back on fossil fuels and nuclear power. On his first day back, he declared a “National Energy Emergency” aimed at eliminating what he calls bureaucratic barriers to energy production.

Fossil Fuels Back in the Spotlight

So, as part of this plan, he established the National Energy Dominance Council, which will focus on increasing fossil fuel production, attracting private investment, and accelerating domestic energy production.

According to Trump, returning to traditional energy sources will strengthen the economy, create well-paying jobs, reduce trade deficits, and improve the U.S. position on the global stage.

A Major Clean Energy Setback 

Countries across Europe and Asia are increasing their investments in renewables, treating green energy as both an environmental and economic priority.

• According to the IEA’s World Energy Investment 2025 report, global energy investment is projected to reach $3.3 trillion in 2025.

Out of this, approximately $2.2 trillion will go toward clean energy sources like renewables, nuclear, power grids, storage, low-emission fuels, energy efficiency, and electrification. That’s twice the amount, around $1.1 trillion, allocated to fossil fuels like oil, gas, and coal.

• So if the U.S. steps back from clean energy leadership, it could fall behind in both technology development and global market share.

Thus, critics warn that this approach overlooks the long-term risks of continued reliance on fossil fuels, especially in a world already experiencing the impact of climate change.

Many cities, companies, and even Republican-led states have embraced renewables, not just for environmental reasons but also for economic growth. Pulling back federal support now, they say, risks stalling progress and undermining years of clean energy investment.

The Bottom Line: U.S. Climate Goals at Crossroads

In the near term, this executive order is expected to cause major uncertainty across the wind and solar industries. Projects currently in the pipeline could be delayed or canceled entirely.

Developers who had planned on receiving federal tax credits now face stricter deadlines and higher costs. Meanwhile, states will need to reevaluate their clean energy goals and consider alternative funding methods to stay on track.

Over the next several months, federal agencies will begin to implement the executive order. Their decisions and the public and state-level responses will shape the future of U.S. energy policy. Whether this move marks a new era of energy dominance or a costly detour from climate leadership remains to be seen.