December 23, 2025
Several groups with strong interests in clean energy, led by the Oregon Environmental Councilhave sued the IRS and Treasury Department over anti-solar and wind tax guidelines that they say “illegally harm renewable energy.”
The lawsuit, filed Dec. 18 in the U.S. District Court for the District of Columbia, includes seven plaintiffs from across the country. The group of plaintiffs has called the new tax rules, specifically the “five percent safe harbor” standard for solar and wind construction, “restrictive and unprecedented.”
The new tax credit rule breaks with a decade-long precedent set by the federal government, which previously determined “that an energy project could qualify for a tax credit if construction on that project began before certain statutory deadlines,” the group of plaintiffs said. Earlier this year, President Trump signed an executive order eliminating clean energy structure incentives, and in August the IRS removed that 5% standard for projects over 1.5 MW.
“For more than a decade, Congress has determined that an energy project could qualify for a tax credit if it began construction on that project before certain statutory deadlines,” the group of plaintiffs says. “This gave companies the certainty that their project would qualify for the tax credits, even if they faced unforeseen delays.”
The state of Oregon depends on renewable energy sources such as wind and solar energy, said Jana Gastellum, executive director of the Oregon Environmental Council. These new rules, she adds, not only cause citizens to turn to polluting energy sources, but also increase energy prices.
“Oregon relies on renewable energy. The Trump administration’s unfair decision to pull the rug out from under wind and solar projects will lock Oregon taxpayers into expensive, polluting energy sources,” Gastellum said. “Oregonians are already paying the price through devastating wildfires, toxic air pollution and extreme weather events. We cannot afford to go backwards – not as the climate crisis worsens and communities suffer.”
We distinguish between solar and wind energy
Grace Henley, a tax attorney at the Defense Natural Resources Councilsays the administration’s actions have unleashed an anti-solar war on clean energy that is not only illogical, but illegal. While energy bills continue to rise, these tax laws are bad for clean energy and “terrible” for Americans feeling the financial stress.
“In Maryland, hundreds of thousands of households live paycheck to paycheck and struggle to pay their utility bills,” says General Counsel of Maryland David Lap. “Adding renewable energy lowers those bills and eliminates fuel cost volatility. The Treasury Department’s guidance is a senseless attack on clean energy and an attack on affordable energy at a time when Marylanders can least afford it.”
The group of plaintiffs says these actions by both the IRS and President Trump are part of a group of “specific actions (the Trump administration) has taken to halt or delay wind and solar energy projects.”
“These new IRS rules have been a blow. We’ve been counting on new solar projects to get electricity to those who don’t have it, help support essential services, and create and provide jobs.,” says Tim Nuvangyaoma, former chairman of the Hopi tribe. “The guidelines have forced us to change our plans, and the Hopi Utilities Corporation is now rushing to qualify for tax benefits under the new guidelines. Getting the court to correct this unjust action would give us the certainty we need.”
In addition, plaintiffs argue that other clean energy sources, such as nuclear, geothermal and hydropower, have not been subject to these new restrictions from the Trump administration. The group says the government’s actions are limiting much-needed clean energy generation at a time of dire need as energy bills are skyrocketing.
“Undermining solar and wind energy projects will increase energy prices for the average American and for cities like San Francisco,” said San Francisco City Attorney David Chiu. “Clean energy developers need predictability and certainty to build projects that benefit us all. San Francisco joins this coalition to fight for our clean energy future and keep energy costs affordable for consumers.”
Tags: community investment, policy, tax credit, Trump
