President Donald Trump’s One Big Beautiful Bill (OBBBA), enacted on July 4, 2025, aims to phase out tax credits for wind and solar energy by mid-2026. The legislation’s implications extend far beyond these incentives, unsettling the financial and insurance frameworks that underpin the U.S. clean energy sector. With new deadlines mandating that projects commence construction by July 4, 2026, or be operational by December 31, 2027, to qualify for credits, the industry faces significant shifts.
The removal of the 5% cost-based safe harbor beginning on September 1, 2025, has further complicated matters. This change restricts eligibility to only those projects that show tangible physical progress, creating uncertainty among lenders and insurers regarding the timing and viability of returns on investment. According to Meredith Annex, Head of Clean Power at BloombergNEF, “We’re really now seeing the impacts of what the new reality in the U.S. has meant for investor confidence.” In the first half of 2025, investments in wind and solar saw a dramatic decline of 36% year-on-year, totaling $36.4 billion, with onshore wind investments plummeting by 80%.
Underwriters in the insurance sector are also adjusting their risk models in response to this new political landscape. Canaan Crouch of Jencap Specialty Insurance Services noted that rising insurance premiums add further financial pressure. “Higher insurance premiums add another cost burden to contractors and developers already grappling with reduced subsidies, higher tariffs, and volatile demand.” This shift is redefining how projects are valued and financed, creating a challenging environment for developers.
Impact on Major Players and Project Viability
The implications of OBBBA are affecting some of the largest companies in the clean energy sector. Denmark’s Ørsted, a leader in offshore wind, has announced a $9.4 billion emergency rights issue after encountering policy hurdles with its U.S. projects, Sunrise Wind and Revolution Wind. A federal stop-work order, citing national security concerns, halted construction on Revolution Wind, which was nearly 80% complete. Ørsted has since initiated legal action against the Trump administration, while incurring substantial weekly holding costs. S&P Global has downgraded Ørsted’s credit rating, though Equinor, a 10% shareholder, has committed up to $941 million in support.
The turmoil is also felt in the residential solar market. Companies like Sunnova and Mosaic have filed for Chapter 11 bankruptcy, attributing their struggles to uncertainty over tax credits and declining demand. Reports indicate that Sunnova laid off over 700 employees before its bankruptcy filing, citing insurmountable debt and market retraction. Mosaic, another prominent solar loan provider, also succumbed to bankruptcy, highlighting the broader economic challenges and instability in policy.
Analysts predict a 50-60% reduction in residential solar demand, which could jeopardize over 250,000 jobs in the sector. Ara Agopian, CEO of Solar Insure, remarked, “There’s going to be a 50 to 60 percent downturn in demand. Many of them will shut their doors as they can’t stay in business without the tax credit.”
Widespread Industry Disruption and Future Outlook
States are not exempt from the law’s repercussions. Texas, historically a renewable energy stronghold, has seen nearly $8 billion in clean energy projects canceled or delayed. Nationally, BloombergNEF has recorded over $22 billion in shelved clean energy development, leading to the loss of more than 16,000 jobs.
The implications of OBBBA extend beyond wind and solar to the battery and hydrogen sectors as well. The law phases out credits for battery manufacturing and accelerates deadlines for hydrogen projects under Section 45V. Experts from the International Council on Clean Transportation estimate that U.S. battery production could fall 75% short of projections by 2030, further disrupting the clean energy value chain.
In the wake of these changes, banks that previously offered favorable loan terms are now widening their spreads to account for heightened policy risk. Credit rating agencies have flagged concerns over future cash flows as potential triggers for downgrades. Institutional investors, who previously fueled the tax-equity boom of the past decade, are becoming increasingly selective, with some halting commitments entirely until the regulatory landscape stabilizes.
What emerges is a clearer picture of OBBBA’s impact: a significant erosion of the financial ecosystem supporting the clean energy industry. Insurance premiums are escalating, lenders are retreating or demanding new risk-adjusted returns, and developers are struggling to secure the capital necessary to maintain operations. The future of the clean energy sector hangs in a precarious balance, with ongoing uncertainty posing challenges for all stakeholders involved.
