One Big Beautiful Bill Signed into Law

The Republican budget reconciliation bill that recently passed both the House and Senate will end all incentive programs and tax credits for the wind and solar industry by the end of 2027.

Commercial and utility scale solar projects already permitted must be completed and placed in service by December 31, 2027 in order to qualify for the 30 percent tax incentive.

Alternatively, if a project has not yet been permitted and it begins construction within one year of the enactment of this bill, then they will have four years to complete that project to qualify for the tax credits. 

The bill also eliminates all residential solar tax incentives that are completed after December 31 of this year.

House Rejects Foreign Entity of Concern (FOEC) Restrictions

The Foreign Entity of Concern (FEOC) tax that was in the Senate bill originally, imposed a tax on energy that was generated by any component or any part of a project containing Chinese or other foreign originated products. The FEOC Senate version was eliminated by the final bill passed in the house and was signed by the president.

Despite headwinds imposed by recent changes in these incentive programs, the Federal Energy Regulatory Commission, or FERC, projects that renewables will soon overtake natural gas as the leading source of electrical generation within the US.

During the next three years, FERC projects that there will be no new nuclear capacity added to the grid. 

They project utilities will close about 25,000 megawatts of coal power plants or about 14 percent of the existing coal power plants by the end of 2029.

FERC also projects that new generation from wind and solar will grow at a rate at least six times that of natural gas generation over the next three years.

For the past several years, more than 90 percent of all new generation has been wind and solar that's been added to the grid.

If these projections hold, wind, solar, and hydro will overtake natural gas as the leading source of electrical generation on the grid at some point in 2028.

Residential Homeowner Electric Bills Have Been Going Up.

Over the past three years, the 6.9 percent annualized growth in the average US residential electric tab is taxed on the consumer. 

According to a recent report by EIA, rising prices  are due to public and private utility investments in costly transmission and distribution infrastructure, the modernization of the grid and upgrading  infrastructure resiliency in the face of extreme weather events.

This pressure to enhance grid infrastructure and add new generating capacity is likely to increase as the US faces a projected 16 to 30 percent increase in electricity demand over the next five years.

Recent Heat Waves Reveal Strained Interconnections

Last week experienced a heat wave strong enough that the Chairman Mark Christie of the Federal Energy Regulatory Commission or FERC warned that  “Some of our systems really came close to the edge.” 

One of these systems that was at or near its capacity was the PJM interconnection. This is the US's largest grid operator serving 13 Midwestern states as well as the District of Columbia.

The system hit peak demand of 161 gigawatts between 5 and 6 p.m. last Monday, June 30. 

This exceeded its demand forecast for the summer by 5 percent. The US Energy Information Administration notes that both PJM and ISO New England hit multi-year highs on June 23 and June 24. 

Full sale electric prices hit $1.33 per kilowatt hour on those dates.

A week earlier peak prices were at about 52 cents per kilowatt hour. 

FERC Commissioner Christie summed up the situation by stating, “You never know about the next time, and there’s going to be a next time”

New Jersey Adopts On-Line Permitting

The New Jersey State Senate unanimously passed smart solar permitting legislation on June 30 by a vote of 39 to 0. 

The bill will expedite the approval process for residential solar and battery systems delivering more solar installation and energy bill savings to residents throughout that state. 

The legislation would require that the Department of Community Affairs make an online automated permitting platform for rooftop solar and battery installations available within a year of the passing of that bill signing. 

The households with co-compliant projects will be able to avoid costly and time consuming red tape and obtain these permits online instantly.