OBBBA Scrambles U.S. Energy Outlook

Forbes

14-07-2025

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T he enactment of President Trump's One Big Beautiful Bill Act (OBBBA), with its early phaseout of federal support for large-scale wind and solar projects, creates a major challenge for how to meet growing U.S. energy demand. Combined with battery storage, renewables have become the fastest, most efficient new sources of electricity, so the prospect that fewer such systems will be added to the grid by the end of the decade raises the prospect of higher energy prices. There's also a risk this could slow the fast-growing AI industry, where the U.S. has taken an early global lead.
"With such dramatic uncertainty facing new power supply investments, thermal retirements are likely to be deferred, power prices will rise and large loads will be delayed," David Brown, director of energy transition research for Wood Mackenzie, said in a recent report. "Without permitting reform, new large load tariffs and domestic technology innovation, the U.S. will risk the edge it has in the global AI race.
Under OBBBA, new wind and solar projects have to be in operation by Dec. 31, 2027, to get the full federal tax credit, though projects under construction within a year of its enactment will still have some eligibility. As a result, there's likely to be a surge in new installations this year and next to meet the deadline, though that could also bring permitting bottlenecks. The number of new projects is likely to slow considerably in the final years of the 2020s, however.
As a result, solar installations may be 17% lower over the next 10 years than anticipated, while wind projects will likely drop by 20%, Wood Mackenzie said. At the same time, electric power demand is forecast to grow steadily, rising 25% by 2030 compared with 2023, according to an estimate by ICF.
'The early sunset of manufacturing tax credits will lower future energy demand from clean energy manufacturing, while delays to new supply could slow data center rollouts nationwide as facilities compete for scarce grid capacity,' Brown said.
ILLUSTRATION BY FERNANDO CAPETO FOR FORBES; GETTY
Elon Musk's tightly controlled Tesla robotaxi pilot program in Austin has managed to go without a major accident so far. But on June 24, a Model Y in its test fleet dinged a parked Toyota Camry outside a popular pizza parlor. It was a minor thing, but what if the car had hit a person instead?
Bullish Tesla investors are counting on Musk's robotaxi dream to create a vast new revenue stream from autonomous rides. That may happen, but it also creates a risk the company hasn't faced before: legal liability from self-driving tech failures. Tesla owners hoping to make money Airbnb-ing their cars in a company-run robotaxi ride service Musk has touted for years could be on the hook as well.
'There will be some cars that Tesla owns itself … but then for the fleet that is owned by our customers it will be like an Airbnb thing. You can add or subtract your car to the fleet whenever you want,' Musk said at Tesla's shareholder meeting last June. 'Just one tap on the Tesla app and you can add your car to the fleet and it makes money for you while you're gone.'
But Tesla owners hoping to cash in have more to consider.
'Can I imagine a lawsuit against the owner of the car? Absolutely,' said Mike Nelson, an attorney who says he's been involved in over a thousand Tesla-related accident cases and whose startup, QuantivRisk, analyzes sensor and computer data from crashes. In addition to suing Tesla in future robotaxi accident cases, he sees lawyers coming after Tesla owners: 'Plaintiff's attorneys are going to say something like, 'the car was not properly maintained' or 'you misrepresented the condition of the car.''
Assuming Tesla's robotaxi tech is truly ready for commercial use, which many autonomous vehicle experts doubt, the pitch by the world's wealthiest person to owners to monetize their vehicles may excite some. It could also prove to be the latest in an impressive cascade of ill-starred Musk pipe dreams: hyperloops, solar roofs, $2 trillion in government DOGE cuts. And while Musk has been vocal about how game-changing Tesla's robotaxi plans are for the company's future, particularly as its EV sales stall, he's said little about how it will actually run.
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Electric Hydrogen Beth Deane, chief legal officer for Electric Hydrogen, on the survival of federal hydrogen tax credits in Trump's budget bill
The outlook for the 45V federal credit seemed grim in the new budget but it was maintained in the final version. Was that unexpected?
It was really kind of a surprising vote of confidence and investment in the industry, although the ultimate runway was shortened from what's in the Inflation Reduction Act. I think the journey that the hydrogen industry took through the reconciliation process really created an opportunity for an education process within Congress and within the administration about what the opportunity is for the hydrogen industry. I think the shift to extend the runway in the final version reflected that there is an opportunity for the U.S. to take a portion of what's going to be a global market.
The tax credit is just ultimately an investment to see if the U.S. can compete. The extension suggests they believe the U.S. can compete, and certainly there are a lot of projects that are ready to go forward that have been waiting for the regulatory certainty that we now have. It wasn't always clear that that was going to be the case.
Earlier in the year Electric Hydrogen was seeing fewer opportunities for its electrolyzer tech in the U.S. and was looking abroad to Europe and other markets. Are you seeing that change now?
We are, but I don't think it changes our ultimate strategy. We're still very focused on expanding into Europe. We have hired actually a number of folks there and are building out that capacity to really get close to customers in Europe. Europe is also heading toward regulatory certainty, so it's an interesting kind of pivot point.
The 45V credit isn't specifically for green hydrogen. What is the outlook for that variety?
There are projects. We have customers who are going to be announcing and moving forward in the process. Infinium is obviously a project that's getting built and is going to be where we are able to prove out our technology at the scale we want to sell it at. We're a young company, but it's very interesting to us that Infinium really saw the offtake opportunity and that offtake opportunity is only going to grow. It is hard to be first, but they are the first to really scale here. We see other customers who are ready to do the same thing.
One of the things that has been hard for the hydrogen industry is that we couldn't get going and show success. There was no regulatory certainty. You can't finance projects until you know what the full stack of costs and revenues is going to be.
So it is a little bit of an opportunity to prove what the industry can do over the next few years. What Else We're Reading
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States, environmental groups fight Trump plan to keep dirty power plants going ( Canary Media )
Underwater turbine spinning for six years off Scotland's coast is a breakthrough for tidal energy ( Associated Press )
MethaneSAT's sudden silence worries environmentalists around the world ( Forbes )
In U.S. flash flood hotspots, many federal meteorologist positions remain unfilled ( The New York Times )
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