Provisions in President Trump’s One Big Beautiful Bill Act phasing out tax breaks for solar and wind projects would stunt such development in Texas and make these renewable energy sources more expensive, industry representatives and energy experts said.
They said those rollbacks, passed as part of the legislation by the Senate 51-50 on Tuesday and by the House 218-214 on Wednesday, would also increase the demand for, price of, and reliance on natural gas.
Texas’ two Republican U.S. senators, John Cornyn and Ted Cruz, voted in favor of the legislation. The state’s House members approved the bill 25-12 along party lines, with all 25 Republicans voting in favor.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), a trade group with more than 1,200 members and a strong lobbying presence in Texas, said the reconciliation bill would set back America’s global competitiveness and weaken industries powering our economy and national security.
“It will strip the ability of millions of American families to choose the energy savings, energy resilience and energy freedom that solar and storage provide,” Hopper said in a statement.
The association that represents all U.S. investor-owned electric companies, the Edison Electric Institute, estimates that in Texas, the repeal of federal credits would raise annual energy costs per household for both electricity and fuel by more than $90 a year in 2030 and by more than $370 a year in 2035.
It’s not just costs going up in Texas as a result of the One Big Beautiful Bill Act, said Doug Lewin, a Texas energy consultant. It would spike risk, too, of conservation alerts and energy emergencies faced by the Electric Reliability Council of Texas (ERCOT) at times of peak power demand on the state’s power grid.
As triple-digit temperature days approach, Lewin remembers what grid reliability looked like without significant contributions from solar. Today, solar makes up nearly 20 percent of ERCOT’s capacity and continues to break records during peak demand. There were multiple days in June that solar, coupled with wind, met more than half of the state’s peak energy demand.
In 2019, solar made up less than two percent of the grid’s fuel mix. Low power reserves that summer resulted in two afternoon occasions of emergency conditions. It was the first time ERCOT had declared an emergency since 2014.
“For a while, we’ll be OK at that time of day, because we have so much solar already—there’s quite a bit of buffer,” Lewin said. “But over time that buffer will erode.”
There are plenty of batteries and solar on the way in ERCOT. With roughly 400 gigawatts of capacity in the grid’s growing line of interconnection requests, about 40 percent each are batteries and solar. Lewin guesses the developers in line will rush to get their projects operational, if possible, to be shielded from new policy deadlines that affect whether they are eligible for tax credits.
The bill makes many wind and solar projects ineligible for federal tax credits unless they are “in service” by 2027—an even faster cutoff was adopted by the Senate, with the original House version setting a 2028 deadline.
“There’s obviously a lot of uncertainty and uncertainty is never good for investment or development, right?” Lewin said.
While renewables are dominating capacity additions within ERCOT, clean energy projects waiting for interconnection are also cancelling their developments at a rate unseen since the pandemic. Twelve solar and battery projects totaling more than 2,600 megawatts of capacity in the interconnection queue had cancelled their projects during June, according to ERCOT data. In May, the developers of 16 renewable energy projects totaling more than 3,700 megawatts in Texas had pulled their interconnection requests.
Federal policy changes, including elimination of subsidies offered through the Inflation Reduction Act and shifting tariffs, could affect these planned capacity expansions, the Federal Reserve Bank of Dallas has reported. The state is slated to account for 35 percent of new U.S. power additions, but certain legislative actions could dampen this growth, the Dallas Fed reported.
The bill phases out wind and solar tax credits for any projects not “in service” by 2027. That was a huge change for developers, who may have some control over construction start dates, but far less control over when a project is actually “in service,” which can change due to supply chain and labor issues, as well as the decisions of permitting officials and grid operators.
An earlier version of the bill in the Senate included a new excise tax on wind and solar, but renewable energy advocates succeeded in getting that removed before the final Senate vote. A provision was also added in the Senate that would give an array of clean-energy projects a safe harbor of sorts, protecting them from the phase-out of tax incentives if they begin construction within the next 12 months.
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This article appears in Jun 26 – Jul 9, 2025.