Trump Order Imperils Billions In Clean Energy Projects The Data Center Industry Just Fought To Save

An executive order may jeopardize hundreds of billions of dollars of shovel-ready renewable energy projects that were spared in the final version of the One Big Beautiful Bill Act — after the tech and data center industries pushed for changes. 

The executive order that President Donald Trump signed Monday, titled Ending Market Distorting Subsidies for Unreliable Foreign Controlled Energy Sources, aims to restrict access to tax incentives for solar and wind projects.

While these renewable energy tax credits, critical for the viability of solar and wind development, were already being phased out through the One Big Beautiful Bill Act enacted July 4, the legislation included carve-outs in which solar and wind developments still qualify for subsidies as long as they begin construction within 12 months of the bill’s signing and are completed by 2027.  

Now, the administration is looking to slash the number of renewables projects that could qualify for tax credits during this yearlong grace period. The executive order calls on the Treasury Department to implement a more restrictive definition of what constitutes the “beginning of construction” and prevent solar and wind projects from securing tax credits unless “a substantial portion” of the project has already been completed. 

“For too long, the Federal Government has forced American taxpayers to subsidize expensive and unreliable energy sources like wind and solar,” the order reads. “The proliferation of these projects displaces affordable, reliable, dispatchable domestic energy sources, compromises our electric grid, and denigrates the beauty of our Nation’s natural landscape.”

The executive action comes after some Republicans were unsatisfied with the delayed phase-out of clean energy tax credits in the legislation, and reports emerged last week that Trump assured them he would take action to constrict clean energy projects. 

The final bill didn’t go as far in reducing new renewable energy development as some earlier versions. Prior drafts would have ended the tax credits immediately and pinned most wind and solar projects with a punitive excise tax.

The delayed phase-out of green tax credits came as a relief to groups like the Data Center Coalition and the tech-backed Clean Energy Buyers Association that had engaged heavily with lawmakers on the bill.

Tech giants like Microsoft, Google, Amazon and Meta are the world’s largest buyers of renewable energy, and the data center sector has driven a wave of low-carbon energy projects across the U.S. as the skyrocketing energy requirements of the artificial intelligence building boom have collided with Big Tech’s carbon reduction goals.

Although industry leaders have been generally critical of the bill, which they say needlessly shrinks the country’s future energy supply at the worst possible time and will likely raise power prices and impede data center development, the immediate termination of clean energy tax credits would have been particularly disastrous.

Industry insiders say the one-year grace period in the final bill prevented the cancellation of dozens of shovel-ready wind and solar projects. But this week’s executive order is raising alarm bells that these projects still face an uncertain future as they sit in the administration’s crosshairs. 

“A lot of people in the industry were very relieved that the bill’s final language gave them the ability to recover hundreds of billions of dollars of sunk investment by getting projects started by July of next year and completed by December of 2027,” said Martin Gitlin, an attorney with Nelson Mullins focused on renewable and alternative energy finance and development.

“The executive order, depending on how the Treasury and the IRS tighten the definition of commencement of construction, could strand all of that investment.” 

The degree to which the executive order could derail these power projects will depend on how Federal agencies rewrite the eligibility criteria around the tax credits — changes to well-established tax standards that Gitlin says will almost certainly be challenged in court. But he said he anticipates trouble ahead, a prediction echoed by other industry analysts who see in the executive order significant potential harm to the solar and wind sector. 

Just the uncertainty around eligibility for tax credits created by the executive order could be enough to scrap projects, said Derrick Flakoll, a senior policy associate for BloombergNEF.

“It’s a big deal, but how big a deal it is we don’t know,” Flakoll said to Inside Climate News. “It could push a lot of projects out of eligibility or into such an uncertain state of eligibility that it becomes hard to build and finance them.”