Ep 71: Trump’s One Big Beautiful Bill & Community Solar Impacts

by Dakota Malone | Jun 16, 2025

SUMMARY: Dakota explains the urgent impact of potential legislative changes—dubbed the “one big, beautiful bill”—on the future of community solar, particularly the abrupt termination of renewable energy tax credits. He details how developers are racing to “safe harbor” their projects by incurring at least 5% of project costs or beginning physical construction to qualify for existing tax incentives before a possible July 4th Senate vote. Despite market uncertainty and looming restrictions, Dakota remains optimistic about the long-term growth of community solar and encourages large energy users to subscribe now while capacity remains.

Introduction and Industry Context (0:03 – 0:35)

Dakota Malone, co-founder of Community Solar Authority, opens the episode by sharing updates following his return from the Midwest Solar Expo. The hot topic among industry professionals is the growing uncertainty around renewable energy tax incentives, particularly how developers are reacting to proposed changes by “Trump’s One Big, Beautiful Bill.” The focus is on a strategy called “safe harboring,” which developers are using to protect their projects’ eligibility for federal tax credits.

What is Safe Harboring and Why It Matters Now (0:35 – 2:14)

Safe harboring, a provision established by the IRS, allows renewable energy developers to secure the federal Investment Tax Credit (ITC) even if their project is not completed, as long as 5% of the project cost is incurred or physical work has begun. This strategy is critical right now because developers are rushing to meet eligibility requirements before potential changes in legislation make these tax credits disappear. The urgency stems from proposed legislative changes that would shift tax credit access away from developers and anchor subscribers, fundamentally altering the economics of new community solar projects.

How Safe Harboring Works for Community Solar (2:14 – 3:22)

Community solar projects often involve multiple stakeholders and have more complex logistics than residential projects. Developers must evaluate their pipeline and prioritize projects that are most likely to reach completion. Safe harboring can be achieved either by meeting the 5% cost threshold—typically by purchasing panels or inverters—or by demonstrating construction progress such as installing racking systems. This allows developers to lock in ITC credits and continue financing their projects despite market uncertainty.

Strategic Benefits of Safe Harboring (3:22 – 4:08)

Safe harboring offers several key benefits:

It locks in favorable tax credit rates.
It protects project economics even if there are delays.
It attracts investor interest by improving financial viability.
It accelerates the adoption of clean energy by allowing projects to proceed.

These provisions are helping developers continue building community solar assets even amidst rapidly shifting regulatory conditions.

Implementation Methods and the Looming Crisis (4:08 – 5:04)

Developers are using a variety of methods to secure safe harbor status, such as stockpiling equipment and documenting development milestones. The crisis emerges because the Inflation Reduction Act (IRA) tax credits were expected to phase out gradually, but the new bill could eliminate them suddenly. This abrupt change has upended long-term financial planning for many developers, who are now scrambling to qualify their projects before the policy shift takes effect.

The “One Big, Beautiful Bill” and Market Fallout (5:04 – 6:00)

The proposed bill, which has passed the House and is moving to the Senate with a potential July 4th deadline, would accelerate the repeal of renewable energy incentives. Without safe harboring, many community solar projects would no longer be financially viable. The market has already responded, with major solar company stocks plummeting and some residential solar firms declaring bankruptcy. Community solar is especially vulnerable due to its long development timelines and greater complexity.

Specific Challenges for Community Solar (6:01 – 7:04)

Compared to residential solar, community solar faces:

Longer development cycles,
Larger facility construction (e.g., 5 MW vs. 100 kW),
More stakeholder coordination,
Delays from utility interconnection processes.

These factors make it harder for developers to meet the rushed timeline imposed by the proposed legislation, which could drastically reshape the future of community solar if passed.

Risk Management and Developer Responses (7:04 – 7:56)

Developers are responding with mixed strategies: safe harboring eligible projects, adjusting timelines, and considering alternative types of development. If tax credits vanish, some may pivot away from community solar altogether. With the Senate vote looming, developers are urgently working to protect their investments.

Broader Reflections and Industry Resilience (7:56 – 9:01)

Despite the looming crisis, Dakota expresses optimism. The community solar sector continues to grow nationally—even as leading markets like New York shift to utility-owned models. At the Midwest Expo, there was renewed hope that other markets would adopt or expand community solar, with developers actively advocating to lawmakers on the program’s economic and climate benefits.

Final Thoughts and Call to Action (9:01 – 10:42)

Dakota closes by emphasizing the immediate need for large energy users to act. As community solar capacity shrinks and demand rises, available projects are becoming increasingly limited. Companies that delay may miss out on zero-cost, no-installation opportunities to hedge against rising energy costs. He encourages organizations to connect with Community Solar Authority now, while options remain, to lock in savings and contribute to long-term sustainability.

Conclusion

The episode highlights a critical inflection point in the community solar industry. The proposed “One Big, Beautiful Bill” threatens to dismantle the federal incentives that have driven renewable energy growth. Through safe harboring and urgent action, developers and large energy users alike must adapt quickly to secure the benefits of community solar before the window closes.

To listen to the full episode… go to Spotify to listen.

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If you’re new to my channel, my name is Dakota Malone. I’m a co-founder of Community Solar Authority. We’re a commercial solar developer & consultant on a mission to streamline clean energy deployment.

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Read the transcript

(0:03 – 0:15)
Welcome back to Sustainability Strategies by Community Solar Authority. I’m your host, Dakota Malone, a co-founder of Community Solar Authority. We make these podcasts as a way to explain our business in an easy to digest way.

(0:16 – 0:35)
And today I am talking about how I just got back from the Midwest Solar Expo last week. And one of the top of mind conversations for all of our industry peers is the safe harboring going on in the community solar space and ultimately how to navigate Trump’s one big, beautiful bill. Here’s essentially what’s happening.

(0:35 – 1:12)
The incentives that have traditionally driven the growth of renewable energy, including community solar are now set to change. This means that developers are now scrambling to make sure their projects get built and one of the ways that they’re doing that is through this idea called safe harboring. Now, safe harboring was actually a provision established by the IRS, which allows developers to qualify for that ITC tax credit, which has funded and made projects pencil in the community solar space, and they are able to still capture this ITC credit, even if the project is not fully completed.

(1:13 – 1:38)
So what this actually means is that there are future energy developments. There are future community solar sites that are going through the development process now, and through this safe harboring act, developers are able to make those projects financially pencil, even though the ITC is changing. So this is essentially their last ditch effort to get these projects financed, claim the ITC tax credit, and the industry is in a rush to get this done.

(1:39 – 2:14)
It is obviously going to change future pipelines in a world where we have seen many, many percentiles of growth in the community solar space as highlighted by Wood Mac, which I have talked about on this podcast before. There are some big changes that are coming and it is certainly going to change the industry to the extent we’re not sure, obviously seeing many more changes in the residential solar market compared to community solar, but many changes here nonetheless. So I want to talk a little bit more about safe harboring, what it is, and how does it work for community solar? So a key aspect of safe harbor is the 5% cost incurred test.

(2:14 – 2:29)
This means a project can qualify if it has incurred at least 5% of its total cost. This is often achieved by purchasing solar panels, inverters, or other necessary components such that they can say, Hey, we’ve spent our 5%. Therefore we qualify for the ITC.

(2:30 – 2:56)
Alternatively, there are opportunities at beginning construction, which can be established by demonstrating significant physical work on the project, such as installation of racking or modules. Now for community solar projects, developers need to be mindful of deadlines and potential changes to tax regulations, which is what everybody is freaking out about. Safe harbor strategies can help developers navigate these changes and secure the best possible tax credit terms.

(2:57 – 3:22)
So when it comes to community solar, these projects often involve multiple stakeholders and can present unique logistical challenges. Developers should carefully consider these factors when planning their safe harbor strategy. They need to look at their development pipelines, figure out which ones have the most likely chances of making it through to development and the ones that pencil the best and choose to prioritize those for safe harboring strategies.

(3:22 – 3:43)
So in short, the benefits of safe harbor for community solar, it allows developers to lock in current tax credit rates, potentially saving significant money on project costs. It provides a clear path to qualifying for tax incentives, even if there are delays in project completions, which we see all the time in community solar. It attracts investment.

(3:43 – 4:08)
So securing these tax credits can make community solar projects more attractive to investors facilitating project financing. And lastly, by making community solar projects more financially viable, safe harbor provides provisions that help accelerate the adoption of renewable energy. So in short, it allows our developers to take advantage of these tax incentives by displaying their commitment to the project, even before it’s fully completed.

(4:08 – 4:32)
This could look like investing 5% towards that project completion or by commencing physical work on the project. Some additional safe harbor methods include equipment stockpiling, where they’ll put inverters, panels, racking all in a warehouse. There are development milestones and documentation that developers are going through and also financial commitments and contracts to actually build and pursue these projects.

(4:33 – 5:04)
It matters now because the IRA tax credits were supposed to step down gradually, but we have a looming crisis with this one big, beautiful bill, which essentially brings it to immediate elimination versus a gradual phase out. So where developers had these large pipelines of community solar developments and long-term financial planning around the gradual step down of the IRA, essentially almost overnight, we were told, Hey, this is going to go away immediately. And so thus the scrambling begins.

(5:04 – 5:20)
All right. So now I want to talk about the one big, beautiful bill, what we know about it so far, what’s in the bill, how the market’s reacting, and maybe some community solar specific challenges. So the act includes an accelerated repeal schedule of significant renewable energy tax credits in more restrictive amendments.

(5:21 – 5:46)
Now this has not officially passed completely, but it has passed the house heading to the Senate with a potential July 4th deadline. And so this is going to specifically impact community solar projects. Again, from the perspective, if developers do not get the safe harboring structure out of the way and secure their ITC tax credits, many of those projects will no longer pencil because the ITC is what funded those renewable energy growths.

(5:46 – 6:00)
And now they are going to disappear immediately. So we’ve seen shares of us solar companies fall sharply after the house of representatives advanced this sweeping tax and spending bill. I’ve seen bankruptcy notices from residential solar developers.

(6:01 – 6:20)
And ultimately in our space, after talking to multiple owners, operators, and developers, there is much uncertainty and project delays. The challenge we get into with community solar specific challenges is that. There are longer development timelines when it comes to community solar projects versus residential.

(6:20 – 6:41)
They’re more complicated. We’re talking about building, you know, potentially a five megawatt facility versus a 100 KW facility on a house. There are complex pieces moving throughout community solar, including acquisition and any potential complications there, and you know, my favorite all the utility interconnection delays that are associated with community solar developments.

(6:41 – 7:04)
And so with these reasons, we are looking at the one big, beautiful bill to absolutely shake up the community solar industry to the extent. We’re not sure we’ll see if there’s any changes that are proposed in this bill. But again, with a potential July 4th deadline at the time of filling this podcast, that is only a couple of weeks away now, I just want to quickly mention just timeline and risk management when it comes to some of the stuff that we’re seeing.

(7:04 – 7:26)
So if this passes, we’re looking in a 2025 year end deadline, which means these projects need to start to again, work through safe harboring ASAP. There is a Senate voting timeline and implications, as I just mentioned in the previous section. And developers are scrambling to make sure their milestones are hit so that they qualify for these ITC incentives.

(7:26 – 7:56)
So when it comes to risk mitigation strategies that we’re seeing and consulting on with our developers, we’re looking at a mix of safe harbored and new projects. We’re looking at how do we become more flexible with development timelines and what else can we do if these tax credits disappear? And so for those reasons, you know, these projects may be shifting from community solar to different types of developments, all taking in account of what’s going to happen with this one big, beautiful bill. Now there is scenario.

(7:56 – 8:28)
Now, one of the things that I want to cover on the podcast are some real world, safe harboring experiences, current market sentiments and developer strategies, policy advocacy efforts, and their likelihood of success, long-term industry outlook beyond these tax credits. How do we grow the community solar space without these tax credits and community solar’s resilience without federal incentives? So again, I’ve mentioned this on the show before, I’m going to start to bring in some experts on these subjects as it becomes more relevant. So I encourage you to subscribe to the show and stay tuned for future updates.

(8:28 – 9:01)
Now, beyond this crisis, we are still optimistic about community solar, even though, again, New York, as an example, one of the leading community solar states is now changing to a utility owned model, which I disagree with personally. We are still seeing continued growth of the community solar program nationwide. It was always our vision at community solar authority to see the nationwide adoption of it and attending the Midwest Expo allowed hope to come back into the room as we talked about different market updates, and I am sure that we’ll see future community solar markets emerge.

(9:02 – 9:33)
So beyond all of this crisis, we’re also seeing hope and optimism in the space. Developers are going through their safe harboring checklists to secure their pipelines, taking in additional due diligence considerations, still advocating across these talking points about how renewable energy is driving a huge chunk of economic growth in the country. And really making sure that legislators and lawmakers understand these project impacts in conclusion, the state of the union of community solar is flooded with uncertainty with this one big, beautiful bill.

(9:33 – 10:36)
I wanted to make a brief podcast to talk about what safe harboring is, how developers are using it to secure their project pipelines of ITC eligible tax credits, and essentially how we’re going to plan the future of community solar. If you’re a large energy user who has not yet subscribed to community solar, but you’re considering it, we are telling all of our clients to move with urgency this year, we don’t know what the future of community solar development pipelines look like, we know the opportunities going away in New York, and for those reasons, we’re making sure that our clients are educated and ready to subscribe so that they can hedge electricity inflation on a $0 investment without installing solar onsite by participating as an anchor subscriber in an available community solar asset. If all you take away from this is that there will be less available supply and an increased demand because people are going to be wanting to save on energy costs more than ever in the future, while simultaneously dealing with less community solar project availability because of this bill, now is the time to act.

(10:37 – 10:42)
I appreciate you guys tuning in. Thank you for checking out this episode and I will catch you on the next one.