A coalition of renewable energy stakeholders has sued the Internal Revenue Service and the Treasury Department over changes to tax credits that the group says discriminate against solar and wind energy projects. The groups are led by the Oregon Environmental Council and include the Natural Resources Defense Council (NRDC), Public Citizen, Hopi Utilities Corporation, Woven Energy, the City and County of San Francisco and the Maryland Office of People’s Counsel.
“The Trump administration has waged an illogical and illegal war on clean energy, and these arbitrary tax rules are just another salvo,” said Grace Henley, a tax attorney at NRDC, in a statement press release. “This is bad for clean energy, bad for workers and communities, bad for the air we all breathe, and terrible for Americans squeezed by higher energy bills.”
The court case concerns one executive order issued by President Donald Trump following the passage of the One Big Beautiful Bill Act (OBBBA) in July, which removed a safe harbor clause specifically for solar and wind energy projects. Safe Harbor ensures that projects that qualify for tax credits still qualify for the grants if they complete a set percentage of the project by a certain deadline.
The coalition claims that the IRS’s removal of the 5% safe harbor for wind and solar projects 1.5 MW and larger was illegal. This removal of language could prevent solar projects from receiving the 30% federal investment tax credit before it expires on July 4, 2026.
“These new IRS rules have been a blow. We have been counting on new solar projects to bring electricity to those who don’t have it, help support essential services, and create and provide jobs,” said 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.”
