In July 2025, former President Donald Trump issued a sweeping executive order that could dramatically reshape the solar industry’s financial landscape. This directive instructs the U.S. Treasury to crack down on “safe harbor” provisions for renewable energy tax credits – effectively tightening the rules that allow solar.
projects to qualify for federal tax incentives based on when they begin construction . Coming on the heels of a new law (nicknamed the “One Big, Beautiful Bill Act”) that accelerates the phase-out of clean energy credits, Trump’s order underscores a broader agenda to roll back support for solar and wind. According to a White House fact sheet, the administration aims to “terminate” the production and investment tax credits for wind and solar and enforce stricter Foreign Entity of Concern (FEOC) rules on projects, in order to eliminate “unreliable ‘green’ energy subsidies” and prioritize “reliable, dispatchable” power sources .
For solar equipment manufacturers, project developers, and B2B buyers in the renewable energy supply chain, these policy shifts signal major changes in strategy. In this article, we break down what the executive order entails, how tightened safe harbor rules and new tax credit deadlines affect current and planned solar projects, and what practical steps industry players can take – from solar equipment sourcing to project financing – to navigate this shaken-up landscape.
Trump’s 2025 Executive Order: A New Clampdown on Solar Tax Incentives
The July 7, 2025 executive order is a direct response to Congress’s recent tax reform package, and it amplifies its effects. Just days after signing the “One Big, Beautiful Bill Act” into law (a reconciliation bill that significantly cut back renewable energy incentives), President Trump moved to “build upon and strengthen” those cuts via executive action . In particular, the order targets the safe harbor rules that solar and wind developers have long used to qualify for Investment Tax Credits (ITC) and Production Tax Credits (PTC). It directs the Treasury to tighten the definition of what it means to “begin construction” for a project to be eligible for tax credits, ensuring that only projects with substantial progress can lock in their credits . The language explicitly calls for restricting safe harbor provisions “unless a substantial portion” of a project is built and to prevent any “artificial acceleration or manipulation of eligibility” .
In plain terms, the government is clamping down on paper-thin project starts. Under previous guidance, a solar developer could start claiming a tax credit based on the year construction began – often achieved by doing a small amount of physical work or incurring at least 5% of project costs – and then have up to four years to complete the project under a safe harbor agreement . These longstanding rules let projects lock in lucrative tax credits at the outset as long as they eventually came online within the allotted window . Now, however, officials are concerned that some developers might abuse these provisions by nominally “starting” projects (for example, by purchasing equipment or performing minimal site work) to lock in tax credits without a clear timeline for completion. The July 2025 order is intended to close that perceived loophole.
Crucially, the executive order also instructs Treasury to fast-track the implementation of new FEOC restrictions defined in the 2025 tax law . Starting next year, solar projects will face strict limits on the involvement of “foreign entities of concern” – notably targeting Chinese supply chains – if they want to qualify for tax credits . The order urges “prompt action” on these rules, reinforcing the administration’s stance that reliance on foreign-controlled solar technology undermines U.S. energy security . In effect, the federal government is not only shortening the timeframe for projects to use tax credits, but also raising the bar for supply chain compliance, all as part of a policy pivot away from subsidizing renewable energy.
Safe Harbor Rules for Solar Projects – What’s Changing?
To appreciate the impact of this crackdown, it’s important to understand what safe harbor rules are and how they’re being altered. Under the prior regime (especially after the 2022 Inflation Reduction Act), solar and wind projects enjoyed generous timelines to qualify for tax credits. Developers could satisfy an IRS “commence construction” test – either by starting significant physical work on-site or by investing at least 5% of project costs – and by doing so, lock in the current tax credit rate for that project . The project then had a continuity safe harbor of four years to be completed and placed in service, while still retaining the credit value from the start year . This mechanism was crucial for long-lead-time projects: for example, a large solar farm that “began construction” in 2023 could still come online in 2026 or 2027 and receive the full 30% ITC from 2023, thanks to safe harbor. It also allowed developers to safe-harbor equipment (buying solar panels or other components in advance) to meet the 5% cost threshold and secure the credit, even if construction stalled temporarily.
The new tax law passed in July 2025 already shortened these grace periods. For wind and solar, the legislation now requires projects to begin construction within one year of enactment (by July 2026) in order to retain the old safe harbor benefits; any project that starts later will face a hard deadline – it must be placed in service by December 31, 2027 to qualify for any federal credit . In other words, Congress dramatically compressed the timeline: projects have roughly a one-year window (mid-2025 to mid-2026) to start and still enjoy a four-year completion window; if they miss that, they fall into a “finish by 2027 or get nothing” scenario . This change alone sent solar developers scrambling to re-evaluate which projects can be accelerated to meet the new deadlines.
Trump’s executive order turns the screw even tighter. By demanding a stricter interpretation of “beginning of construction,” it raises the threshold for what counts as a project start under safe harbor. It is no longer enough to have a contract, a small excavation, or a batch of modules sitting in a warehouse to claim your project began in time. The Treasury is being pushed to require that a “substantial portion” of the project be completed – a much higher standard that likely means significant on-site construction progress or major equipment installed . The order explicitly seeks to prevent developers from gaming the system through “artificial acceleration,” such as rushing minimal work or purchases just to beat the clock. This shift has introduced new uncertainty into the market. Industry experts caution that projects which previously might have qualified by using the 5% safe harbor spend could now be at risk. “If the Treasury Department interprets the rules narrowly, projects that only passed the 5% spend test but haven’t made real physical progress could lose their credits,” warns Bryen Alperin, a tax and project finance expert at Foss & Company . In practice, developers can no longer bank on merely writing a check for solar panels or doing symbolic site prep to secure their tax credit – they must plan on deeper early construction or risk disqualification. Some fear that even projects already in early stages might be retroactively impacted if new guidance comes out redefining what previous activities count as legitimate starts (though retroactive application remains uncertain, the very possibility makes financiers nervous).
Impact on Solar Tax Credits and the Project Pipeline
The safe harbor crackdown is part of a broader rollback of solar incentives that is sending shockwaves through project pipelines. The One Big, Beautiful Bill Act signed in July 2025 substantially dialed back or eliminated many clean energy tax credits ahead of schedule . For solar, the most consequential change is the fast sunset of the ITC/PTC: effectively, any new solar or wind project not underway by the July 2026 cutoff will lose access to the 30% ITC or equivalent PTC after 2027 . This is a whiplash-inducing reversal from the long-term policy signals of the Inflation Reduction Act, which had extended renewable credits into the 2030s. Suddenly, the industry is staring at a much nearer horizon for federal support – a mere two years from now.
For current projects, this means compressed construction schedules and tough choices. Large utility scale solar farms that were slated for late-decade completion might no longer pencil out if they can’t be operational by the end of 2027. Developers are now racing to identify which projects can be pulled forward to meet the deadline and which may be postponed or shelved. The Treasury’s stricter safe harbor guidance only intensifies this race, since claiming “commenced in 2025/2026” is no longer guaranteed without substantial work done. We can expect a surge of project activity in the next 12-18 months as companies try to qualify under the wire – followed potentially by a steep drop in new solar development beyond 2027, the so-called “solar cliff.” Indeed, the Solar Energy Manufacturers for America (SEMA) coalition has warned that “by rapidly sunsetting demand incentives, Congress is pulling the rug out from under manufacturers, disrupting the reshoring process that is well underway, and conceding the market to China in one year” once the domestic content bonus and tax credits lapse . In other words, a quick cutoff in 2027 could undercut the nascent U.S. solar manufacturing boom, leaving factories without domestic demand just as they ramp up. This is a paradoxical outcome: the very policy aimed at promoting American-made energy (through FEOC and domestic content rules) might result in a collapse of market support that benefits overseas competitors.
Industry leaders are sounding alarms about the broader economic impacts. Abigail Ross Hopper, President and CEO of the Solar Energy Industries Association (SEIA), noted that while the final bill avoided some worst-case provisions, it was “deeply disappointing” to see such a partisan-driven rollback of clean energy incentives that have been lowering costs for consumers and building domestic resilience . She highlighted the “total disregard for the thousands of small businesses in the residential solar sector that were given only months to reinvent themselves” under the new timelines . Indeed, residential solar installers face the immediate expiration of the 30% tax credit for homeowners at the end of 2025, meaning they have a little over a year to adapt sales strategies before that market changes.
On the utility-scale side, developers and power purchasers are grappling with what the post-2027 world looks like. Many ongoing projects that secured Power Purchase Agreements (PPAs) with utilities or corporations assumed a 30% tax credit would reduce costs – if those credits vanish, some contracts might become unfinanceable unless renegotiated. “Renewable energy projects in the pipeline are ready to meet growing electricity demand … but with the new federal deadlines, many shovel-ready projects could miss their window to qualify,” warned Evan Vaughan, executive director of the Mid-Atlantic Renewable Energy Coalition (MAREC Action) . He cautioned that without urgent action to speed up permitting and grid interconnection at the state/regional level, projects will be delayed past the cutoff, leading to “higher development costs, canceled projects, and ultimately, higher electric bills for consumers” . This encapsulates the supply-demand dilemma: electricity demand is rising, and solar is one of the quickest-to-deploy sources to meet it, yet policy constraints could bottleneck project deployment and make energy more expensive in the near term.
It’s not all doom and gloom in the long run. The fundamental economics of solar remain strong, and many analysts note that technology cost declines and corporate sustainability goals will continue driving solar adoption even if federal incentives wane. As Jason Grumet, CEO of the American Clean Power Association, put it, “surging demand for electric power and the economic benefits of renewable technologies ensure that clean power will continue to play a significant and growing role” in the U.S. energy mix . The post-2027 projects might rely more on state policies, renewable portfolio standards, or customer-driven procurement. However, the near-term adjustment will be significant.
For businesses in the solar value chain, the message is clear: prepare for a bumpy ride. The policy environment has changed more in a few weeks of mid-2025 than it did in the prior several years. Companies that swiftly adapt – by re-timing projects, lobbying for tweaks in implementation, and finding creative financing solutions – will be better positioned to weather the storm than those taking a “wait and see” approach.
Renewable Energy Project Financing in a Post-Safe Harbor World
One of the most immediate repercussions of these changes is on project financing and investment strategies. Tax credits like the ITC are not just bonuses; they are integral to project finance models. A 30% ITC, for instance, often contributes hundreds of millions of dollars in value for a large solar portfolio, typically via tax equity investments or direct monetization of credits. If projects risk losing that credit, the financing gap must be filled through higher electricity prices, additional equity, or debt – none of which are easy in a competitive market.
With the Treasury likely to enforce stricter safe harbor criteria, financiers will exercise greater caution. Banks and tax equity investors may start demanding proof of substantial construction progress (not just invoices for equipment) before committing capital that hinges on tax credit availability. Due diligence will intensify around questions like: Has the project truly begun construction under the new rules? Can it realistically meet the 2027 deadline? Projects that previously were considered safely on track for credits might now be viewed as carrying policy risk, which could raise the cost of capital or limit financing options.
Developers and sponsors are responding by revisiting their capital stacks. There is renewed interest in the transferability provision for tax credits, which fortunately was preserved by the 2025 legislation . Tax credit transferability allows an entity with renewable credits (like an ITC) to sell those credits to another taxpayer for cash, rather than partnering with a tax equity investor. This mechanism, first introduced in the Inflation Reduction Act, is seen as a lifeline in uncertain times. As Hasan Nazar, head of policy at a clean energy finance platform, points out, the preservation of transferability “reflects a growing bipartisan recognition that this mechanism is essential to financing America’s energy future. Transferability has proven to be a critical market-based mechanism for unlocking capital, speeding up deployment, and reducing reliance on more complex and costly financing structures.” . In a scenario where traditional tax equity (largely provided by big banks) might pull back due to shortened credit horizons or ambiguity in Treasury’s rules, direct credit sales could keep money flowing to projects. B2B clients and solar developers should ensure they understand how to leverage credit transferability – it can provide upfront cash from investors who can use the credits, thereby replacing some of the functions of tax equity financing.
Another strategy under discussion is greater use of “bridge financing” or short-term credit facilities to get projects through the construction squeeze. If a project can commence quickly and needs to be finished by 2027, developers may rely on construction loans or even corporate balance sheets to build rapidly, intending to refinance or sell the project once it’s operational (but before the credit sunsets). Such approaches shift risk to earlier stages of the project, which not all developers can shoulder, but we may see well-capitalized players doing this to ensure they capture the tail end of the ITC.
For investors looking at renewable energy, the shifting policy means adjusting their investment strategies. Some may diversify into sectors with more stable incentives: for instance, energy storage stands out. The new law did not curtail the standalone storage ITC (Section 48C/48E) in the same way as solar/wind. In fact, batteries remain eligible for 30% credits well beyond 2027 and are not subject to the same commence construction deadlines for solar projects . We can expect investor interest to grow for storage projects or solar-plus-storage deals where the storage portion can still earn credits (and potentially be separated into its own financing vehicle). Solar developers might pivot to emphasize storage additions – which also help with grid reliability – as a strategy to continue capturing federal support.
Additionally, long-term Power Purchase Agreements (PPAs) might see a price uptick. If a solar farm won’t have a tax credit to subsidize its economics after 2027, it will likely need a higher PPA rate to achieve the same return. Corporate and utility buyers of clean energy should be prepared for this potential increase in PPA pricing for projects delivering in 2028 and beyond, or consider alternative contract structures (like contracts for differences or partnerships with developers) that share some of the incentive risk.
Amid these challenges, it’s worth remembering that policy environments can change again. Savvy investors keep an eye on the political winds: the 2025 legislation is a product of a specific political alignment, and future Congresses or administrations could modify the timeline once more (for example, restoring credits or extending deadlines if market disruption is too severe). However, banking on a political reversal is speculative; most industry stakeholders are proceeding under the assumption that they must work with the rules on the books today. The best course is to make projects as robust as possible without relying solely on federal incentives – that means focusing on cost reduction, technological efficiencies, and securing revenue streams (like utility capacity payments or renewable energy certificates) that improve project economics independently.
Solar Equipment Sourcing and Supply Chain Considerations
Perhaps nowhere will the new policies be felt more acutely than in the solar supply chain. The executive order’s emphasis on Foreign Entity of Concern rules is a clear signal: the administration wants to curtail the use of Chinese-made solar equipment in projects that receive U.S. tax benefits . Under the One Big, Beautiful Bill Act, projects starting construction in 2026 or later will be subject to escalating requirements to use domestically produced or allied-nation components. For solar PV installations, at least 40% of the value of manufactured components must come from non-“prohibited foreign entities” (primarily China, Russia, North Korea, Iran) for projects beginning in 2026, and this threshold rises 5% each year – reaching 60% by 2030. (The thresholds for energy storage are even more stringent: 55% in 2026, rising to 75% by 2030 .) These FEOC rules were intended to boost U.S. manufacturing and secure the supply chain, but they pose huge compliance challenges for an industry currently reliant on Chinese-made solar panels, cells, and other materials.
The immediate takeaway for solar project developers and EPC contractors is that strategic solar equipment sourcing is no longer just about price and efficiency – it’s about eligibility. If you plan to build projects in 2026 and beyond, you will need to vet your suppliers carefully. Modules, inverters, racking, batteries – all must increasingly be sourced from U.S. factories or at least countries not on the “concern” list. This could mean forging new relationships with domestic module manufacturers, seeking out emerging suppliers in India, Southeast Asia, or other locales for cells and wafers, or even adjusting project designs (e.g., using differently sourced components that meet content rules).
However, meeting these content rules will be easier said than done. Right now, China dominates much of the solar supply chain (over 80% of global solar panel manufacturing capacity is in China). While the U.S. has seen a recent uptick in announced solar manufacturing capacity (with some estimates around ~50 GW of module capacity by 2026), it’s uncertain whether there will be enough compliant product to meet demand. Bryen Alperin warns that “as the FEOC thresholds and domestic content requirements are phasing in, there will be supply chain constraints” – a polite way of saying supply shortages are likely . He advises that having the right relationships to access compliant equipment will be crucial . Dean Chiaravalloti of Solar Insure echoes this, noting “demand will far outpace supply for these approved products. If you’re a contractor, start securing relationships now.” . In practice, this might involve pre-ordering U.S.-made panels well in advance, signing offtake agreements with new domestic factories, or even investing directly in supply chain ventures to guarantee a pipeline of approved components.
From a manufacturer’s perspective, the next year or two could see a golden opportunity followed by a potential bust if not handled carefully. In the short term, domestic manufacturers of solar modules, trackers, inverters, and related components might see a surge in orders as developers safe-harbor equipment before the deadlines. Indeed, many solar firms are likely to front-load their procurement – buying as much inventory as possible by the end of 2025 – to both meet the 5% safe harbor test for projects and to avoid the stricter FEOC content rules that kick in for later projects . This could lead to a strain on manufacturing capacity and logistics in 2025–2026 (with possible price increases for made-in-USA equipment due to demand). But after 2027, if the tax credit-driven demand truly falls off a cliff, those same manufacturers could be left with unused capacity. The SEMA Coalition has expressed that without steady demand signals, factories opened during the IRA boom might face closure, and the U.S. could “concede the market to China” once again . Solar equipment producers are therefore in a tricky spot: ramp up now to meet a spike in demand – but remain agile in case demand plummets later or pivot to export markets if the U.S. market contracts.
Another aspect of supply chain impact is project logistics and timelines. If developers are rushing to procure equipment to safe harbor projects by end of 2025, we might see port congestion, warehouse shortages, and increased costs for freight and storage. B2B buyers should factor in these potential bottlenecks. It’s one thing to buy 100 MW of solar panels to lock in a tax credit; it’s another to have a place to store them and ensure they’re deployed before they degrade or warranties tick down. Collaborating closely with suppliers, logistics providers, and maybe using bonded warehouses or strategic staging sites will become part of project planning.
Finally, it’s worth noting that despite the challenging outlook, the policy intent behind these rules – boosting domestic manufacturing and weeding out Chinese influence – could have long-term benefits if the industry adapts. In a best-case scenario, U.S. and allied manufacturers scale up to supply most of the solar parts needed, the industry avoids the 2027 cliff by either policy adjustment or sheer market momentum, and we emerge by 2030 with a more self-sufficient renewable energy supply chain. Companies that invest in compliant supply chains now could gain a competitive edge if that scenario plays out. But getting from here to there will require careful navigation of the next few years.
Industry Reactions: Resilience Amid Uncertainty
The solar industry is no stranger to policy fluctuations, and key voices across the sector have been responding with a mix of concern and resolve. As mentioned, SEIA and other trade organizations have publicly criticized the short lead time and economic downsides of the new policy. “This bill is short-sighted and fails to adequately support American energy innovation,” said Mike Carr, executive director of the SEMA Coalition, highlighting the risk to manufacturing growth . The sentiment is that cutting incentives too quickly undermines the very goals of energy independence and economic growth that supporters of the rollback claim to champion.
At the same time, there’s a strong undercurrent of determination. “Our industry will not back down,” declared the Coalition for Community Solar Access (CCSA) after the House vote, noting that while Congress has put up roadblocks, the clean energy sector has weathered policy swings before and will do so again . This resilience is echoed by Abigail Ross Hopper of SEIA, who reminded stakeholders that “regardless of what happens in Washington in the coming months and years, markets will continue to drive outcomes” and the solar and storage industry remains fundamentally resilient . In other words, demand for clean energy isn’t going away, and many businesses and consumers will pursue solar for its cost advantages and environmental benefits even without heavy federal subsidies. This intrinsic demand is a source of optimism – and indeed, Q2 2025 saw record solar installations in the U.S., indicating robust momentum coming into this policy shift .
Still, the industry isn’t leaving things to chance. Lobbying efforts are likely underway to influence how Treasury writes the fine print of the safe harbor guidance. Trade groups may push for a reasonable interpretation of “substantial portion” (for instance, setting a clear percentage completion threshold that’s attainable) rather than an overly strict one. They will also be closely watching any additional IRS notices or rulings for how projects that started under old rules will be treated. There is precedent for the IRS providing relief or extensions in response to extraordinary circumstances (like they did during COVID-19 for some ITC deadlines), and the case will be made that the drastic legislative changes warrant some flexibility in implementation.
Additionally, companies are sharing knowledge and strategies through industry forums, webinars, and conferences. The collective goal is to ensure that, as much as possible, projects and investments already in motion can be salvaged or adjusted to fit the new parameters. We may see collaborations where, for example, a smaller developer sells a project to a larger one that has the resources to finish it by 2027, thus ensuring the project gets built and the original developer recoups value. Consolidation in the solar development space could accelerate as a result of the policy pressure – larger firms with stronger balance sheets might scoop up mid-stage projects from others who feel they cannot take them to completion under the new deadlines. On the manufacturing side, expect announcements of new factory plans to be re-evaluated. Some announced solar manufacturing expansions in the U.S. (for solar panels, battery components, etc.) were predicated on steady growth fueled by the IRA’s decade-long incentives. Now, manufacturers might delay or scale back certain investments, or conversely, try to speed up opening dates to catch the near-term wave of demand from safe harbor orders. Government agencies like the Department of Energy may also refocus their grant and loan programs to help bridge the gap for domestic manufacturers, knowing that market demand alone might falter mid-decade.
The intersection of policy and market in 2025 has certainly put the solar industry at a crossroads. But as many in the sector have pointed out, clean energy has a broad base of support and momentum. States like California, New York, and others still have aggressive renewable targets and incentives independent of federal policy. Corporate buyers continue to set 100% renewable goals, driving private solar procurement. And globally, investment in renewable energy is breaking records, which benefits U.S. companies involved in overseas projects as well. These factors act as a buffer – they won’t fully negate the impact of the U.S. federal changes, but they provide alternative paths for growth.
In summary, the industry reaction can be characterized as “cautious but defiant optimism.” There’s acknowledgment that the next couple of years will be challenging and require hard work to adapt, but there’s also confidence that solar isn’t going anywhere. For B2B clients and manufacturers reading this, the takeaway is to engage with these industry conversations, perhaps through joining associations or attending key conferences, to stay connected and to amplify the collective voice pushing for sensible outcomes.
Strategic Considerations for Solar Manufacturers, Developers, and B2B Buyers
Facing this policy shift, solar businesses need to be proactive and strategic. Here are some key considerations and action items for various stakeholders in the B2B solar space:
1. Accelerate Project Development Timelines: If you’re a solar project developer or EPC, reassess your project pipeline with the new deadlines in mind. Projects that can commence construction now or by early 2026 should be prioritized. To leverage existing safe harbor rules, you’ll want to both incur qualifying costs and make tangible construction progress as soon as possible. Fast-tracking permitting, interconnection studies, and procurement can position your project to meet the “begun by July 2026” and “in service by 2027” requirements . In practice, this might mean reallocating resources to the most time-sensitive projects, even if it delays some less urgent ones.
2. Diversify Safe Harbor Tactics: Don’t rely on a single method to qualify your projects for tax credits. Previously, many developers leaned heavily on the 5% cost safe harbor (buying equipment upfront). Given the Treasury’s new mandate, combine that approach with physical construction milestones. For example, you might arrange for early stage site work (trenching, foundations, etc.) and procure critical equipment like transformers or panels in 2025 – this two-pronged effort could demonstrate a more “substantial” start. As one expert suggested, a “multi-prong approach” to safe harbor can hedge against stricter rules, ensuring projects aren’t left in the lurch if simply spending 5% is deemed insufficient . Document all construction activity meticulously (with photos, logs, invoices) in case you need to prove your progress to investors or auditors down the line.
3. Reevaluate Financial Models and Contracts: Solar manufacturers and developers should revisit their financial projections and contract assumptions. If you’re a manufacturer counting on orders through 2028 at IRA-driven levels, consider a scenario of reduced orders post-2027 and plan accordingly (e.g., diversify your customer base or product offerings). Developers should update project pro formas to reflect the possibility of no federal tax credit for projects that miss the deadline – this could mean needing higher PPA prices or accepting lower margins. It may also be wise to include contract clauses in EPC agreements or module supply agreements that account for changes in law (for instance, flexibility in delivery schedules or pricing if a project loses eligibility). On the flip side, if you are a B2B buyer (like a corporation signing a PPA for a solar farm), review the contract’s force majeure or change-in-law provisions. Ensure you understand who bears the risk if the project’s tax assumptions change; you might negotiate terms to share that risk or secure price certainty.
4. Leverage Tax Credit Transferability and Incentive Stacking: As noted, transferability is now a key tool in the toolbox . Developers should line up potential credit purchasers early – there may be financial institutions or corporate taxpayers willing to buy your credits for cash, providing liquidity if tax equity is scarce. Engaging a broker or advisor familiar with the nascent credit trading market could be helpful. Additionally, explore other incentives that can stack with or replace the federal ITC/ PTC: for example, some states offer their own credits, rebates, or clean energy payments. The federal Production Tax Credit (45Y) might be preferable for some projects now, since it pays out per kWh generated and could be claimed even if the ITC window closes (depending on start date). Also consider the 10% Domestic Content Bonus Credit – projects that meet U.S. manufacturing thresholds get an extra credit boost under the IRA (though the new law adjusted the thresholds ). If you can achieve those percentages of U.S.-made content, that bonus could offset some lost safe harbor value. Every dollar will count in closing the financing gap.
5. Secure Compliant Supply Chains: For manufacturers and procurement teams, supply chain due diligence is now mission-critical. Begin by mapping your current supply chain for each component of your product or project. Identify any exposure to “foreign entities of concern” – e.g., Chinese polysilicon, Chinese battery cells, etc. Then, proactively seek alternative sources or partners. This could mean qualifying new vendors in countries like India, South Korea, the U.S., or Europe. It might involve upfront investments or joint ventures to localize production of certain inputs. Given the likely supply crunch for compliant components, consider locking in long-term supply agreements sooner rather than later. As noted earlier, demand for approved products could vastly exceed supply . A B2B solar equipment buyer should negotiate not just on price, but on assurance of timely delivery and proof of origin (you may need documentation to prove compliance with FEOC rules). If you’re a module manufacturer in the U.S., highlight your compliance advantage in your marketing – developers will pay a premium for certainty that your panels won’t jeopardize their tax credits.
6. Consider Energy Storage and Other Technologies: Diversification can be a saving grace. Solar installers and developers might pivot to emphasize battery energy storage deployments, which currently have stronger policy support (and in some cases, can earn credits even as solar credits phase out) . Offering solar-plus-storage solutions could open new revenue streams (for instance, batteries can earn money through grid services or peak shaving for customers, independent of the ITC). Utility-scale developers could also look at other clean energy technologies that still have longer incentive lifespans – e.g., geothermal, wind, or emerging tech – though these may be outside their traditional focus, partnerships or acquisitions could bring those into the portfolio. The key is not to be over-leveraged in one segment that is heavily exposed to the policy change. Spreading out into related fields can help sustain business momentum.
7. Engage in Policy and Advocacy Efforts: Finally, don’t underestimate your ability to influence outcomes. The Treasury’s guidance on safe harbor is likely under development – industry input can still shape how it’s defined. Through trade associations or direct comments, provide feedback on what constitutes a fair “substantial completion” threshold. Similarly, monitor any technical guidance on FEOC content rules; if certain provisions are unworkable, raise those concerns through the proper channels. For example, if identifying the ultimate origin of every minor component is impractical, perhaps Treasury can be convinced to focus on major components only. The more real-world data and business implications you can share with policymakers, the better they’ll understand the need for workable rules. In the meantime, educating your customers and partners about these changes will help create a unified message – many lawmakers at state and federal levels may not fully grasp how these deadlines could lead to project cancellations or job losses in their districts. A collaborative, fact-driven advocacy approach can potentially lead to adjustments or mitigation measures (such as deadline extensions or grandfathering of certain projects) down the line.
Conclusion: Adapting to a New Solar Landscape
Trump’s July 2025 executive order tightening safe harbor rules – coupled with the broader rollback of solar tax credits – has undeniably created headwinds for the solar industry. Tax incentives that many businesses took for granted are now on a much shorter fuse, and the rules of the game are changing with little notice. However, the solar sector has proven time and again that it can adapt to shifting policy environments. The remainder of this decade will test that adaptability like never before.
For B2B clients involved in solar equipment production and project development, the priority should be staying informed and being prepared to act. This is not the time to adopt a “wait and see” posture; it’s a time to re-strategize, whether that means accelerating projects, locking in supply deals, or consulting with experts to optimize your financing approach. The companies that respond with agility – turning policy lemons into lemonade – will not only survive but could gain competitive advantage. Those who hesitate may find themselves squeezed out in the rush.
On the positive side, the fundamental drivers for solar remain robust: technology costs continue to fall, public and corporate demand for clean energy is rising, and innovative financing mechanisms are emerging to fill gaps. Policy support, while diminished at the federal level in the near term, still exists in various forms and could return in the future. In the meantime, by implementing the strategic measures discussed – from smart solar equipment sourcing and compliance management to creative project financing and timeline management – solar businesses can continue to prosper. As SEIA’s CEO put it, the industry is “resilient” and will keep fighting for “smart, stable, business-friendly policies” .
In this challenging environment, knowledge and proactiveness are the best tools. Keep close tabs on Treasury guidance releases, IRS notices, and market trends. Partner with reliable experts in tax law, supply chain, and finance who understand renewable energy. Many solar firms are already reaching out for specialized advice to ensure they “get it right” with these new rules . Don’t hesitate to do the same – whether it’s consulting with a tax advisor on safe harbor strategies or teaming up with a procurement specialist to source compliant components, the right expertise can save your project (and your bottom line).
Finally, consider this a call to action: if you are a manufacturer, developer, or large energy buyer, now is the time to audit your solar plans for vulnerability to these policy changes. What can you accelerate? What must you secure? What contingencies should be in place? By asking and answering these questions today – and leveraging the guidance of industry experts and organizations – you can chart a path forward. The landscape may have shifted, but the future of solar remains bright for those who adapt and innovate.
Next Steps for B2B Solar Leaders: Given the complexities introduced by the new safe harbor rules and tax credit deadlines, you may benefit from a tailored strategy session. Our team of solar policy and supply chain experts is available to help you assess your project portfolio, optimize your equipment sourcing, and refine your investment strategy in light of these changes. Reach out to us to schedule a consultation or to learn more about how we can support your solar initiatives during this transition. Together, we can navigate the uncertainty and keep driving the solar industry forward – delivering clean energy projects that make both economic and environmental sense, even in a changing policy climate.