A recently enacted federal bill, dubbed the “megabill” or “One Big Beautiful Bill Act,” is poised to significantly impede the clean energy transition across several U.S. states, threatening billions in private investment and thousands of jobs by drastically altering tax credits for renewable projects. The legislation, which increases requirements for developers to claim tax breaks for wind, solar, and other renewable energy projects, phases out these incentives entirely by 2028, with new projects needing to commence construction by year-end to qualify for remaining benefits.

In Washington State, the implications are particularly severe. Analysis by think tank Energy Innovation indicates that while federal tax credits passed in 2022 generated $978 million in new private investment across seven energy manufacturing facilities, an additional $8.75 billion in outstanding investments across 27 facilities is now at risk due to the phase-out. Governor Bob Ferguson, a member of the U.S. Climate Alliance, condemned the rollbacks as a “disastrous step in the wrong direction,” warning of increased electricity costs for Washington households, estimated at $115 per year by 2029. Furthermore, the U.S. Climate Alliance projects 21,800 job losses in Washington’s clean energy and manufacturing sectors by 2030. James Hove, Washington state director of Climate Solutions, emphasized the challenge this poses to the state’s 2019 Clean Energy Transformation Act, which mandates a full transition to clean energy by 2045, stating, “We have these great programs that are working, and now’s a great time to double down on those absent federal leadership.” Matthew Hepner, Executive Director of Certified Electrical Workers of Washington, noted the timing is critical, as projects were just beginning to hire, and now face drying up.

Wyoming, a state with significant wind and solar potential, also faces substantial economic obstacles. The American Clean Power Association CEO Jason Grumet stated the action is a “dramatic swing in federal policy, disrupting the good faith investments of American companies.” Observers predict a 29% increase in electricity costs for Wyoming customers over the next decade, jeopardizing hundreds of planned wind and solar projects. Senator Chris Rothfuss, D-Laramie, highlighted the clear intent to “shut down the renewable sector” within the bill, despite renewables being an increasingly vital part of Wyoming’s economy. While major projects like Power Company of Wyoming’s 3,500 MW Chokecherry and Sierra Madre Wind Energy Project, and Invenergy’s 590 MW Rock Creek wind project, which began construction earlier, are expected to proceed, the fate of numerous other projects in early planning stages remains uncertain. Jonathan Williams of the Wyoming Outdoor Council noted that local governments, increasingly seeking to cut energy costs through renewables, will lose crucial support.

Critically, the federal legislation maintains and expands subsidies for fossil fuel industries, a stark contrast to the clean energy rollbacks. Governor Ferguson labeled the bill a “fossil fuel wish list that penalizes clean energy and favors pollution.” Despite the bleak forecast, organizations like Climate Jobs Washington are urging state and local leaders to persist in pursuing clean energy projects, asserting that “Clean energy is our greatest opportunity to build an affordable economy in Washington State.” While the new law presents significant headwinds, state leaders remain cautiously optimistic about their ability to continue the clean energy transition through resilient local efforts.