What the One Big Beautiful Bill Act Means for Power

Arguably the most significant legislative policy achievement of the second Trump administration so far, the One Big Beautiful Bill Act, or OBBBA, was signed into law on July 4, 2025. The bill makes sweeping changes to U.S. energy policy that are expected to have meaningful and enduring impacts on power generation and capacity buildout in the medium term, especially for solar power. The bill sets abrupt deadlines on solar project eligibility for the Investment and Production Tax Credits (ITC and PTC), which have provided robust and predictable financial support for solar projects since they were last amended in the Inflation Reduction Act of 2022. Many solar projects already in the planning or financing stages of development will likely lose eligibility for these credits, casting doubt on the future of solar energy in the U.S. and the wider impact this will have on the electric grid. In a recently published report, available to FactSet users, FactSet’s Energy team modeled the effects of the OBBBA on solar buildout in the U.S. through 2030 and investigated the second-order consequences the bill will have for other generation types amidst a period of unprecedented load growth. Some of our key findings are as follows:

Batteries Bolster Solar Development

As solar projects become more expensive to build, co-locating them with battery storage systems may help increase project profitability, especially in areas of high solar penetration. Storage projects retain ITC and PTC eligibility under the OBBBA, though with stringent foreign-content requirements, making them relatively more financially attractive than solar projects. These earned tax credits can be used by developers to support the financing of co-located solar projects that might otherwise face cancellation, which in turn will provide zero-marginal-cost charging to the storage systems. Moreover, in a period of high load growth and grid strain, batteries can take advantage of increasingly high and volatile intra-day price spreads in power markets, buying low during peak solar production and selling during peak demand hours in the early evening. FactSet’s forecast assumes that most currently planned solar projects co-located with batteries will be completed due to this competitive advantage, although trade uncertainty and foreign-content requirements may limit wider storage buildout.

Coal Endures

Given high projected load growth, constrained solar buildout, and favorable regulation and policy signaling from the Trump administration, FactSet Energy assumes that many planned coal retirements will be delayed in the coming years. Rather than shut down due to regulatory pressures and costs, such as the EPA’s MATS program, we assume that coal plants will only retire due to age. As such, coal generation is projected to decrease less than overall capacity, with generation even rising marginally in some parts of the country. Coal will continue to compete most directly with natural gas-fueled power in the market, vying to defend its position as a baseload generating asset. Its successful durability will thus likely be sensitive to any changes in natural gas competitiveness, including delivery networks, turbine supply chains, and domestic gas production.

Seasonal Shifts in Gas Burn

In both PJM and ERCOT, two regions with the largest projected load growth, we forecast higher gas burn growth in the winters than the summers. This is due to two reasons: first, while solar installations will slow, capacity will continue to grow, with associated solar generation peaking in the summer. Second, seasonal load profiles themselves will change, as anticipated loads, like data centers and electric vehicles, are less sensitive to weather patterns and can operate flexibly during periods of grid strain. This seasonal change may have significant impacts on pipeline infrastructure throughput in PJM and surrounding regions during severe cold snaps, given the additional strain of heating demand for natural gas.

Conclusion

The passage of the OBBBA has shifted the financial realities of energy markets, and developers now find themselves trying to navigate a new regulatory landscape amidst significant uncertainty related to trade barriers, power demand, and public policy. The impact of the changes to the ITC and PTC remains to be seen, especially considering high supply chain risk for both solar panels and gas turbines, but any impacts will be complicated by substantial projected data center-driven load growth. For more information on FactSet’s comprehensive power offering and access to our full report, explore our Premium Energy Workstation.

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.