California's ambition to achieve 100% renewable energy by 2045 faces challenges after new federal tax legislation was signed. The changes shorten the timeline for developers to secure tax credits for solar and wind projects, expiring at the end of 2027 instead of 2032. Additionally, restrictions prevent companies from qualifying for these credits if they use components from specified foreign entities, notably impacting California's clean energy sector. These factors could lead to delays or cancellations of multiple projects, further complicating the state's energy transition efforts.
The changes in federal tax incentives could affect the feasibility of new solar and wind projects as the state is counting on them to provide more electricity for Californians.
Developers of wind and solar projects now face a new, shorter deadline for obtaining tax credits; most now expire at the end of 2027 instead of no sooner than 2032.
The new federal rules bar companies from accessing tax credits if they rely on major components from China or other foreign entities of concern.
In California, 11 solar projects and one onshore wind project now face potential delays or cancellation, affecting the state's ability to meet its renewable energy goals.
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