The ITC sunset hits 680 solar projects in the crosshairs
KEY DEVELOPMENTS
- ITC Sunset Forces 680 Solar Projects to Rethink Economics: A study finds 680 solar and 79 wind projects depend on the 30% Investment Tax Credit for viability, with projects starting after July 4, 2026 facing steep financial headwinds as the credit phases down. Developers will lean harder on PPAs to close financing gaps. (PV Magazine USA) Read More: PV Magazine USA.
- Pennsylvania Enacts Solar Decommissioning Law: Senate Bill 349 now requires ground-mounted solar projects of 2 MW and larger to file decommissioning plans with financial assurance — a first for the state as the U.S. industry eyes 490 GW of new capacity by 2036. (PV Magazine USA) Read More: PV Magazine USA.
- Michigan AG Challenges 1.4 GW Data Center Power Deal: Attorney General Dana Nessel filed an appeal contesting DTE Energy's contracts to supply 1.4 gigawatts to the Stargate data center in Saline Township, seeking to overturn the Michigan Public Service Commission's approval. (Michigan Advance) Read More: Michigan Advance.
- Avantus Closes $1.05 Billion for Solar and Storage: The independent power producer secured a corporate credit facility to finance its utility-scale solar PV and battery energy storage portfolio across the U.S. (Energy Storage News) Read More: Energy Storage News.
- Bipartisan Hydropower Reform Bills Hit Capitol Hill: New legislation introduced in Congress targets the federal licensing and permitting process for hydroelectric projects, aiming to streamline a regulatory framework that has stalled new development for decades. (Renewable Energy World) Read More: Renewable Energy World.
Solar & Storage
The clock is now ticking loudly for solar developers who haven't locked in the 30% Investment Tax Credit. Projects that begin construction after July 4, 2026, and target first power before the end of 2027 face a stark new math: without the ITC, the economics have to work on PPA revenues alone. According to PV Magazine USA, a study counts 680 solar projects and 79 wind projects whose viability hinges on the credit. For developers still in early-stage construction, the pressure to sign stronger offtake agreements — or abandon marginal sites — is intensifying by the week. This briefing flagged rising solar costs under Trump administration trade actions on Saturday; the ITC sunset now compounds that squeeze from the incentive side. Read More: PV Magazine USA.
Against that backdrop, capital is still flowing to developers who can demonstrate bankable pipelines. Avantus closed a $1.05 billion corporate credit facility to fund utility-scale solar and battery storage projects across the country. A billion-dollar raise in this environment signals that lenders still see returns in renewables — but likely on projects that already cleared the ITC safe-harbor threshold or carry contracted revenue streams robust enough to pencil without it. Read More: $1.05 billion corporate credit facility.
In Illinois, ComEd is pushing ahead with 60 new community solar rooftop projects across northern Illinois in partnership with two other companies, according to Solar Builder. The same roundup notes RWE's 155 MWac Crooked Creek Solar project in Oklahoma, backed by a Google PPA — exactly the kind of corporate offtake that will become more critical as ITC support fades. We Energies is advancing construction projects in Wisconsin, and Hydrostor is developing an energy storage project in New York. Read More: Solar Builder.
But Illinois's track record on coal-site conversions tells a cautionary tale. The state's Coal to Solar and Energy Storage Initiative, created five years ago to repurpose retired coal plants with existing grid connections, has underperformed its goals despite the obvious infrastructure advantages. The gap between policy ambition and execution matters for investors evaluating brownfield solar plays: available transmission doesn't eliminate the environmental remediation, zoning, and community complications that slow these projects down. Read More: underperformed its goals.
Pennsylvania's new decommissioning law adds another layer of planning for developers targeting the state. Senate Bill 349 requires ground-mounted solar installations of 2 MW and above to submit decommissioning plans backed by financial assurance — meaning developers must budget end-of-life costs upfront. With the U.S. solar fleet having installed 43 GW in 2025 alone, and projections calling for 490 GW of additions by 2036, this kind of legislation is likely to spread to other states. Developers building 20-year-plus projects need to watch which states follow Pennsylvania's lead, because decommissioning bonds raise project costs and affect returns at the margin. Read More: this kind of legislation.
In California, the state has approved its first carbon storage project at an oil field in Elk Hills. The project could generate billions in federal tax credits and state carbon credits for permanently sequestering CO2 underground, though questions remain about long-term liability if something goes wrong. It's a test case for whether carbon capture and storage can scale in a state that has historically leaned toward direct emissions reduction. Read More: questions remain.
Wind Energy
Offshore wind continues to generate political heat even where no turbines spin. In Virginia's second congressional district, offshore wind development has emerged as a defining issue in a competitive race, alongside flooding and sea-based mining concerns. Inside Climate News reports that the primary has set the ballot for a contest where energy policy may determine the outcome — a sign that wind permitting is no longer just a regulatory question but an electoral one in coastal districts. Read More: Inside Climate News reports.
Meanwhile, the Trump administration's approach to offshore wind payouts is drawing scrutiny. Heatmap reports on the regulatory and financial dimensions of the administration's offshore wind policy, though details remain thin. This follows last week's reporting on trained offshore wind workers left stranded as projects stall. The 79 wind projects identified as ITC-dependent in the PV Magazine study underscore how federal policy shifts are squeezing the sector from multiple angles — lease uncertainty, trade friction, and now tax credit expiration. Read More: Heatmap reports.
Policy & Markets
The collision between data center demand and utility regulation reached a new intensity in Michigan. Attorney General Dana Nessel, joined by environmental groups, filed initial arguments appealing the Michigan Public Service Commission's approval of DTE Energy contracts to supply 1.4 gigawatts to the Stargate data center in Saline Township. The appeal seeks to overturn those contracts and reinstate contested case proceedings — meaning full evidentiary hearings where the energy supply arrangements would face public scrutiny. For the broader data center power market, this is a precedent worth watching: if state AGs can unwind commission-approved supply contracts, developers and utilities will need to build longer regulatory timelines into deals. Read More: filed initial arguments.
The Trump administration's USDA is also inserting itself into the energy-land nexus. Heatmap reports the agency is using farmland regulations to target energy projects, though specifics are limited. Any tightening of agricultural land rules would directly affect utility-scale solar siting, which increasingly competes with farming interests in the Midwest and Southeast. Read More: Heatmap reports.
On Capitol Hill, bipartisan legislation to reform hydropower licensing and permitting found its way to Congress. The federal relicensing process for hydroelectric dams has long been criticized as excessively slow — some relicensing proceedings drag on for a decade or more. Reform could unlock capacity upgrades at existing facilities, which would add clean firm power to the grid without the siting fights that dog new wind and solar projects. Read More: reform hydropower licensing and permitting.
LOOKING AHEAD
- ITC Safe-Harbor Deadlines: Developers with projects that haven't begun construction face a narrowing window to qualify for the 30% credit. Expect a rush of equipment purchases and groundbreakings in coming weeks as companies race to document safe-harbor activity before the cutoff hardens.
- Michigan Data Center Appeal: The Nessel challenge to DTE's 1.4 GW Stargate contracts could take months to resolve, but the court's procedural decisions in coming weeks will signal whether other state-level data center power deals face similar legal risk.
- Decommissioning Rules Spread: Pennsylvania's SB 349 may prompt similar legislation in solar-heavy states across the Mid-Atlantic and Southeast. Developers should track committee activity in Virginia, North Carolina, and Ohio, where agricultural and land-use tensions around solar are already running high.
TODAY'S QUICK ANSWERS
Q: What does the ITC sunset mean for solar PPA pricing?
A: With 680 solar projects dependent on the 30% credit for viability, developers who can't safe-harbor will need higher PPA rates to make deals pencil. Offtakers — especially corporates and utilities signing long-term contracts — should expect upward pressure on prices for any project that missed the construction-start deadline. The shift transfers more risk onto the revenue side of the capital stack.
Q: Why should developers outside Pennsylvania care about its decommissioning law?
A: Because it's a template. With 490 GW of solar capacity projected by 2036, state legislatures are increasingly asking who pays to remove panels in 25 years. Financial assurance requirements add upfront cost and complexity. Developers building pipelines in other states should model decommissioning bonds into their pro formas now, before they're mandated.
Q: What's at stake in Michigan's challenge to the DTE data center contracts?
A: If the appeal succeeds in overturning 1.4 GW of commission-approved supply contracts, it would establish that state attorneys general can reopen utility-data center deals after regulatory approval. That raises counterparty risk for every large load-serving agreement in states with active AGs — and could push data center operators toward behind-the-meter generation to reduce regulatory exposure.
THE BOTTOM LINE: The ITC sunset is forcing a structural reset in solar finance just as rising costs, farmland regulations, and state-level legal challenges are compounding project risk — and the developers who locked in credits, contracts, and construction timelines early will hold the advantage through 2027.