A year ago, the GOP’s One Big Beautiful Bill overhauled clean energy tax credits and set off a rush to safe harbor projects before those credits begin to phase out. At the time, many worried that the bill would have a chilling effect on clean energy development. But in the 12 months since, the sector has instead surged, with wind, solar, and storage dominating new capacity additions to the grid.
Those wind and solar projects that managed to commence construction before July 4 now have four years to build and come online and still qualify for the credits. But the challenges those projects will face between starting construction and connecting to the grid are many — and even still remain in flux.
According to Jason Clark, CEO of policy intelligence platform Power Brief, their main three hurdles are permitting, tariffs, and “foreign entity of concern” rules. Developers and manufacturers should expect movement on each of those fronts in the coming months, Clark explained on a recent Latitude Dispatch — but the landscape in which those updates will land is starkly different to the one in which they were conceived in early 2025.
“We used to live in a world where electricity demand was flat, and as such every new electron was stealing market share from somebody else, and it was who’s winning and who’s losing,” he said. Now though, huge demand to power artificial intelligence and other new loads means that “everyone is going to ‘win’.”
The question, Clark said, is whether the government can “get out of the way so that private capital can show up.” Ultimately the only reason it might get hard to build in the coming months, he added, “is if the government makes it hard to build.”
Permitting
For now, Clark said the most pervasive issue for clean energy is permitting. According to new analysis by Wood Mackenzie, more than $121 billion worth of early-stage renewable energy projects are at risk of getting caught up in the administration’s permitting blockade, made up of five policies published last year.
Those policies include a requirement that Interior Secretary Doug Burgum’s office sign off on permits rather than career bureaucrats, changes to how the Army Corps of Engineers evaluates projects, and new constraints on projects interacting with federal lands, among others.
Each of those moves has been temporarily blocked by a federal district court, but the Trump administration has filed appeals in nearly every case. Clark explained that that means developers are operating under an injunction that could still be reversed, with the underlying legal questions still far from resolved.
One key impact of this permitting challenge, Clark said, is that the clean energy sector has had to change its strategy for fighting back. The industry has traditionally leaned on “white paper” advocacy, coalition building, and direct engagement with agencies. That tends to be “a faster way to align interests and to get everyone on the same page and find a path forward,” he explained.
In the Trump era, however, that longstanding approach isn’t working, and the industry is instead turning to the courts.
Several lawsuits are currently pending, including earlier cases brought by state attorneys general over elements of the administration’s wind executive order, challenges from offshore wind developers ordered to halt work, and a new lawsuit targeting the Pentagon siting backlog.
“Litigation is certainly durable, but also very, very slow,” Clark explained.
There’s also an element of fear in the industry when it comes to suing an administration — though that worry may be misplaced: “Most industries sue most administrations, whether they’re aligned with them or not,” Clark added. “I think it’s a necessary evil in our current modern system that the industry is kind of building muscle memory around.”
Tariffs
The second major variable for projects trying to meet the tax credit timelines is cost — and especially tariffs. Developers that already lined up financing and began construction are now facing down a new wave of trade actions that could upend their underlying cost assumptions, Clark explained.
There’s a lot of movement coming in July and August on the tariff front: Post-July 4, “it’s tariff central,” he added. First, there’s the temporary 10% global tariff that replaced the now-struck-down IEEPA measures, which is set to expire on July 24th. The long-term replacements for those tariffs are still in limbo with some already announced and some still in the works. When they do get finalized, Clark added, “there’s going to be a whole new global paradigm.”
But the majority of the industry’s anxiety has to do with Section 232 tariffs, which the president can impose to protect national security. Historically, 232 tariffs on commodities like steel, aluminum, and copper have followed a somewhat predictable playbook, resulting in, say, a 25% or 50% tariff that developers can model in their project economics, Clark explained.
Now though, there’s a “real enough to be anxiety-provoking” rumor that polysilicon, a base input for crystal and silicon modules, could be subject to a much more complex structure, such as a minimum import price combined with additional tariffs, with carve‑outs for certain domestic products. That kind of outcome could break existing contracts, force wholesale procurement strategy changes, and fundamentally alter the economics of imported modules and cells, Clark said.
Compounding that anxiety is uncertainty around timing: The polysilicon case has already blown past both the historic average duration for Section 232 cases and the statute’s 360-day timeline. The industry is currently eyeing a potential August date, but there’s no guarantee a decision will come then either, he added.
FEOC
Unlike tariffs and permitting challenges, concern over “foreign entity of concern” rules stem directly from OBBB. These rules emerged as one of the biggest questions after the bill’s passage, in large part thanks to corporate structure restrictions which prevent companies from claiming tax credits if they are “effectively controlled” by a prohibited entity (namely China).
A year on, clarity on those rules remains elusive. Interim guidance issued by Treasury earlier this year focused primarily on the sourcing test, meaning how to do the math on what share of project components come from FEOCs. That guidance relied heavily on existing, technology-specific cost tables, and left technologies without tables, like geothermal, hydro, and nuclear, to do their own, more complex accounting.
But it’s still not clear who would qualify as a “foreign entity of concern.” And that ongoing ambiguity over how to determine alignment with FEOC rules, Clark explained, is making it tricky for the many parties involved in building a clean energy project to align on risk.
“You’ve got tax equity, tax credit insurers, developers, EPCs, suppliers, all pointing at each other saying ‘Are you going to bear the risk of how the rules are written?’” he said. “As long as this threat of new rules is coming…nobody wants to bear the burden of that risk.”
