President Trump’s One Big Beautiful Bill (OBBBA), signed into law on July 4, 2025, intended to phase out tax credits for wind and solar by mid-2026. But its true impact extends well beyond incentives: OBBBA is unsettling the entire financial and insurance underpinning of the U.S. clean energy industry.
OBBBA has accelerated deadlines, with projects now required to begin construction by July 4, 2026, or be in service by December 31, 2027, to qualify for credits. It has also removed the 5% cost-based safe harbor starting September 1, 2025, meaning that only physical work counts toward eligibility. That change alone has lenders and insurers spooked, uncertain when or if returns will materialize.
Meanwhile, Trump’s tariffs on essential materials like steel, copper, and solar components have pushed construction costs even higher. “We’re really now seeing the impacts of what the new reality in the U.S. has meant for investor confidence,” says Meredith Annex, Head of Clean Power at BloombergNEF, after reporting that wind and solar investments plunged 36% year-on-year to $36.4 billion in H1 2025, with onshore wind collapsing 80 percent, the Financial Times reported.
At the same time, insurance is becoming a major issue. Underwriters are recalibrating risk models that now include political unpredictability. As Canaan Crouch of Jencap Specialty Insurance Services warns, “Higher insurance premiums add another cost burden to contractors and developers already grappling with reduced subsidies, higher tariffs and volatile demand.” That’s effectively redefining how projects are valued and bankrolled.
Insurers are tightening their terms in ways that directly reshape project economics. Premiums for utility-scale solar and offshore wind have climbed sharply over the past year, with underwriters increasingly carving out exclusions for mechanical failure and weather-related damage, according to Reuters. Industry brokers say some carriers have shortened policy durations from three years to one, forcing developers to renegotiate coverage annually at higher cost. In offshore wind, several European reinsurers have already reduced their U.S. exposure, leaving a smaller pool of carriers willing to underwrite billion-dollar projects and driving up rates for those that remain.
The disruption is being felt by the industry’s biggest players. Denmark’s Ørsted, once a clean-energy trailblazer, has approved a $9.4 billion emergency rights issue after its U.S. offshore wind projects, Sunrise Wind and Revolution Wind, hit policy roadblocks. Construction on Revolution Wind, almost 80% complete, was halted by a federal stop-work order citing national security concerns, prompting Ørsted to sue the Trump administration. Meanwhile, the company is burning millions weekly in holding costs, and S&P Global has already downgraded its credit rating though Equinor, a 10% shareholder, has pledged up to $941 million in support.
Nor is this limited to utility-scale clean energy.
In residential solar, firms like Sunnova and Mosaic have filed for Chapter 11 bankruptcy amid uncertainty over tax credits and a decline in demand. Canary Media reported that Sunnova laid off over half its workforce (over 700 employees) before filing, citing untenable debt and market retrenchment. Mosaic, a major residential solar loan provider, also went bankrupt, pointing to macroeconomic headwinds and policy unpredictability.
These are not small casualties. Analysts predict a 50-60% reduction in residential solar demand, risking over 250,000 jobs. As Ara Agopian, CEO of Solar Insure, put it, “There’s going to be a 50 to 60 percent downturn in demand. Many of them will shut their doors as they can’t stay in business without the tax credit.” The Financial Times noted that Guggenheim’s Joe Osha underscored the long-standing difficulties.
In Sunnova’s case, a July 31, 2025 court approval allowed the sale of substantially all assets to a creditor group highlighting how even bankruptcy is being managed to mitigate fallout for homeowners.
States are also feeling the heat, with Texas, once a renewable stronghold, seeing developers cancel or delay nearly $8 billion in projects, while BloombergNEF has tallied over $22 billion in clean energy development shelved nationally, costing more than 16,000 jobs.
Beyond wind and solar, OBBBA’s implications also extend to battery and hydrogen sectors. The law phases out credits for battery manufacturing and accelerates deadlines for hydrogen projects under Section 45V. Experts at the International Council on Clean Transportation estimate U.S. battery production could fall 75 percent short of expectations by 2030, cutting into the clean energy value chain.
Banks that once offered competitive terms on project loans are now widening spreads to reflect heightened policy risk, while credit rating agencies have flagged uncertainty over future cash flows as a trigger for downgrades. Institutional investors that fueled the tax-equity boom of the past decade are becoming more selective, in some cases pausing commitments entirely until the regulatory landscape stabilizes. The result is a much smaller pipeline of available capital and steeper financing costs for developers.
What’s emerging is a clarity that OBBBA’s biggest impact may be the erosion of the industry’s financial ecosystem. Insurance premiums are climbing. Lenders are retreating or demanding new risk-adjusted returns. Developers are cannibalizing capital just to stay afloat.
By Alex Kimani for Oilprice.com