In an executive order signed on July 7, President Donald Trump instructed the Treasury Department to strictly enforce the termination of the clean energy production and investment tax credits under sections 45Y and 48E in the tax code for wind and solar facilities.
He also ordered Treasury Secretary Scott Bessent to issue new and revised guidance to ensure that policies concerning the “beginning of construction” aren’t circumvented, including by preventing “the artificial acceleration or manipulation of eligibility” and by restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built, according to the executive order.
Under Republicans’ tax-and-spending bill that the president signed into law on July 4, solar and wind developments are eligible for tax credits if they begin construction within 12 months.
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House Freedom Caucus members had bashed the Senate’s version of the One Big Beautiful Bill Act for preserving “too much” of the clean energy tax credits. They argued that the bill would be “repeating the mistakes” of the Inflation Reduction Act of 2022, former President Joe Biden’s signature climate, health care, and tax package, where the clean energy tax credits stem.
- Related article: House Freedom Caucus Members Bash Senate Over Clean Energy Credits in Trump’s Tax Bill
But House Freedom Caucus members’ concerns were smoothed over before the GOP-led House of Representatives voted on July 3 to send the bill to Trump’s desk to sign, as the caucus voted in favor of the legislation.
“We got clarification of what’s going to be enforced. We got clarification on how the IRAs are going to be dealt with. We got clarification on the tax cuts. And still we’ll be meeting tomorrow on the specifics of it. But no, I feel comfortable with this,” Rep. Ralph Norman (R-SC), a House Freedom Caucus member, said on July 3 after the bill’s votes had been counted, according to published reports.
The executive order also calls for the implementation of restrictions on incentives for clean energy projects that have ties to foreign entities of concern, including China. In addition, Trump ordered the Department of the Interior to get rid of regulations that offer favorable treatment to wind and solar facilities, according to Bloomberg.
Photo caption: Treasury Secretary Scott Bessent looks on as President Donald Trump signs executive orders in the Oval Office of the White House on April 9, 2025, in Washington, D.C. (Anna Moneymaker/Getty Images/TNS)
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