U.S. tax credit phaseout raises renewable power contract prices
The accelerated phaseout of 20-year-old renewable tax credits under the 2025 tax law has driven developers to "safe harbor" projects ahead of a July 4 deadline, creating a pipeline of more than 200 gigawatts of solar capacity, Wood Mackenzie says. Analysts at LevelTen Energy warn contract prices for wind and solar could rise 40–50%, with some early Texas deals up 120%. The credits covered at least 30% of project costs, so their loss risks higher electricity prices even as demand from AI and other sources grows; some firms say unsubsidized projects remain competitive due to elevated power prices.
Phaseout could raise contract prices for renewables by 40–50%.
Context
Congress and the administration changed tax rules that end long-running renewable credits. Developers started construction or bought equipment before July 4 to keep credits. Prices may rise and some projects may be sold without credits.
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