Judge Reverses Trump Rule That Hindered Wind and Solar Projects

A federal judge has overturned a rule put in place by the Trump administration that made it harder for wind and solar projects to receive federal tax breaks. The decision, issued by Judge Colleen Kollar‑Kotelly in Washington, DC, says the Treasury Department’s Internal Revenue Service (IRS) did not give a sufficient reason for removing a key definition that determines when a clean‑energy project is considered “under construction. ” Under U. S. law, renewable energy projects must start building by July 4 of this year or be in service by the end of 2027 to qualify for a 30 % tax credit, which can be increased with additional bonuses. For the past decade, developers could “safeguard” a project for up to four years by showing either continuous physical work or having spent at least 5 % of the total project cost before the credit period ended. The IRS rule announced in August last year eliminated this 5 % requirement for all but the smallest projects.The judge’s ruling sends the IRS notice back for further review, effectively restoring the previous rules that had been in place before the change. The lawsuit was filed by several environmental groups, consumer advocates, the city of San Francisco and a clean‑energy consulting firm. They argued that eliminating the 5 % safeguard would raise electricity prices and stall new renewable projects across the country. City officials, including San Francisco’s attorney general, praised the decision as a check on policies that could increase energy costs for everyday Americans. They pledged to keep fighting for fair market conditions that allow clean‑energy developers to build projects that benefit communities. The IRS has declined to comment on the ongoing litigation.