Daily legislative hurdles for renewable energy in the USA
Almost every day, new rules or policy changes emerge in the USA that place further barriers in the way of renewable energy projects. Wind and solar have been singled out most often, creating an environment in which developers face not just uncertainty but a series of obstacles that appear designed to slow deployment. By the time this note is published, it is likely that further announcements will already have been added to the list.
The US Department of Agriculture (USDA) has restricted how its programmes can support renewable energy. Solar projects are no longer allowed on prime farmland, and equipment from countries labelled foreign adversaries is banned. The USDA has also removed wind and solar from eligibility for its Rural Development Business and Industry Guaranteed Loan Program. Under the Rural Energy for America Program, only small, on-site systems will qualify, with priority points for solar projects eliminated.
The US Department of Commerce has expanded steel and aluminium tariffs to cover 407 additional products, including wind turbine components. These goods are now subject to a 50% tariff on their metal content, a cost that flows directly into higher project expenses. In addition, the Department has begun an investigation under Section 232 of the Trade Expansion Act of 1962 into imports of wind turbines and their components to assess potential national security risks. Public comments on issues such as domestic capacity, foreign supply chains, and trade practices are now being sought.
The US Department of the Treasury and the Internal Revenue Service have narrowed eligibility for federal tax credits. Large projects can no longer qualify through the ‘5% safe harbour’, which previously allowed developers to claim credits with upfront equipment purchases. Instead, physical work on-site must begin quickly, and projects must be completed within four years.
The Department of the Interior has introduced ‘capacity density’ as a new evaluation criterion for projects on federal lands. This disadvantages large-scale wind and solar, which require more space compared with alternatives such as nuclear or gas. The Department has also cancelled all previously designated Wind Energy Areas on the Outer Continental Shelf, withdrawing more than 3.5 million acres earmarked for offshore projects in the Gulf of Mexico, Gulf of Maine, California, Oregon and elsewhere. Future leasing is now suspended pending review, while new requirements demand longer consultations with coastal communities and fishing interests. The Department is also considering whether turbine-related bird mortality should fall under the Migratory Bird Treaty Act, potentially adding further permitting and penalties. At the same time, Ørsted’s Revolution Wind project has been ordered by the Bureau of Ocean Energy Management to suspend offshore work. Construction was already 80% complete, underlining how even advanced projects are now facing sudden regulatory halts.
Transport policy has also been drawn in. The US Department of Transportation has reinstated guidance on turbine placement near highways and railways, recommending a minimum separation distance to the turbines of 1.2 miles (approximately 1.9 kilometres). The review, linked to radio frequency interference risks, affects 33 existing projects and may lead to broader restrictions after further studies.
The cumulative effect of these measures is clear. A recent analysis by McKinsey & Company suggests that high tariffs and restrictive policies could slow renewable deployment in the USA through 2035.
However, the outlook is not entirely bleak. Despite repeated setbacks, the renewable energy industry has shown strong resilience. Developers and investors have adapted before, whether through technological improvements, new financing models, or shifts in supply chains. The current wave of obstacles is serious, but the sector’s long-term fundamentals remain strong. Electricity demand is set to grow, costs of wind and solar continue to fall globally, and state-level commitments still drive significant new capacity. For the industry to succeed, resilience will once again be essential in overcoming the hurdles now being placed before it.
Enjoy reading,
Floris Siteur
Publisher/Editor-in-Chief
