Proposed Legislation Threatens 25% Rise in U.S. Solar Costs, Impacting Data Center Growth

Washington D.C. – New legislative proposals in the U.S. Congress, specifically the "One Big Beautiful Bill Act" (H.R. 1), are drawing sharp criticism for provisions that energy experts warn could severely hinder domestic energy development, particularly for data centers. Doug Lewin, President of Stoic Energy, stated on social media that if the bill "passes this way," data center developers would be "fucked" due to Foreign Entities of Concern (FEOC) provisions and an effective new tax. He also highlighted a critical gas turbine shortage, collectively posing a "major national security risk."

The "One Big Beautiful Bill Act," a Republican-led initiative, seeks to amend and roll back key clean energy tax credits established under the Inflation Reduction Act (IRA). Its FEOC provisions introduce stringent restrictions on tax credit eligibility for projects with ties to certain foreign entities, predominantly those linked to China. This complex framework, according to experts, could make it "damn near impossible to build solar here," as stated by Lewin, by effectively denying crucial financial incentives for clean energy projects.

The "new tax" mentioned by Lewin refers to the significant increase in energy costs resulting from the proposed elimination and accelerated phase-out of these clean energy tax credits. Analysts at Enverus project that a full repeal of tech-neutral Production Tax Credits (PTC) and Investment Tax Credits (ITC) could lead to approximately 25% higher power prices for solar projects. These increased costs would likely be passed directly to consumers and developers, making clean energy less competitive.

Compounding these challenges is an existing shortage of gas turbines, a critical component for traditional power generation. The demand for these turbines has been significantly squeezed by the rapid expansion of data centers, which require substantial and reliable power. This shortage means that if solar and other renewable energy sources become unfeasible due to legislative changes, alternative power solutions will also be difficult to secure, forcing projects to "mostly go to other countries," according to Lewin.

The combined effect of restricted clean energy development and limited access to traditional power infrastructure raises serious concerns about grid reliability and national energy security. As a seasoned energy expert with over two decades of experience in clean energy policy and grid reliability, Lewin's warning underscores the potential for the U.S. to fall behind in critical infrastructure development, impacting its economic competitiveness and strategic independence.