Homeowners on the Vineyard will likely face increased energy bills after President Trump’s massive new federal tax and spending bill terminated tax credits for wind and solar projects years earlier than planned, slowing the development of offshore wind, and possibly shrinking the number of solar energy installations, experts said.
Combined with the temporary pause to offshore wind leasing, projects not already in the process toward construction are unlikely to move forward in the next few years, and Island contractors forecast a hit to solar installations as the loss of the federal tax credits for residential solar projects will extend the average payback period from five to seven years, to eight to 10 years.
Trump signed H.R. 1, “One Big Beautiful Bill,” into law on July 4, and it includes the accelerated phase-out of tax credits for wind and solar projects, a policy shift that could have a huge impact on the Island. Trump has said the government forced taxpayers to subsidize these energy sources for too long.
A 30 percent wind and solar project tax credit, which wasn’t supposed to start phasing out until 2032 or expire until 2034, now is only available if construction starts by July 2026, or a project is operational by the end of 2027. Any residential solar projects, which also qualified for a 30 percent credit, that aren’t completed in 2025 are no longer eligible for the tax break; commercial solar projects qualify through 2028.
The new deadlines may prove impossible for offshore wind projects not already under or close to construction, however, as they typically take seven to 10 years to develop.
If the projects haven’t been in process, they’re unlikely to move forward in the near future, Casey Bowers, vice president of government relations and executive director at the Environmental League of Massachusetts, said.
Researchers forecast a decrease in domestic generation capacity, and an increase in electricity prices over the next decade due to the phasing out of the tax credits. Consumers will bear the cost, and the researchers predict households in Massachusetts will see $100 annual increases in energy bills in five years, and $120 in 10 years.
Energy Innovation, a nonpartisan think tank based in San Francisco, estimates a 340-gigawatt loss of electricity generation capacity nationally, and a 1.8-gigawatt decrease in Massachusetts by 2035. “That means that either some of these projects can’t come online because they won’t be able to source their electricity, and also means that the amount of new demand is going to outstrip the amount of new generation, so you’re going to see prices go up,” Dan O’Brien, senior modeling analyst at the think tank, said. Demand will instead be met through existing fossil fuel plants, he said.
Energy Innovation estimates that besides increased energy bills, the bill will cost Massachusetts $8.3 billion in GDP by 2035 as jobs disappear and manufacturing is offshored; the think tank estimates the loss of 6,300 jobs by 2030 in the state.
While state officials under the Healey administration are still uncertain of the range of the impact the bill could have, they believe it’s a step in the wrong direction.
“President Trump’s new law will significantly increase customer energy bills, disrupt critical energy projects needed to meet rising demand, and cost hundreds of thousands of jobs across the nation,” Massachusetts Energy and Environmental Affairs Secretary Rebecca Tepper said in a statement. “Our administration is working hard to lower energy costs for people and businesses, but President Trump and congressional Republicans are taking us backward.”
Gov. Maura Healey’s office is reviewing the legislation and subsequent executive order made on July 7, in which Trump ordered the Department of Treasury to enforce the phase-out of the tax credits, to understand the full impact, but the Washington, D.C.–based Clean Energy Buyers Association estimate a 6 percent increase in household electricity costs because of the bill.
“For too long, the Federal Government has forced American taxpayers to subsidize expensive and unreliable energy sources like wind and solar. The proliferation of these projects displaces affordable, reliable, dispatchable domestic energy sources, compromises our electric grid, and denigrates the beauty of our Nation’s natural landscape,” the executive order said.
Measures in the bill target a wind industry that faced major challenges even prior to the Trump megabill, and there are concerns for the goals of Eastern seaboard states, including Massachusetts, which planned for major energy projects to come online, to become 100 percent renewable in the next few decades. (The Island hopes to use 100 percent renewable energy by 2040.)
“It’s alarming and disturbing,” Elizabeth Wilson, professor of environmental studies at Dartmouth, said.
Wilson said the weakened federal support for offshore wind projects adds volatility to the energy industry, and is likely to hamper fresh investments in offshore wind projects: “You can’t turn the tap on and off a billion-dollar project.”
“I don’t think there’s any doubt that this bill is going to slow down the deployment of offshore wind,” said Richard Andre, president and director of Vineyard Power, a nonprofit advocacy group that supports renewable energy.
Vineyard Wind 1, which The Times reported over a month ago only has four of 62 planned turbines in operation after three years of construction, is just starting to send power to the grid, Andre said. It likely won’t be directly affected by the bill, as it’s already under construction.
Vineyard Offshore, a private company, develops energy projects with investment from Copenhagen Infrastructure Partners, a fund management company based in Denmark. Vineyard Offshore has five offshore wind projects besides Vineyard Wind 1, some of which still need federal permitting. The company declined comment for this article.
Projects by developer Ørsted, headquartered in Denmark, don’t seem to be impacted by the new federal bill. Revolution Wind, which will serve Rhode Island and Connecticut, remains on track for completion in 2026, and Sunrise Wind, which will serve New York, is on schedule to finish in 2027, Meaghan Wims, who does media relations for Ørsted, told The Times in an email.
The Block Island Wind Farm, which was constructed in 2016, is also an Ørsted project, and continues operations near Block Island, southwest of Martha’s Vineyard. South Fork Wind Farm, another Ørsted wind project, is also already in operation, and won’t be impacted by measures in the legislation.
But other projects, like Avangrid’s New England Wind 1 and 2 (20 miles from Martha’s Vineyard), SouthCoast Wind, planned for 30 miles from the Island by Ocean Winds, and BP’s Beacon Wind (also south of the Island), must start construction within the year or be operational by the end of 2027 to qualify for the tax credit. Avangrid declined to comment.
“The fact that it’s now law means there’s certainty,” Andre, with Vineyard Power, said. “The law says if you begin, if you’re fully permitted, and you begin construction by a certain date, or it’s operational by a certain date, the project should be able to proceed, so there’s certainty there.”
Still, he doesn’t doubt that this bill is going to slow down the deployment of offshore wind, and with that, the need for society to address the climate crisis, especially as scientists warn of unprecedented global temperature rise.
The new bill isn’t as dire for solar projects, especially residential ones that are often “a kitchen-table decision” for individual homeowners, Andre said.
“It’s definitely a setback. There’s going to be a dislocation, and solar installations are going to most likely decline for a period,” he said. But he also thinks they’ll bounce back because solar is the best way that a homeowner can get energy independence and be less dependent on utility companies such as Eversource, he said.
Rob Meyers, director of energy technology and co-owner of South Mountain Co. an architecture, engineering, and solar company based in West Tisbury, also predicts a dip in demand for solar installations. But he argued that solar energy remains a good investment even without the residential credit.
“I predict that the federal tax credits will be forgotten very quickly as the cost of electricity goes up,” he said.
This is just another version of what seems to happen every year in the solar industry, he said. “There’s a rush toward year-end to get systems installed so they get the tax credit for that year. Of course, the consequences of missing it are greater this year.”
Solar energy is a fixed cost, so consumers pay a lump sum for electricity up front, whether that’s through a loan or a direct purchase, which fixes a portion of the electrical costs.
“People will have to pay, but those who choose to invest in solar now will pay less, and then they’ll pay considerably less as the rates increase,” Meyers said.
South Mountain Co. has installed about half of the 1,600 solar systems on the Island, Meyers said.
“I imagine there will be a short-term dip in demand as people feel as though they’ve lost that credit,” Meyers said. “That credit is a big reason to go solar. It’s enabled the growth of solar on the Island, but again, I think over time, that will fade and be replaced with the sticker shock of increased electricity prices.”
What a biased article written with a bunch of speculation. So we’re not going to address the real reason?
Consumers are bearing the burden of skyrocketing energy bills, a result of Gov. Healey’s mismanagement of Massachusetts’ energy crisis.
Historically, Massachusetts’ energy grid was supported by an array of contributory sources, including coal- and gas-fired plants, natural gas pipelines, and nuclear centers. Together, this diverse energy portfolio kept Massachusetts residents warm during our notoriously cold winters for an affordable cost.
Unfortunately, just like every other product in the Commonwealth under Governor Maura Healey’s administration, energy bills are soaring to new heights. According to the Massachusetts Fiscal Alliance, 88% of New England’s energy is sourced from nuclear and natural gas. In 2019, the last remaining nuclear plant in Massachusetts closed down for good, taking away 14% of the grid’s portfolio. Meanwhile, Gov. Healey has celebrated her blocking of new pipelines as attorney general.
I’m shocked this reply – so layered with common sense – actually got published. I hope you run for political office.
About time these wealthy land owners stop getting subsidies from the average American taxpayer. Only wealthy people have been able to install solar on their properties. It is not debatable first you have to own a home so number one that makes you better off than most. Second you have to have the money to be able to outlay For the installation. This whole scheme was nothing more than a utopian dream for some. Welcome to reality. We need natural gas pipelines, which the current administration in Massachusetts was adamantly against. With access to more natural gas you will see our electricity cost go down.
1- Solar is so cost effective that everyone should install solar. Everyone.
2- China is leaping ahead of us in renewable energy, creating an unprecedented economic powerhouse. That economic engine will change the planet and the US is being left behind. That creates a national security threat.
3- China has electric cars that cost LESS than $10,000. China has electric cars with 800 miles range. China has electric cars that completely charge in 5 minutes. Allow them in the US.
4- The oil/coal industry is busy selling propaganda that nuclear is safe. Nuclear waste lasts 10,000 years or more. Call the governor (actually, call all the politicians) and say NO to Nuclear. Nuclear is also very, very expensive. Solar is pennies on the dollar by comparison.
5- Vote against the republicans for putting us in this dire situation.
Mary, surely your post was meant to be satire.
I’m not voting democrat when the democratic governor of this state is the reason we’re in this unaffordable mess in the first place. You act like everyone is able to afford the $50,000 cost of solar like it’s nothing.
Also in case you didn’t know. Certain governments (I.e. MASS) classify solar panels as hazardous waste, due to the small amounts of heavy metals (cadmium, lead, etc.) they contain. This classification carries with it a string of expensive restrictions — hazardous waste can only be transported at designated times and via select routes, etc.
Vote democrat and continue with the crazy cost of energy or vote republican for a change and reduce energy costs.
Pants on fire.
“Solar panel costs range from $16,600 to $20,500 for the average 6.5 kW system” – Forbes Magazine.
Also in case you didn’t know. Certain governments (I.e. MASS) classify The majority of decommissioned generation plants as hazardous waste (Plymouth Nuclear).This classification carries with it a string of expensive restrictions — hazardous waste can only be transported at designated times and via select routes, etc.
Not to mention smokestack emissions and used lubricating oils.
Vote Democrat and and continue to see reductions in emissions.
Awesome, does Forbes account for living on the Vineyard? Have you gotten a quote for solar? Because I have and it was over $40,000.
This “green” energy is nothing but a scam. Take a look at Europe. Rolling blackouts, energy rationing and an insufficient supply. Coming soon to the state of MA.
My energy bills have skyrocketed under democratic leadership. Go to my first comment for a little education on why this is happening.
Can someone please tell me if I am wrong, but i think a majority of Americans “voted for this “. The largest dollar amount of energy subsidies from the federal government goes to various forms of fossil fuels. As far as I know, offshore wind is putting power into the grid at 9 cents per KWH– the average for all other sources is 13 cents–Someone please prove me wrong — But I will suggest that you look at your most recent electric bill, write down the cost per KWH for distribution, , and next year , figure out a way to convince me that it’s Healy’s ,Obamas’ or Biden’s fault . —-Post it here ,and then we can discuss this again.
Am I the only one who never noticed one dollar savings in their electric bill once the Wind farm was put into our beloved island waters? Vineyard Wind was sending all the electricity over to the mainland. The millions of dollars in tax benefits they received from the Biden Administration was egregious. You can’t miss what never existed. Drill baby drill.
Jean, I invite you to install solar on your home. After about 3 years it will have paid for itself. Then you will never have an electric bill again.
Nantucket just got a 10 million dollar settlement from vineyard wind for the debris that washed up on shore due to a defective propeller
I’m sure the good government officials on Nantucket will use the money to help offset the increased cost of energy for all islanders
Renewable has failed. Its all tax credits and government subsidy and needs intermittent fossil fuel support. What about ism doesnt work with regard to fossil. Finally some on this site have changed their minds and realize its a big scam. People need to look up the word ”fungible” as it relates to money. Comparing us to China is not useful. Everything there is subsidized and there is no freedom. Drill baby drill and please dont bring up climate change
For ONCE can you have an accurate article about the costs of electricity in MA.
Currently, it has been LEGISLATED that ANY electricity sold by ANY supplier in MA is REQUIRED to be 63% ”renewable”. That means at ANY inflated cost, the supplier MUST buy ‘renewable’. This is a quiet way everyone is forced to subsidize these contraptions. Cape Wind went broke with a projected WHOLESALE cost of electricity in the high 20 center per KW. Read the actual supplier options before you tell us how cheap wind is. If Healy didn’t block the logical expansion of natural gas pipelines, the cost of clean natural gas fueled electricity would decline as it has in the parts of the country without a nanny government. See for yourself. You are FORCED to subsidize this.. more every year. A few years ago it was 40 percent required. Last year 59… Now 63.. Thank your elected representatives on Beacon Hill for not telling the truth. Buried in the nstar site is the link for eastern ma options and requirements
https://www.energyswitchma.gov/#/compare/2/1/02539//
This is what happens in a democracy.
In a related note, the tax rebate for orange tanning cream and Adderall has increased to 200%.
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