One Big Beautiful Bill – Higher electricity prices and increased demand for renewable energy?
July 10, 2025 – The last few months in the US renewable energy sector have been a bit chaotic as the US Congress debated, and eventually passed, the massive budget reconciliation bill known as the One Big Beautiful Bill. On July 4th, President Trump signed the bill, and it became law. For renewable energy companies, the most significant provisions in the bill were the changes the wind and solar investment tax credit, or ITC. A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company would otherwise pay the federal government.
Under the Inflation Reduction Act of 2022, the ITC was set at 30% or higher for a decade. Under the new law, tax credits for wind and solar projects phase out much sooner unless extended in the future. The changes effectively bring the tax credit regime back to where it was prior to the Biden administration, whereby tax credits expired every couple of years and were subject to multiple extensions by successive administrations. To qualify, these projects must either be completed by the end of 2027 or begin construction within the next 12 months. Battery Energy Storage System (BESS) projects are not impacted by the new law and retain the higher ITC. That’s good news for Revolve and projects like our Vernal BESS Project – an 80 MWh energy storage project in Utah.
The new law does not affect eligibility for tax credit “adders” (e.g., for projects located in an energy community or that meet domestic content requirements), eligibility for accelerated depreciation or the ability to transfer tax credits to third parties for cash.
For Revolve, the is very little short-term impact to our project portfolio. The financing structures for projects will change and adapt to accommodate any potential loss of tax credit funding and should be clear by the time our late-stage projects in the US reach ready-to-build stage. Ultimately, power purchase agreements (a “PPA” – what the customer pays us to generate electricity) will have to take into account the removal of the ITC and that will likely result in higher power prices. According to Energy Innovation (www.energyinnovation.org), the new bill will result in wholesale electricity prices increasing by 25 percent by 2030 and 74 percent by 2035. Utilities are expected to pass these costs on to consumers and electricity rates would increase 10 to 18 percent by 2035 for residential, commercial, and industrial consumers.
Prices will likely rise for consumers and at the same time, demand will also be increasing. A report from the U.S. Department of Energy finds that data centers alone consumed about 4.4% of total U.S. electricity in 2023 and are expected to consume approximately 6.7 to 12% of total U.S. electricity by 2028. Where will that power come from? Supply chain constraints, permitting constraints and costs may limit the ability of nuclear or natural gas plants to fill to gap in the short term. Over the long term, demand for renewable energy, which can be deployed rapidly, will remain. It is worth noting that Mexico does not have tax credits and Canada only introduced them in the last year or so. Renewable energy projects get built without tax credits.
Importantly at Revolve, we are geographically and technology diverse. We develop wind, solar and BESS projects across North America. Our 3,000 MW pipeline provides us with the flexibility to dedicate resources to the jurisdiction that makes the most sense. We have late-stage utility solar in Canada, late-stage wind in Mexico, late-stage BESS in the US and late-stage distributed generation solar in Mexico. We also have 12 MW of operating projects in the Canada and the US. These are all projects that are not impacted by the ITC reduction in the US. And for our US projects, it is possible the One Big Beautiful Bill will accelerate development as projects look to take advantage of the ITC before it expires.
We are convinced the fundamental economics of renewable energy will ensure the industry will survive and thrive. We actively assess and monitor the regulatory environments we operate in, and we still see immense opportunity in the US. While the situation in the US will remain bumpy as it settles, the long-term prospects remain strong.
The information in this blog post is current as of the publication date, but the situation in the US continues to evolve. We’ll continue to update as developments occur, but here are some good resources to follow for up-to-date information:
