The US renewables sector is laser-focused on the tightening window to begin construction going into 2026 as developers race against sunsetting solar and wind tax credits and significant risks to the anticipated build-out mount.
Buyers and financiers are only interested in projects due to come online in the next two years after July 2025 budget legislation accelerated the phaseout of landmark incentives, forcing smaller firms to shed undercapitalized projects, according to developers, investors and industry experts.
Developers of all sizes have seen federal permitting for projects on both public and private lands grind to a halt between a January executive order freezing all onshore wind projects and a July US Interior Department memorandum implemented as a moratorium on all solar projects requiring the department's approval.
"We haven't seen a wave of cancellations because no one wants to cancel before they have to, but I think there's plenty of evidence that in the coming months we will see waves of cancellations," Peter Gardett, CEO of market data platform Noreva, said in an interview.
Permitting crisis
The 10 largest owners of planned US utility-scale solar and wind projects intend to add approximately 104.8 GW through 2029, comprising 67.8 GW of solar and 37.0 GW of wind energy, according to S&P Global Market Intelligence data.
Developers now have to begin construction by July 4, 2026, to receive 100% of the tax credits' value and a safe harbor allowing them to keep full credit eligibility, provided the projects enter service within four years. All other wind and solar resources would have to enter service by the end of 2027 to qualify for the credits.
A report by renewable energy trade association American Clean Power found that even though US developers deployed 11.7 GW of clean energy during the third quarter of 2025, those results "mask an unstable policy environment" where offtake announcements during the first three quarters of 2025 were down 38% compared to the first three quarters of 2024. Power purchasing also dropped 16% across all offtake mechanisms quarter-over-quarter.
"The policy chaos at the federal level has seeped into every part of project timelines, stalling growth," American Clean Power CEO Jason Grumet said in a Dec. 4 statement.
Solar and energy storage developer Arevon Energy Inc., for example, does not have any projects on public lands, but transmission lines crossing streams or bordering forested areas still require "some touchpoint" with federal agencies such as the US Fish and Wildlife Service or the Army Corps of Engineers, CEO Kevin Smith said in an interview.
"All of those activities were kind of 'check the box,' where if you met certain guidance and certain clearances, you could online apply for a letter from the federal government," Smith said. "Those websites have been shut down, and now everything theoretically goes to the secretary of Interior's desk."
"We're seeing projects that could have gone into construction in 2025 and now are getting delayed, and now there's uncertainty about when those permits will come through," Smith added. "The second half of 2026, I think, is when that will show up in rising electricity prices."
A bipartisan bill to reform the National Environmental Policy Act review process, called the Standardizing Permitting and Expediting Economic Development (SPEED) Act, cleared the US House of Representatives on Dec. 18 in a 221-196 vote, with support from 11 Democrats and one Republican vote in opposition.
However, Democratic leaders in the US Senate have said that the Trump administration's Dec. 22 moves to halt five offshore wind projects along the East Coast have effectively ended permitting reform negotiations heading into the new year.
The Federal Highway Act reauthorization due for Sept. 30, 2026, presents an opportunity for Congress to make lasting changes to the permitting process via the Federal Power Act, according to Noreva's Gardett.
"From what I've been hearing over the past few weeks, people are saying this is the chance to actually make a legislative change," Gardett said.
In the meantime, developers and investors are avoiding Interior Department scrutiny where they can.
Arevon's Smith noted that some developers can reroute transmission lines or build smaller projects as "workarounds."
Others are eliminating transmission altogether.
"We had a big infrastructure investor here who's possibly our biggest client, and they said they are going full pedal to the metal on a distributed solar expansion and behind-the-meter gas because those are the two things they can get built," Gardett said, though he acknowledged that building off-grid and moving money into existing assets "can only go so far."
Redistributing projects
Smaller developers are also unloading wind and solar projects they can no longer afford to build.
"We're being asked to find new investors, find new owners of development projects where the current owner doesn't have the resources or bandwidth to take the deal forward," Marathon Capital LLC founder and CEO Ted Brandt said in an interview.
Renewables giant NextEra Energy Inc., for one, anticipates being active in that market, "which could create real buying opportunities for us," President and CEO John Ketchum said.
"There are a lot of folks in the renewable space that haven't safe harbored credits, haven't safe harbored for [foreign entity of concern] compliance, haven't taken the steps we have around supply chain, are short on transformers, don't have electric switchgear, don't have a way to get projects online," Ketchum said during a Dec. 8 investor conference.
According to Market Intelligence data, NextEra has about 13.6 GW of solar projects and 4.7 GW of wind projects in various stages of development through 2029.
Arevon can also afford to "purchase a platform of projects and wait that out and see if the [permitting] rules loosen up in 2026, 2027, 2028," Smith said.
Both Smith and Marathon Capital's Brandt insisted there is plenty of capital to go around when it comes to redistributing projects, even as international investors begin to retreat.
But if smaller developers are exiting projects due to permitting constraints, that "likely means less projects get built in the near term," Smith said.
Ankit Vanjara, managing director at Macquarie Group Ltd. unit Macquarie Capital, also anticipates that not all proposed projects will make it to construction.
"Expect the market to shift from resilience — rebalancing supply chains and ensuring energy security — to a resurgence in which quality renewables projects will squeeze out uneconomic projects," Vanjara wrote in an email.
