On July 7, days after the budget bill was signed into law, President Trump issued an executive order instructing the U.S. Dept. of the Treasury to issue new guidance around foreign entity of concern (FEOC) and ITC safe harbor rules 45 days after budget bill enactment. The budget bill originally instructed Treasury to establish guidance by December 31, 2026. FEOC requirements come into play for solar projects seeking the ITC starting January 1, 2026.
Although the budget bill was a blow to the entire solar industry, safe harbor provisions allowing projects to still collect the ITC or PTC if they “start construction” by a certain date — meaning they spend at least 5% of the overall project cost, or satisfy the physical work test by installing racking or other significant project aspects — still gave the utility-scale solar market some runway. It’s now unclear if that runway will remain.
Trump’s July 7 executive order, titled “Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Sources” has a stated mission of “eliminating subsidies for unreliable ‘green’ energy sources like wind and solar in furtherance of the One Big Beautiful Bill Act.” The OBBA did not outright eliminate these tax credits, but rather expedited the phase-out.
In addition to attempting to speed Treasury guidance on FEOC, the order also directs the Dept. of the Interior to review its department regulations, guidance, policies and practices to “determine whether any provide preferential treatment to wind and solar facilities in comparison to dispatchable energy sources” within 45 days of budget bill enactment.
