Major Turnaround for US Wind and Solar Power Industries

On the afternoon of July 4, US President Trump signed the "Big and Beautiful" tax and spending bill, marking the official enactment of this controversial legislation.

The bill narrowly passed in the US House of Representatives on July 3, and Trump successfully incorporated the signing ceremony into the celebration of America's "Independence Day."

For the wind and solar power industries, the final version of the bill brings short-term relief, as the proposed tax on wind and solar power projects in previous versions has been removed.

Final Version of the Bill Removes Additional Taxation on "Restricted Foreign Entities"

According to ROTH analysts, the final version passed by the Senate deleted the new excise tax provision targeting projects involving "Restricted Foreign Entities" (FEOC). This tax, which was suddenly proposed in the bill version released last week, aimed to tax wind and PV projects that received any assistance from FEOC, sparking strong opposition from the industry.

Additionally, the plan to prematurely terminate the Investment Tax Credit (ITC) and Production Tax Credit (PTC) for wind and PV projects has been eased. Although December 31, 2027, is still set as the "commercial operation deadline" to qualify for the Clean Electricity Production Tax Credit under Section 45Y and the Investment Tax Credit under Section 48E of the Inflation Reduction Act (IRA), exemptions have been preserved for newly commenced projects.

Christian Roselund from Clean Energy Associates posted on LinkedIn, noting that projects can receive ITC/PTC support under current policies as long as they commence within 12 months after the bill's enactment.

Philip Shen, a senior analyst at ROTH, also confirmed, "If the final version becomes law, projects can commence before mid-2026 and enjoy a four-year construction window with 100% ITC/PTC. This will prevent a massive cliff in project volume in 2028."

Bill Adjustment Details Clarified: ITC/PTC Timeline Set, 45X Encourages Integrated Manufacturing

Abigail Ross Hopper, President and CEO of the Solar Energy Industries Association (SEIA), shared a detailed interpretation of the bill on LinkedIn, including: Solar Excise Tax Provision: No new excise taxes will be imposed on solar projects.

25D Provision: The residential solar tax credit will no longer be applicable after December 31, 2025.

45Y/48E Provision: PV facilities that commence construction more than 12 months after the enactment of the Act must be operational by December 31, 2027, to qualify for the tax credit. This provision does not apply to ESS projects.

Domestic Content Incentive: Corrects the drafting error in the IRA regarding the domestic content bonus credit under Section 48E. Projects that commence construction on or after June 16, 2025, must meet a 45% domestic content requirement, which will increase annually.

45X Provision Update: Integrated production of modules must be completed in the same factory, and the final product must be sold to an unrelated third party. At least 65% of the material costs must originate from the US. The definition of "battery module" has been redefined. Key mineral incentives will be phased out starting in 2031.

FEOC Restrictions: From the enactment date of the Act, restricted foreign entities and foreign-influenced enterprises will be ineligible for the 45Y/48E/45X tax credits.

Renewable Energy Stocks Rebound, Manufacturers Respond Positively to New Regulations

According to media reports, with the removal of tax concerns, the stock prices of several renewable energy companies have risen. T1 Energy stated that its manufacturing and operational model will align smoothly with the final version of the Act, preserving the transferability and stackability of the 45X provision, which is crucial for domestic PV manufacturers.

T1 Energy said, "If integrated battery and module manufacturing projects in the US can stack the 45X credit, it will make a substantial contribution to the company's EBITDA."

Please note that this news is sourced from https://guangfu.bjx.com.cn/news/20250707/1449773.shtml and translated by SMM.