The Impact of the Big Beautiful Bill on Renewable Energy
- Yoann Hispa
- Jul 3
- 7 min read
Updated: Jul 8
Updated: 7/7/2025, 12pm ET
President Donald Trump has signed the “One Big Beautiful Bill” into law, and the renewable energy industry finds itself facing a turning point. At the heart of this legislation is a provision that accelerates the sunsetting of two incentives for clean energy development in the United States: the Investment Tax Credit (ITC) and the Production Tax Credit (PTC). These federal incentives have long underwritten the growth of solar power across the country—helping to bring utility-scale solar from a new technology to mainstream energy resource, essential to power the data center boom in the U.S.
The One Big Beautiful Bill provides for ~$9.1 trillion in spending, with a savings of ~$4.1 trillion - see summary. $570 billion of those savings under the Bill comes from an accelerated sunsetting of the clean energy tax credits.
This legislation fundamentally alters how, where, and whether new solar projects are developed, reshaping many of the regulations revised and established by the Inflation Reduction Act. But this is not a death sentence for solar. Instead, it’s a reshuffling of the landscapes for (a) renewable energy, (b) U.S. electrical infrastructure, and (c) Commercial Real Estate landscapes. States with (1) robust solar resource potential (site quality & availability, and supporting regulations) as well as (2) strong local incentives will rise to the top. States that relied on the ITC or PTC to close financial gaps will find themselves out of favor.
Using real-world economic data — including state-by-state LCOE (Levelized Cost of Energy) and forecasted revenue potential with and without federal incentives — we can visualize the economic winners and losers in a post-ITC world.
Federal Incentives: What’s on the Line?
Before diving into the analysis, let’s revisit what’s being lost:
ITC (Investment Tax Credit): Provides a direct tax credit equal to a percentage of capital costs (30% under current law). The ITC Bonus can add an additional 10% for each bonus criteria it meets. The three bonus categories are for location in either an energy community, low-moderate income community, or using equipment that meets domestic content guidelines.
PTC (Production Tax Credit): Offers tax credits per kilowatt-hour of electricity generated, incentivizing long-term energy production.
Together, these incentives have historically improved project economics by $8–$25/MWh, depending on system design, resource quality, and financing assumptions. Their removal represents the largest shift in solar economics since their implementation.
Comparing Solar Economics Without Federal Incentives
Let’s break down the economics of solar across different U.S. states, focusing on three key metrics:
LCOE ($/MWh): The cost to generate one megawatt-hour of electricity over a project's lifetime
Revenue w/ No Fed Incentives ($/MWh): Estimated revenue from electricity markets and local programs without any federal support
Revenue w/ Max Fed Incentives ($/MWh): Revenue including benefits from federal incentives
Comparison of the top 5 states with state incentives
State | LCOE ($/MWh) | Revenue w/o Fed ($/MWh) | Revenue w/ Fed ($/MWh) | Margin w/o Fed | Margin w/ Fed |
Massachusetts (MA) | $68.09 | $361.45 | $386.95 | $293.36 | $318.86 |
New Jersey (NJ) | $66.78 | $245.02 | $270.03 | $178.23 | $203.24 |
Maryland (MD) | $31.13 | $177.06 | $188.72 | $145.92 | $157.58 |
Virginia (VA) | $29.61 | $95.91 | $106.99 | $66.29 | $77.38 |
Connecticut (CT) | $31.15 | $86.13 | $97.79 | $54.98 | $66.64 |
Takeaway: Even without the ITC or PTC, projects in several Northeastern and Mid-Atlantic states maintain healthy economic margins. This is thanks to high energy prices, REC markets, and supportive state policies like net metering and clean energy standards.
The Shift from Deregulation to Incentivization
Over the past decade, states with minimal permitting barriers and fast-track interconnection processes became prime destinations for utility-scale solar development. Texas, in particular, saw a massive build-out of solar capacity thanks to its deregulated ERCOT market, abundant land, high solar irradiance, and a hands-off permitting environment. Similarly, Nevada, Arizona, and parts of Florida saw growth due to relatively streamlined development timelines and fewer regulatory hurdles. Texas was particularly appealing because (a) its connect then manage process which enables a very fast project development, and (b) because of its unique non-capacity market, providing higher spikes of revenues for energy developers but causing high price raises to its customers.
However, the landscape is shifting.
As federal tax credits disappear, low-regulation alone is no longer enough to support attractive project economics. Developers will now gravitate toward states that offer robust state-level incentives, even if those states come with more complex regulatory environments and also more difficult siting opportunities. That means more solar projects will likely be sited in states like:
Massachusetts – with one of the nation’s most lucrative Solar Massachusetts Renewable Target (SMART) programs
New Jersey – supported by the Successor Solar Incentive (SuSI) program and strong RPS standards
Maryland – offering long-term REC contracts and favorable SREC trading conditions
New York – with its NY-Sun program and competitive Tier 1 REC procurement
Illinois – benefiting from the Climate and Equitable Jobs Act (CEJA) and adjustable block program
These states have on average 20% less solar irradiance. For example, the state with the most irradiance, Arizona sees a yearly average of 5.75 kWh/m2/day, compared to 4.25 kWh/m2/day they have slightly higher costs of development, but they do provide policy certainty, structured incentive markets, and high electricity prices, which together create a stable return profile even without the ITC or PTC.
The net result? A more selective solar market where policy strength—not just sunlight—is the deciding factor for new development.
What About High-Sun States?
You might assume that desert-rich states like Arizona and Nevada would remain top contenders. And they do—but only under specific conditions. For example:
These states benefit from high capacity factors (i.e., more sun = more output), which lowers LCOE. However, without REC markets or generous state-specific incentives, their margins—while still positive—are not as strong as those in the Northeast.
The absence of federal tax credits will highlight the limitations of relying purely on solar irradiance for project viability.
Winners: States with Strong Local Incentives
Here are the key characteristics of states that remain attractive for solar development after the removal of federal incentives:
High retail electricity prices or robust wholesale power markets
State Renewable Portfolio Standards (RPS) with solar carve-outs, also known as Clean Energy Standards (CES)
Tradable SREC (Solar Renewable Energy Credit) markets
State or utility-level procurement programs for clean energy
Simplified interconnection and permitting processes
These factors combine to form strong revenue streams even without federal support. Massachusetts, New Jersey, and Maryland lead this category.
Losers: States Dependent on Federal Support
In contrast, states that:
Lack state-level clean energy targets
Have minimal or no REC markets
Rely on wholesale energy prices alone
Have high land or labor costs but low solar resource
…will become much less attractive without the ITC or PTC. Some Midwestern and Southeastern states fall into this category and may see solar development slow dramatically unless new local incentives emerge.
Future Solar Pipeline: State-by-state Capacity by Status
With key states now identified, it is important to understand where solar developers are actively placing capital. While the margin analysis helps highlight states facing difficult economics, the solar development pipeline explores where capital and permits are already in motion. This can be studied by examining the future solar capacity in each state, with particular focus on each development status. The graphics below capture every utility scale solar project that is in the development pipeline. LandGate’s extensive solar database enables exclusive insights into projects that are under site control, in the interconnection queue, or planned. Site control and queued projects, in particular, are individually identified and upended with lease documents, providing an accurate outlook of future solar development pipelines nationwide.
Regardless of changes to federal incentives, the development pipeline reveals that momentum is far from stalling, with hundreds of gigawatts of utility-scale solar in planning nationwide.
Market Reactions: What Happens Next?
Capital will flow to fewer states. Investors will prioritize low-risk, high-margin markets with clear state support.
Developers will consolidate pipelines. Projects in marginal states may be abandoned in favor of more lucrative opportunities elsewhere.
State policy will matter more than ever. Expect a renewed focus on passing state-level incentives to replace lost federal support.
Utility-scale solar will compete harder. Projects will need strong power purchase agreements (PPAs) or participate in ISO/RTO markets that reward clean energy.
Battery storage development is poised to accelerate. Unlike solar, standalone energy storage projects are excluded from the provisions of the One Big Beautiful Bill and will continue to qualify for the federal Investment Tax Credit (ITC). This sustained incentive support positions battery storage as an increasingly attractive asset class for developers and investors looking to hedge risk and secure stable returns amid evolving energy policy dynamics.
To support this growing market, LandGate provides industry-leading data solutions tailored to battery storage development, including nationwide geo-located interconnection capacity, granular energy pricing data, and visibility into the full lifecycle of battery storage assets—spanning site control, interconnection queue status, planned developments, and operational projects.
A More Competitive, Selective Energy Future Under the Big Beautiful Bill
The “One Big Beautiful Bill” won’t kill the solar industry—but it will mature it. Without the blanket support of federal incentives, only the strongest markets will thrive. Developers will be forced to prioritize efficiency, accuracy in forecasting, and smart siting decisions.
Solar isn’t going away. It’s just entering a more competitive phase—where the economics speak louder than the subsidies. Under this phase, we will see a shift of values in the commercial real estate market with developers gravitating toward those states that choose to offer more robust state-level incentives for solar development.
LandGate gathers, analyzes, and provides utility-scale solar developers, data center developers, energy storage developers, and investors with the data necessary to shift their efforts into more profitable areas in the U.S. To learn more about the solar site selection data & planning tools available, book a demo with our dedicated energy team.
Appendix - Breakdown of the Senate version of the One Big Beautiful Bill:
Savings Provisions $4.1T
Medicaid $0.93T
Clean Energy Tax Credits Sunset $0.57T
New immigration Fees $0.05T
Tax Provisions $3.1T
Permanently repeal personal exemptions $1.9T
Permanently limit itemized deductions $1.2T
Spending Provisions $9.1T
Tax cuts $8.7T
Permanent Extension of Individual TCJA Tax Cuts $7.7T
Extend Lower Individual Income Tax Rates & Brackets $2.2T
Extend Higher Standard Deduction $1.4T
Extend Section 199A Pass-Through Business Deduction $0.74T
Extend Higher Child Tax Credit $0.82T
Extend Higher Estate & Gift Tax Exemption $0.21T
Permanently Patch the Alternative Minimum Tax $1.36T
Modify State and Local Tax (SALT) Deduction Cap $0.95T
Permanent Extension of Business TCJA Tax Cuts $0.57T
Extend Bonus Depreciation $0.36T
Extend Immediate R&D expensing $0.14T
Extend looser business interest deduction limit $0.06T
New Temporary Tax Breaks $0.44T
No tax on tips
No tax on overtime
New deductions for seniors
Deduction for auto loan interest
Defense $0.18T
Homeland security $0.13T
Agriculture $0.12T
