U.S. Renewable Energy Firms Seize Advantage as New Tax Rules Sideline Foreign Competitors

Sweeping tax reforms in Washington are reshaping America’s clean energy landscape, handing a decisive edge to domestic players like First Solar and NextEra Energy.

New provisions in the One Big Beautiful Bill Act (OBBBA) bar “Foreign Entities of Concern” — including companies tied to China, Russia, Iran, and North Korea — from accessing lucrative federal renewable energy tax credits.

The rules are expected to drive billions of dollars in investment toward U.S.-based projects while pushing some foreign-backed developments out of contention entirely.

“These restrictions address one of the biggest loopholes under the IRA,” said Mark Widmar, CEO of First Solar. “It’s not unreasonable to expect there will be limited Chinese solar manufacturing in the U.S. for the foreseeable future.”

Pricing Power and Expansion Plans

With foreign competition sidelined, U.S. manufacturers are gaining leverage. Jeff Osborne, Managing Director at TD Securities, noted that, “The retreat of foreign companies and tariffs also meant U.S. manufacturers such as First Solar could charge more for their goods amid rising demand for power.”

First Solar has already announced plans to expand production capacity by over 6 gigawatts in the next two years. Meanwhile, NextEra Energy — the world’s largest operator of wind and solar projects — sees a more competitive environment ahead.

“We compete against a lot of small developers who don’t have the balance sheet,” said John Ketchum, NextEra’s CEO. “There might be less competition from folks that have not safe harboured.”

The OBBBA’s “safe harbour” provision allows developers to lock in tax credit eligibility by starting construction or investing at least 5% of project costs before looming deadlines. Industry insiders say this could accelerate project timelines as firms rush to secure benefits.

According to Lazard, utility-scale solar is still among the cheapest power sources in the U.S., costing less than natural gas in many markets. This cost advantage, combined with the new competitive dynamics, could spur a wave of domestic renewable deployments

Despite the optimism, analysts caution that raw material constraints — particularly for copper and polysilicon — could dampen the pace of growth. A recent PwC report warned that climate-related water shortages could threaten up to 34% of global copper supply by 2035, a critical input for both solar and semiconductor manufacturing.

Policy uncertainty is another concern. While the current administration is prioritizing domestic energy production, a shift in political leadership could bring fresh challenges to tax credit structures and manufacturing incentives