President Donald Trump speaks during a cabinet meeting at the White House, Tuesday, July 8, 2025, in Washington. Evan Vucci/AP
The deficit-boosting bill President Donald Trump signed into law last Friday included provisions that will undermine US clean energy development. Indeed, a team led by Princeton energy expert Jesse Jenkins estimates that it will reduce US solar and wind output by at least 300 gigawatts by 2035—enough to power some 225 million homes.
But some Republicans still thought the bill didn’t go far enough. After a failed last-minute bid to add further subsidy cuts and an industry-killing renewables tax to the bill, Republicans agreed to vote yes after Trump promised to take matters into his own hands.
He delivered on Monday with an executive order titled “Ending Market Distorting Subsidies for Unreliable Foreign Controlled Energy Sources.”
The order basically instructs the Treasury Department to deny a developer’s application for soon-to-disappear clean energy subsidies “unless a substantial portion” of their project is already built. It also directs the Department of the Interior to revise policies favoring renewables. “While many executive orders have limited effectiveness, this one might actually have some bite,” says Yale energy economist Kenneth Gillingham.
“The Trump administration is taking every opportunity it can find to assert its authority not to spend money on things with which it disagrees,” says Don Kettl, a professor emeritus and former dean at the University of Maryland School of Public Policy. “The implications here are enormous.”
“Just in case last week’s legislative sledgehammer didn’t do enough damage.”
Because of the time it takes to permit and site US projects, Gillingham says, the order’s stringent interpretation of the statutory language will have “the effect of quashing the market sooner than would have happened otherwise.”
Bob Keefe, executive director of E2, a national organization of business leaders advocating for smarter climate policies, isn’t too pleased with the order. “Just in case last week’s legislative sledgehammer didn’t do enough damage to our economy, our environment, and the pocketbooks of anybody who pays an electricity bill, the Trump administration is taking yet another swing,” he said.
Trump’s decree asserts that renewables threaten “the fiscal health of the Nation,” a claim Gillingham deems entirely false. “Renewables cost something, but they create jobs and generate clean energy.”
“Our workforce is growing, businesses are expanding, and communities are saving money with consistent, reliable energy,” explains Bill Johnson, the owner of Brilliant Harvest, a Florida solar company, but the legislation and subsequent order put that progress at risk, he says.
The order, Keefe told me, suggests that the administration “either doesn’t understand or doesn’t care that solar, wind, and batteries are the cheapest, quickest, made-in-America energy we can deploy.”
And although Trump questions the reliability of renewables, Gillingham insists that “at the levels of renewable energy we have today, we have nothing to worry about.” He adds, “If anything, adding more renewable capacity could help us meet additional electricity demand.”
As for the notion that the renewable energy market is “dependent on supply chains controlled by foreign adversaries,” well, sure, China dominates the sector, but that’s the result of supportive policies, Gillingham says—and the policies Trump is targeting were enacted to help US firms compete: “We would have to support our clean energy industries if we wanted to increase our share of clean energy manufacturing.”
Solar company stocks took a hit after the order was released. Gillingham says “the combination of high tariffs and removing the tax credits is a one-two punch that will greatly suppress the market for renewable energy.”
Johnson, the renewable energy businessman, concurs: “These federal policies create uncertainty [which] threatens to stall projects already in the pipeline and make it harder to keep building here at home.”