By: WindNewsToday Staff | Source: Reuters
California Clean energy companies across the state are calling on Governor Gavin Newsom and state lawmakers to act swiftly in response to sweeping federal tax policy changes under President Donald Trump that risk billions of dollars in renewable energy investments and prompt challenges to California’s clean energy goals.
In a letter that went out earlier this week, five major clean energy trade groups, including the California Wind Energy Association and Solar Energy Industries Association, recently warned that Trump’s newly passed Republican-backed tax and spending law is creating significant roadblocks for continuing and forthcoming solar energy investments and wind energy projects in the Golden State. These organizations allege that California’s standing as a global leader on climate is at risk without state-level action.
Federal Tax Credits for Renewables Risk Being Rolled Back
At the center of the anxiety is a provision in the new federal law that phases out important renewable energy tax credits, beginning after 2026, for projects that have not yet started construction. Projects that start after the deadline will need to be on-line by the end of 2027 to receive any remaining incentives.
Complicating the matter, Trump has ordered the U.S. Treasury Department to issue rules that would limit who can still qualify for these tax credits by which energy developers. This extra uncertainty makes it likely that dozens of utility-scale solar, wind and energy storage projects will now be delayed.
“These modifications introduce a new and grave risk of delay or outright cancellation for dozens of clean power projects,” the letter asserts. “We are pulling ahead and we are happy with the progress,” he said, “but without immediate reform at the state level, California’s clean energy investments — and the jobs that come with them — are at risk.”
California’s Clean Energy Goals
California has established some of the most ambitious climate and renewable energy targets in the world. The state recently said that more than two-thirds of its 2023 retail electricity sales qualified as coming from renewable and zero carbon-emitting sources, and all across onlookers struggle to cope with the speed at which it is leading the global energy transition.
Reversing federal support for California clean energy is in stark contrast to the state’s climate vision and clean energy policy agenda, including the mandate for 100% clean electricity by 2045. Many of those developers have already invested heavily in California’s energy infrastructure, from solar farms to wind energy projects to battery storage.
Trade Groups Urge California to Put It in a Higher Gear
In their letter, the five trade groups, which are the Large-scale Solar Association, California Energy Storage Alliance and American Clean Power Association (California chapter) called on the state to do four things:
- Speed up approval for environmental permits and harmonies regulation for renewable energy schemes.
- Expand clean energy purchasing, especially from utility-scale wind and solar developers.
- Permit clean energy projects on farmland, which is underutilized for utility scale energy development.
- Strengthen investment in grid infrastructure for managing higher levels of renewable energy tax credits and maintaining energy reliability.
If California can expedite these reforms, the groups say, the state can insulate itself from the consequences of federal rollbacks and maintain renewable energy momentum.
Wind Power in Texas Is Another Story entirely
While California is in limbo, in a tale of stark contrast, here’s what is happening in Texas wind energy projects policy. We have even seen Republican-majority states, such as Texas, achieve success developing the nations largest wind energy industry, not by government mandate but by offering market-based incentives and less onerous permitting processes that attract investment in renewable infrastructure.
Wind power’s growth in Texas is an example of how bipartisan support — or, at least, pragmatic policy — can help speed up the growth of clean energy. With federal support declining, California may soon have to turn to the Texas model of wind energy if the state wants to maintain its energy transition goals.
Jobs, Reliability and Clean Power Are at Stake
Not only does the rollback represent a major threat to renewable energy developers, but it threatens thousands of the clean energy jobs that exist. If projects get put on hold or canceled, the economic effect could reverberate across jobs in construction, operations, engineering and maintenance.
And the uncertainty threatens grid reliability, particularly as California confronts increasing power demands and the need to replace retiring fossil fuel plants with clean options. The rollback would imperil jobs, stability and progress toward California’s clean energy goals, according to the letter.
The state especially benefits from the clean energy sector. In 2023 alone, solar and wind projects led to the creation of thousands of high-wage jobs and investment in rural towns. This loss of momentum could have far-reaching consequences for both climate goals and long-term economic resilience.
California Clean Energy Developers Raise Alarms as Federal Support Fades
This is a pivotal moment in the energy transition in the United States. The Biden administration had sought to reduce the shift toward clean energy by broadening tax breaks in the Inflation Reduction Act (IRA) but the rollback by Trump would negate much of the push.
The decision to trump clean energy rollback the federal energy tax credit is viewed by many in the industry as a big step in the wrong direction. Developers worry the uncertainty of future regulatory environments could scare off investment, particularly in long-lead-time projects such as offshore wind or grid-scale storage.
Clean energy backers are imploring more Democratic states to draw up backup plans akin to what California wants to do in order to shield renewable energy development from swinging federal policy.
Conclusion: It Takes State Action to Protect Clean Energy Gains
As California goes forward, the decision is unmistakable: without urgent state action, the rollbacks in federal support for clean energy could stall crucial projects, shake investor confidence in the market and set back the state’s progress toward an energy future free from carbon.
The industry leaders’ letter sends a strong signal: Federal energy policy may be on its back foot, but states like California still have the tools in hand to protect and advance their visions of a clean power future — if they use them boldly.
The office of Gov. Newsom has not responded publicly. Yet the pressure to answer that question is getting louder, with billions of dollars in California clean energy investments on the line and California’s climate leadership in the balance.
📖 Source:
Reuters – https://www.reuters.com/legal/litigation/solar-wind-groups-seek-california-aid-after-trump-subsidy-cuts-2025-07-16/
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Ismot Jerin is the founder and Editor-in-Chief of WindNewsToday, an independent publication covering offshore wind, renewable energy policy, and clean power markets with an analytical focus on the United States and global energy transition.
