Google, Microsoft, Amazon, and other data center operators have urged US Treasury Secretary Scott Bessent to uphold the current wind and solar energy subsidy guidelines. They argue that these policies have been crucial to their growth and have helped them remain competitive against China.
The appeal comes in response to new regulations proposed under the Trump administration, which tighten the eligibility of AI projects for federal renewable energy tax credits. Critics warn that these changes could slow power infrastructure development, potentially limiting electricity supply to data centers as AI demand continues to rise.
In a letter to Bessent dated August 4, the data center owners stated that any current delays in introducing new energy supplies could greatly affect their capability to fulfill future electricity demand in the AI boom era.
The Trump administration sets up stricter regulations for wind and solar energy subsidies
Last month, US President Donald Trump signed an executive order demanding stricter regulatory measures for renewable energy tax credits. This also applied to AI projects, altering their initial construction definition.
Industry executives mentioned that they had strictly adhered to the regulations set for the wind and solar energy subsidies for the past decade.
Meanwhile, apart from data center owners, Clean Energy Associates, a North America-based firm highly reputed for reliable data and analysis in the solar and energy storage projects, also cautioned that if the Trump administration’s stricter regulations take effect, then the US should be ready to face a 60-gigawatt loss of solar power development come 2030.
Additionally, these stricter regulations will affect the United States’ economic status. To illustrate this, reliable research reveals that the data center sector alone contributes roughly $3.5 trillion to the country’s total gross domestic product from 2017 to 2023. In addition, it offers job opportunities to around 600,000 individuals, per DCC’s analysis.
The fate of these regulations will be determined on August 18, the deadline for the Treasury Department to release the final updated regulations for wind and solar energy subsidies.
Trump refers to wind and solar energy as “unreliable” forms of energy
On Friday, August 15, the US Treasury Department unveiled stricter regulations for solar and wind projects that required full physical attention from developers running big solar and wind projects, not the amount of funds they had invested in the project.
Since Trump took office in January, his goal has been to reduce the industry’s dependence on wind and solar energy. Based on his argument, these energy sources are unreliable, expensive, and are connected to China’s supply chains. Hence, with these new regulations in place, Trump asserts that it will limit who can get tax credits. However, unless a massive part of a facility is constructed, this limitation will not apply.
To be eligible for a 30% tax credit and bonuses to increase one’s subsidy, the One Big Beautiful Bill Act , which Trump recently signed into law, highlights that projects must be initiated by July 2026 or start operating by the end of 2027.
Furthermore, these new regulations demand utility-scale projects to be highly centered on physical work to qualify for the credits for projects set to start construction on or immediately after September 2. In the meantime, the sector has four years to claim the subsidies.
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