Trump Tightens Tax Credit Rules For Renewables

Current conditions: After briefly strengthening into a Category 5 storm, Hurricane Erin continues toward Puerto Rico as a Category 4 • China is reeling from flash floods that killed 10 in Inner Mongolia on Sunday • Spain is battling 20 major wildfires as blazes across Europe displace thousands.

THE TOP FIVE

1. Trump tightens the vise on wind and solar tax credits

The Internal Revenue Service released guidance on Friday for wind and solar projects attempting to access the federal tax credits that start phasing out next year. For more than a decade, renewable developers needed to show only that they’d spent 5% of the total cost of the construction to qualify in a given tax year. Once the new rules kick in next month, almost all new projects will need to actually begin physical construction to be eligible. The change comes in response to an executive order President Donald Trump issued after signing the One Big Beautiful Bill Act, which directed the Treasury Department to raise the hurdles for wind and solar developers to tap what remained of the federal tax credits the new law had dramatically curtailed.

Trade associations representing renewables developers balked at the new rules. But solar stocks soared on Friday in large part because the guidance was less strict than many had anticipated, as I reported for Latitude Media. Prior to its release, some sources had speculated to me that the guidance could lift the investment threshold from 5% to somewhere closer to 51%, effectively requiring that developers spend more than half the total cost upfront or lose out on tax credits. “It’s not good, it’s not helpful, but from my perspective, the guidance could have been a lot worse,” David Burton, a partner at Norton Rose Fulbright who specializes in energy tax credits, told Heatmap’s Emily Pontecorvo. “Utility-scale solar and wind developers should be able to plan around this and not be that harmed.” This past weekend was also the third anniversary of many of these tax credits, which were created by the 2022 Inflation Reduction Act. As Center for Public Enterprise researcher Advait Arun wrote in an essay for Heatmap, going beyond past policy endeavors to “deliver an energy policy that stabilizes Americans’ cost of living while driving an energy transition away from fossil fuels and toward the technologies of the future ― Democrats should embrace this challenge. But they should also be aware that climate ambition runs headlong into the same institutional problems facing American democracy at large.”

2. TVA inks U.S. utility sector’s first deal for next-generation nuclear power

For all the hype around building new types of reactors, the only new nuclear deals U.S. utilities have so far finalized involve what’s called third-generation designs. That means the reactors are still cooled with water like the rest of the traditional U.S. nuclear fleet, and include everything from the large-scale Westinghouse AP1000 to the small modular reactors NuScale and GE Vernova-Hitachi Nuclear Energy are promoting. On Monday, the Tennessee Valley Authority became the first U.S. utility to sign onto a power purchase agreement to buy electricity from what’s called a fourth-generation reactor company, whose SMR design uses a coolant other than water. The company, Kairos Power, is building its first reactor in Oak Ridge, Tennessee, with backing from Google. Under the terms of the new deal announced this morning, Google will buy as much power from the TVA grid as Kairos’ debut reactor produces.

If successful, the project could be the first next-generation nuclear plant to hook onto the U.S. grid. Reaching that goal has become a major political priority for the Trump administration since China hooked its first fourth-generation nuclear plant onto its grid last December.

3. Global talks for a plastics treaty end in ‘abject failure’

For two weeks, international negotiators gathered in Geneva to hash out a global treaty to curb plastic pollution. More than 100 countries backed a pledge to halt production of new plastic waste. But oil-producing nations whose crude petroleum is transformed into plastics blocked the effort. Those included the United States, Saudi Arabia, and Russia. When talks ended last Friday, the nonprofit Center for International Environmental Law called the process “an abject failure.”

“When faced with a failure of this magnitude, it’s essential to learn from it,” David Azoulay, the head of the center’s delegation to the talks, said in a statement. “It’s impossible to find a common ground between those who are interested in protecting the status quo and the majority who are looking for a functional treaty that can be strengthened over time.”

4. Green groups sue Energy Department over revised climate report

The Environmental Defense Fund and the Union of Concerned Scientists sued the Department of Energy, accusing the agency of violating the law by secretly recruiting a group of people who reject the scientific consensus on climate change to author a report downplaying the risk of rising temperatures. The lawsuit alleges that Secretary of Energy Chris Wright “quietly arranged for five handpicked skeptics of the effects of climate change” to form a committee called the Climate Working Group. This, the litigation alleges, violates the Federal Advisory Committee Act of 1972,which does not allow federal agencies to recruit or rely on secret groups when engaging in policymaking, according to The New York Times.

5. Puerto Ricans are suffering more blackouts even if you exclude hurricanes

Without major events such as a hurricane, Puerto Ricans lost power for a combined 30 hours last year..EIA

Puerto Ricans experienced an average of 27 hours of combined power grid interruptions each year between 2021 and 2024, according to new data from the U.S. Energy Information Administration. And that’s without counting major events such as hurricanes. By comparison, ratepayers in the mainland United States experienced about two hours of outages per year without major events. The frequency of blackouts increased throughout the three-year period. On average, Puerto Ricans faced 19 service interruptions in 2024: 14 without major events and 5 from major events.

The frequency of outages also increased last year. EIA

Earlier this month, Trump fired nearly the entire fiscal control board that Congress put in charge of the U.S. territory’s finances. His administration has said the terminations are part of an overhaul meant to reindustrialize the bankrupt island.

THE KICKER

Massachusetts Institute of Technology researchers uncovered a link between the properties of graphite and how the material behaves in response to radiation. The findings could lead to more accurate, less destructive ways of predicting the lifespan of graphite materials in nuclear reactors. “The paper proposes an attractive idea for industry: that you might not need to break hundreds of irradiated samples to understand their failure point,” Boris Khaykovich, the MIT research scientist who authored the study, said in a statement.