Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTBy Nichola GroomFri, June 26, 2026 at 1:05 PM GMT+2 3 min readBy Nichola GroomJune 26 (Reuters) - U.S. solar developers have secured federal subsidies for a wave of projects large enough to nearly double current capacity, rushing to beat a July 4 deadline that could send renewable power costs sharply higher.The projections reflect the loss of valuable renewable energy tax credits worth at least 30% of project costs, a change that threatens to raise U.S. energy prices amid surging demand driven by artificial intelligence.The phaseout of the 20-year-old subsidies, accelerated under President Donald Trump's 2025 tax law, could drive contract prices for wind and solar energy up by 40% to 50%, with early data from Texas showing prices for some deals up 120%, according to an analysis by LevelTen Energy.The shift comes as Trump administration policies seek to slow renewable energy development, increasing reliance on fossil fuels despite natural gas turbine supply bottlenecks and mounting pressure for federal support for coal.U.S. President Donald Trump has repeatedly argued that renewable energy sources like solar and wind are too expensive, receive unfair subsidies, and are less reliable than fossil fuels because they depend on the wind blowing or the sun shining. The White House did not immediately respond to a request for comment.The looming tax credit loss has created a pipeline of more than 200 gigawatts of solar capacity with credits effectively secured, according to energy research firm Wood Mackenzie — nearly enough to double the current U.S. solar fleet. Solar is the fastest growing U.S. electricity source.Buyers that fail to secure contracts with projects in that pipeline will face far higher costs."It should give caution to folks that are waiting on the sideline," said Connor Valaik, a senior manager at LevelTen, which connects renewable electricity sellers and buyers. "The future is not the rosiest with this tax credit cliff."The data is preliminary because project developers have rushed to preserve tax credit eligibility by "safe harboring," which can include starting site construction work, buying key equipment, logging worker hours or spending a portion of project costs, before July 4. Under federal tax rules there is a four-year window to complete those facilities, many of which are still seeking buyers for their power.Contract proposals are increasingly including subsidy-free cost estimates because projects in early stages of development may not be able to clinch tax credit eligibility, LevelTen said.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info