The passage of the BBB introduces uncertainty for clean energy by tightening tax credit timelines and restricting supply chain sources. But with demand from corporations and states holding firm, Trillium continues to support companies enabling the low-carbon transition.
The passage of the most recent budget reconciliation bill, given the alliterative moniker of “Big Beautiful Bill” (BBB) by President Trump, has created a significant level of uncertainty for the clean energy industry. The bill reduces federal support for technologies that are critical to the achievement of several of the administration’s stated economic and geopolitical goals, instead focusing on regressive industries and outdated technologies. This backslide may weaken the United States’ competitive position in a pivotal period of technological change and infrastructure expansion and put us further behind in the race to avoid the most extreme consequence of climate change. While the US government’s exit as a key partner in the development and adoption of clean technologies creates a meaningful headwind for the industry, we believe proclamations of its looming collapse are overstated. Overall market dynamics and state-level policies can remain supportive of clean energy and warrant cautious long-term optimism.
President Donald Trump has made no secret of his disdain for wind and solar energy, spreading misinformation that the technologies are expensive, unreliable, inefficient, and “ugly as hell”. While actively railing against the technologies of today and tomorrow, his administration has opened its arms to “beautiful clean coal” and other regressive industries. These statements are in alignment with the talking points and policy prescriptions of the fossil fuel industry, however they run counter to many of the administration’s stated goals around AI leadership, reshoring, energy independence, and lowering the cost of living for Americans.
One of the ways the Administration and Legislature are setting the clock back on climate action is to attack the Inflation Reduction Act’s clean energy tax credits. The Inflation Reduction Act (IRA) included tax credits for clean energy project construction, electricity generation, and energy storage. Additional credits were granted to companies that used US-made components, located projects in low-income areas, or provided economic benefits to communities. The IRA successfully spurred clean energy development, generated manufacturing jobs, and contributed to the US’s energy independence. In the first two years of the IRA alone, businesses announced $130 billion in investments in 338 major clean energy and clean vehicle projects, expected to create at least 110,000 jobs.
Tax credits that incentivize clean energy are needed to help our country meet the energy demands of economically expansionary activities without hastening the worst outcomes of climate change and creating unnecessary cost increases for consumers. Today, energy demand increases are largely being driven by data center growth and manufacturing reshoring, key pillars for US economic growth for the previous and current administrations. The North American Electric Reliability Corporation forecasted 78 GW of winter peak demand growth over the next ten years, almost double its forecast two years prior. Wood Mackenzie predicts a 7% compound annual growth rate in electricity demand. Much of this demand is expected to be met by renewable energy technologies, which are relatively cheap and easy to install.
Despite the case for clean energy tax credits, Trumps’ budget reconciliation bill attempts to significantly weaken the credits. Signed into law on Jul 4, 2025, the bill makes requirements for wind and solar power much more stringent. While the BBB made many changes, the key update is that wind and solar projects must now begin construction by July 2026 to qualify for tax credits, rather than having until the mid 2030s. Projects then have four years from construction or safe harbor start to be placed in service. Credits will be denied if projects receive material assistance from companies tied to “Foreign Entities of Concern”, which includes China. China is a major player in the renewable energy supply chain, so this stipulation limits the industry significantly.
In effect, the bill serves to curtail capital investment in US electricity and clean fuel production, raise US household and business energy expenditures, and generate uncertainty around the renewables industry. Princeton University’s ZERO lab published an excellent analysis of the bill’s societal impacts, finding that the BBB may decrease clean electricity generation in 2035 by more than 820 terawatt-hours -- more than the entire contribution of nuclear or coal to our electricity supply today. Beyond the bill’s impact, President Trump can continue to throw up roadblocks to the clean energy industry by issuing executive orders, an ongoing concern.
So, is clean energy dead? Not at all. Companies can still safe harbor their projects by spending a set amount of Capex to effectively start their projects within the BBB timeframe, allowing them to earn the full credits they would have gotten in the absence of the BBB. The bill also does not significantly affect clean energy storage, geothermal, or nuclear energy, providing other low-carbon avenues for companies seeking cleaner value chains.
Even with the BBB, there is a continued demand from companies and consumers for clean and renewable energy. Corporate carbon emissions-free energy procurement has grown to 13 GW annually between 2021 and 2023, as companies strive to meet net zero commitments. About 50% of solar additions to the grid are contracted through PPAs for such customers, who should maintain demand for renewable energy regardless of the BBB. Solar energy in particular is cheap and readily available to meet energy demand, contrasting with slow and expensive new gas turbines (not to even mention new coal production, a financial unfeasible option regardless of the federal policy backdrop).
We should also remember that the federal government is not the be-all and end-all in US politics. State governments can stand firm behind renewable energy through renewable portfolio standards, state level incentives and financing programs, net metering and interconnection standards, community solar programs, and other utility regulations. Though all four senators from Texas and Florida voted for the BBB, their states lead the US in renewable energy jobs, along with California and New York. States can and should continue to push forward renewable energy as both a social good and a common-sense measure.
As for Trillium, while the current environment is challenging, we believe that technological innovation and expansion of clean energy infrastructure are key catalysts for sustainable growth and the health of our planet. We continue to stand behind companies that are invested in and enabling the clean energy transition. Long term, these companies are avoiding negative externalities related to climate change while putting themselves in the best position to seize the low carbon opportunities that very much still exist. We are actively engaging with some of the largest buyers of power to encourage continued commitment to and expansion of their climate goals, and are working in partnership with other investors to educate lawmakers on the economic, social, and environmental benefits of strong forward-looking energy policies.
The passage of the most recent budget reconciliation bill, given the alliterative moniker of “Big Beautiful Bill” (BBB) by President Trump, has created a significant level of uncertainty for the clean energy industry. The bill reduces federal support for technologies that are critical to the achievement of several of the administration’s stated economic and geopolitical goals, instead focusing on regressive industries and outdated technologies. This backslide may weaken the United States’ competitive position in a pivotal period of technological change and infrastructure expansion and put us further behind in the race to avoid the most extreme consequence of climate change. While the US government’s exit as a key partner in the development and adoption of clean technologies creates a meaningful headwind for the industry, we believe proclamations of its looming collapse are overstated. Overall market dynamics and state-level policies can remain supportive of clean energy and warrant cautious long-term optimism.
President Donald Trump has made no secret of his disdain for wind and solar energy, spreading misinformation that the technologies are expensive, unreliable, inefficient, and “ugly as hell”. While actively railing against the technologies of today and tomorrow, his administration has opened its arms to “beautiful clean coal” and other regressive industries. These statements are in alignment with the talking points and policy prescriptions of the fossil fuel industry, however they run counter to many of the administration’s stated goals around AI leadership, reshoring, energy independence, and lowering the cost of living for Americans.
One of the ways the Administration and Legislature are setting the clock back on climate action is to attack the Inflation Reduction Act’s clean energy tax credits. The Inflation Reduction Act (IRA) included tax credits for clean energy project construction, electricity generation, and energy storage. Additional credits were granted to companies that used US-made components, located projects in low-income areas, or provided economic benefits to communities. The IRA successfully spurred clean energy development, generated manufacturing jobs, and contributed to the US’s energy independence. In the first two years of the IRA alone, businesses announced $130 billion in investments in 338 major clean energy and clean vehicle projects, expected to create at least 110,000 jobs.
Tax credits that incentivize clean energy are needed to help our country meet the energy demands of economically expansionary activities without hastening the worst outcomes of climate change and creating unnecessary cost increases for consumers. Today, energy demand increases are largely being driven by data center growth and manufacturing reshoring, key pillars for US economic growth for the previous and current administrations. The North American Electric Reliability Corporation forecasted 78 GW of winter peak demand growth over the next ten years, almost double its forecast two years prior. Wood Mackenzie predicts a 7% compound annual growth rate in electricity demand. Much of this demand is expected to be met by renewable energy technologies, which are relatively cheap and easy to install.
Despite the case for clean energy tax credits, Trumps’ budget reconciliation bill attempts to significantly weaken the credits. Signed into law on Jul 4, 2025, the bill makes requirements for wind and solar power much more stringent. While the BBB made many changes, the key update is that wind and solar projects must now begin construction by July 2026 to qualify for tax credits, rather than having until the mid 2030s. Projects then have four years from construction or safe harbor start to be placed in service. Credits will be denied if projects receive material assistance from companies tied to “Foreign Entities of Concern”, which includes China. China is a major player in the renewable energy supply chain, so this stipulation limits the industry significantly.
In effect, the bill serves to curtail capital investment in US electricity and clean fuel production, raise US household and business energy expenditures, and generate uncertainty around the renewables industry. Princeton University’s ZERO lab published an excellent analysis of the bill’s societal impacts, finding that the BBB may decrease clean electricity generation in 2035 by more than 820 terawatt-hours -- more than the entire contribution of nuclear or coal to our electricity supply today. Beyond the bill’s impact, President Trump can continue to throw up roadblocks to the clean energy industry by issuing executive orders, an ongoing concern.
So, is clean energy dead? Not at all. Companies can still safe harbor their projects by spending a set amount of Capex to effectively start their projects within the BBB timeframe, allowing them to earn the full credits they would have gotten in the absence of the BBB. The bill also does not significantly affect clean energy storage, geothermal, or nuclear energy, providing other low-carbon avenues for companies seeking cleaner value chains.
Even with the BBB, there is a continued demand from companies and consumers for clean and renewable energy. Corporate carbon emissions-free energy procurement has grown to 13 GW annually between 2021 and 2023, as companies strive to meet net zero commitments. About 50% of solar additions to the grid are contracted through PPAs for such customers, who should maintain demand for renewable energy regardless of the BBB. Solar energy in particular is cheap and readily available to meet energy demand, contrasting with slow and expensive new gas turbines (not to even mention new coal production, a financial unfeasible option regardless of the federal policy backdrop).
We should also remember that the federal government is not the be-all and end-all in US politics. State governments can stand firm behind renewable energy through renewable portfolio standards, state level incentives and financing programs, net metering and interconnection standards, community solar programs, and other utility regulations. Though all four senators from Texas and Florida voted for the BBB, their states lead the US in renewable energy jobs, along with California and New York. States can and should continue to push forward renewable energy as both a social good and a common-sense measure.
As for Trillium, while the current environment is challenging, we believe that technological innovation and expansion of clean energy infrastructure are key catalysts for sustainable growth and the health of our planet. We continue to stand behind companies that are invested in and enabling the clean energy transition. Long term, these companies are avoiding negative externalities related to climate change while putting themselves in the best position to seize the low carbon opportunities that very much still exist. We are actively engaging with some of the largest buyers of power to encourage continued commitment to and expansion of their climate goals, and are working in partnership with other investors to educate lawmakers on the economic, social, and environmental benefits of strong forward-looking energy policies.
Learn how Trillium’s impactful investment strategies transform investor capital into a catalyst for change.
