Getting rid of clean energy tax credits would lower financing costs, eliminate federal regulatory risk and offer a less complex structure for funding wind, solar and storage projects, several renewables developers and independent power producers said.
The industry faces a slate of sunsetting incentives as a result of President Donald Trump's sweeping budget bill enacted in July 2025, which terminates clean electricity production and investment credits beginning in 2028 and will start phasing down the advanced manufacturing credit's critical minerals component in 2031. The bill also imposed foreign entity of concern (FEOC) restrictions on all three credits starting in 2026.
But while the landmark incentives kick-started billions of dollars of investment, they are no longer the most efficient way to build renewables even if Democrats regain control of the US House and Senate, according to industry executives speaking on panel discussions at the American Council on Renewable Energy's financial conference.
"If the Democrats come in and start reintroducing tax credits again, I don't think that's good for the industry actually," Cypress Creek Renewables LLC CEO Kevin Smith said May 13 during the event. "We can compete head-to-head against conventional energy, and so we should do that, whether it's nuclear or natural gas."
"The roll-off of the tax credits, while it will be painful over the next several years, I think ultimately, it's the right answer," he added. "It's a much simpler structure."
GridStor LLC CFO Frank Burkhartsmeyer agreed that tax credits are not "a particularly convenient way to finance industrial policy," while East Energy Renewables CEO Rich Deming acknowledged that even though the incentives were crucial for creating the industry in the 2000s, dependence on the federal government is now more of a "burden."
"This is crazy that we're even having to wrap our head around FEOC risk," he said during a May 14 panel.
The system's "transaction cost feeding frenzy" is also a negative for the industry, Deming noted.
Green Street Power Partners LLC President Nick Sangermano and Macquarie Asset Management Inc. associate director Eugeniu Vition both pointed out that Europe is building solar more cheaply than the US in part because it does not have tax equity financing.
"I know it feels weird for people that have been in the business for a long time [to operate without tax credits]," Sangermano said. "It feels like 'how is that possible?' I actually think we'd all be better off."
Without tax credits, developers would still have levers to pull, according to Vition.
"Can we be more efficient on the [engineering, procurement and construction] side?" Vition said. "Can we get better-priced equipment? Probably yes, and the market will adjust."
Power purchase agreement (PPA) prices will also increase to compensate developers for lost tax credit savings.
"Utilities need storage," GridStor's Burkhartsmeyer said.
"If they find a way to build flexibility into the offtake that says if this revenue isn't there, you can make it up through an adder on the tariff, I think that's an equitable way to do it," he continued. "After all, you're adding stability and resilience to the grid ... and it seems like the fair trade-off is between the developer and the offtaker, rather than asking the capital markets to solve that."
North American PPA prices are inching higher even while the tax credits remain in place. Solar PPA prices increased by 4.7% in the first quarter of 2026, up 13% year over year, according to an April 14 report by PPA marketplace LevelTen Energy Inc., while wind PPA prices rose 8% over the same period, or nearly 24% year over year. Both increases were fueled by ongoing interconnection bottlenecks, labor shortages, tariffs and permitting gridlock.
Invenergy LLC Executive Vice President and CFO Meghan Schultz, meanwhile, defended the Section 45Y clean energy production tax credit, 48E investment tax credit and 45X advanced manufacturing production tax credit.
"The tech-neutral credits incentivize many things beyond just wind and solar, right?" she said. "So I think they do play a really important role when you look at geothermal, or if you look at the 45X manufacturing tax credit and the desire to bring manufacturing onshore, there is a really important role for those tax credits to play."
Cypress Creek Renewables' Smith agreed that 45X is "a great example of a tax credit that should be carrying on."
"A lot of those manufacturers wouldn't be competitive without those tax credits, and it's important to bring those jobs and that manufacturing certainty to the US," Smith said.
