The clean energy industry has learned the hard way that having the law on your side doesn’t always mean you win.
Since taking office for his second term, President Donald Trump has attempted to delay or cancel dozens of wind and solar projects. These initiatives all underwent extensive, rigorous reviews to secure federal approval, yet the Department of the Interior and other agencies have routinely frozen their permits for vague “national security” reasons, or occasionally with no explanation at all. These sweeping administrative attacks have all but tanked the offshore wind sector and have led many major developers to take financial payouts from the administration rather than fight indefinitely for permits in court.
This ongoing onslaught is a primary reason why solar and wind companies have thrown their support behind efforts in Congress to negotiate a bipartisan “permitting reform” bill. A group of senators reached a compromise earlier this month on legislation they call the Bipartisan American Affordability and Jobs Act (BAAJA). While lawmakers won’t vote on the package until after the midterm elections, the renewable energy sector has hailed the compromise as a crucial win. The bill would speed up environmental reviews for all kinds of energy projects, ranging from high-voltage transmission wires to oil pipelines, and it also contains a number of provisions specifically designed to deter current and future presidents from blocking clean energy. Notably, Trump reportedly told aides just before the compromise became public that he would ease up on wind projects in order to reach a broader deal.
Cracks, however, are already emerging in the fragile accord. While the renewable energy industry has remained steadfast in its support of the bill, a number of policy experts and key climate advocates are arguing that the legislation’s “project certainty” provisions would do little to prevent Trump or another executive from ultimately blocking solar farms and offshore wind turbines. The Trump administration itself underscored this threat this week when it announced that it would review three separate permits for wind farms off the Atlantic Coast, including one high-profile project that is already fully constructed and up and running.
“The administration’s action against [the wind projects] just further demonstrates the lengths they will go to to obstruct clean energy progress, especially offshore wind,” said Elizabeth Klein, who led the Bureau of Ocean Energy Management, which oversees offshore wind permits, under former president Joe Biden.
The project certainty portion of the Senate bill features two key mechanisms. First, it declares that the federal government “shall not take any new action that would revoke, rescind, withdraw, terminate, suspend, amend, or alter” a project that has already received a valid permit. This is largely a forceful restatement of the existing legal status quo, since federal permits that are duly issued are not supposed to be canceled arbitrarily. But the bill goes a step further by offering companies two main legal remedies if the government does take such prohibited actions.
One remedy is the formal reinstatement of the permit, which critics note is somewhat redundant. Federal judges have already shot down the Trump administration’s past attempts to halt wind projects, yet the administration continues to seek ways to revoke those permits. If the bill passes, the courts would simply be empowered to order the restoration of permits in much stronger terms.
The other remedy is a cash payout. The courts would be authorized to order the government to refund a project developer between 25 and 50 percent of the total costs of their project, an amount that for a major offshore wind farm could easily reach into the billions of dollars. The money for these settlements would come from the Judgment Fund, a specialized bank account that the federal government uses to pay out legal settlements. This fund typically disburses around $2 billion in settlements per year, and successful claims under the new permitting bill could lead to a significant spike in federal payouts.
The other key component of project certainty in the bill is an anti-discrimination clause that would ban the “disparate treatment” of any particular energy source, whether it involves solar panels or coal plants. If a wind developer found tangible evidence that the government denied them permits as part of a systematic anti-wind pattern, they could present that evidence to a judge. If persuaded, the judge would then order the government to restore the permit and pay the developer the entire construction cost of the wind farm, though this full reimbursement would only apply if the developer successfully finished building it.
Supporters of the bill argue that the promise of financial relief would help lure skittish investors back to the renewable energy industry, which has faced severe turmoil under Trump. This issue is most critical for offshore wind. Major international companies like Ørsted and Equinor spent billions of dollars to build wind farms in the Atlantic during the Biden administration, but their costs ballooned after the pandemic snarled supply chains and Trump sought to dismantle their existing projects. These companies now view the United States as largely uninvestable, even as Northeastern states still require a massive expansion of offshore wind capacity in order to meet their binding climate goals.
The cash payout provision is designed to help make the U.S. seem like a less risky place for long-term capital deployment. The American Clean Power Association, a trade group representing wind and solar developers, said in its formal analysis of the bill that “greater certainty lowers financing risk before construction and reduces the chance that years of development and investment will be stranded by a later policy reversal.”
While the promise of reimbursement from the federal government would be welcome news for risk-averse investors, it remains unclear whether it would actually lead to more clean energy getting built on the ground. Opponents of the permitting reform bill point out that Trump has already been paying to stop renewable power plants from being built, albeit on a smaller scale. The president has worked out several deals to buy back offshore wind leases from energy developers in exchange for those developers committing to build a fossil fuel project elsewhere instead. These arrangements are currently being challenged in court, but in the meantime, they function as direct repayments for leases that Trump originally intended to block.
The project certainty provisions “are unlikely to deter the Trump Administration from continuing to mess with clean energy permits, since this administration has shown an eagerness to use the public’s money to advance its own policy goals,” said Matthew Littleton, a former attorney at the U.S. Department of Justice who worked extensively on environmental law issues.
Littleton also points out that the anti-discrimination provision may not work as intended in practice. The baseline for calculating “disparate treatment” is defined as the average pace of project approvals over the most recent five-year period. By the time Trump leaves office, he will have spent four years actively expediting oil and gas projects while delaying almost all major solar and wind efforts. This specific baseline would likely prevent wind developers from successfully making a discrimination claim, while ironically also protecting a future president from walking back support for new oil and gas development.
As if to highlight these lingering risks, the White House stated in court filings over the past week that it is seeking to rescind permits for three offshore wind projects along the Atlantic Coast. One of these projects, the 700-megawatt Revolution Wind installation, is already complete and actively delivering power to Rhode Island, while the other two remain in the early stages of development. In each filing, the government has stated only that it seeks to “reevaluate … compliance” with federal law.
Over the past year, Democratic negotiators in the Senate have repeatedly warned that this sort of administrative behavior would jeopardize any potential bipartisan deal. Senator Sheldon Whitehouse of Rhode Island, one of the primary authors of the bill, said in the spring that he would not endorse a compromise bill unless the administration stopped blocking wind farms. This week, however, he appeared to change tack, describing the administration’s move against Revolution Wind as yet another compelling reason to pass the legislation.
“Frankly, we need to get permitting certainty in law, and this proves it,” he said in a public statement.
The bill would indeed offer financial protection to a company like Ørsted, ensuring that a president could not wreck billions of dollars worth of private investment with no justification at all. The central question, however, is whether it can effectively end the government’s prejudicial assault against offshore wind entirely. The answer to that question could determine how millions of people in the Northeast keep their lights on and heat their homes, and for now, the outcome remains up in the air.