Eight Days to the Tax Credit Cliff

July 4 is not just America's 250th birthday. It is the last day renewable energy developers can begin construction on wind and solar projects and still qualify for federal tax credits during the build-out . Eight days remain. Nearly a third of developers say they plan to suspend or cancel projects as a result, and offers on LevelTen's marketplace have already increased by $2 to $8 per megawatt-hour since the One Big Beautiful Bill Act passed last July .

Some developers warn that waiting out the market will lead to a high no-tax-credit premium, with ERCOT power purchase agreement prices projected to more than double . Matrix Renewables closed $1.3 billion in financing this week for 859 megawatts of solar and 167 megawatt-hours of storage across California, Idaho, and Texas — one of the last major deals to secure tax equity commitments before the cliff. The financing included projects already operating and others still under construction, a structure designed to capture credits while they last.

Can Storage Fill the Gap Without Subsidies?

Britain's energy regulator provisionally backed 16 long-duration storage projects this week as a heatwave underlined the need for technologies that can store renewable power for days rather than hours. Low wind speeds and soaring electricity demand forced gas plants to provide more than half of Britain's electricity on peak days , the Financial Times reported.

The portfolio includes SSE's 1.4-gigawatt Coire Glas pumped hydro project in Scotland, which would store at least 45 gigawatt-hours of energy and generate power continuously for more than 30 hours — effectively doubling the UK's existing electricity storage capacity . Ofgem launched the cap-and-floor support scheme in April to unlock billions in investment and build major new storage projects for the first time in 40 years. An initial 171 projects applied; 77 are now eligible to progress .

The timing is deliberate. The Climate Change Committee has said flexible storage capacity will need to more than triple by 2030 to support a renewables-led power system and reduce reliance on gas during periods of weak wind generation . Britain's heatwave this week — with temperatures exceeding 37°C in parts of England and Wales — offered a preview of the challenge. Solar generation surged, but so did air conditioning demand, and the grid had no way to store the midday surplus for evening peaks.

Across the Atlantic, Texas is projected to surpass California as the country's largest battery storage market in 2026 , according to industry data. Developers plan to add 24 gigawatts of utility-scale battery storage to the U.S. grid this year, with Texas accounting for 53% of new capacity — 12.9 gigawatts , the EIA reported. Battery storage has already set four discharge records in Texas this month, often charging up on solar power that floods the grid in the mornings and putting it back into the system when the sun sets. ERCOT credited its summertime stability to the state's nation-leading deployment of solar and batteries .

Why Is Equinor Walking Away Now?

Equinor decided to end its offshore wind business activities in Japan and will close its Tokyo office by the end of 2026. The Norwegian energy major has been in Japan since 2018 but has failed to win any leases in successive auctions , OilPrice.com reported.

Orsted, the world's largest offshore wind developer, exited Japan in 2024, and Equinor has previously scaled back offshore wind development in markets including Vietnam, Spain, Portugal and France, citing rising costs . At its Capital Markets Day earlier this month, Equinor said it is concentrating its power growth ambitions in selected markets where integration with a broader energy offering is achievable. Building a competitive integrated power business is a key pillar of Equinor's latest strategy .

The retreat reflects a broader recalibration. Offshore wind projects globally have been hit by rising costs and persistent supply chain constraints . Japan's auction structure — which has favored domestic consortia and offered smaller project sizes than European developers prefer — made the market particularly unattractive. Mitsubishi Corp-led consortia also pulled out of Japan's first three offshore wind projects last year, citing surging costs .

Meanwhile, China Three Gorges Corp. is in talks to buy a German wind portfolio from NEAG Norddeutsche Energie AG — operational onshore wind farms with a total capacity of 312 megawatts and an enterprise value of about €300 million or higher , Bloomberg reported. Chinese state-owned enterprises are buying assets European majors are shedding.

What Changed This Week

The renewable energy market is splitting in two. Projects that began construction before July 4 will benefit from federal tax credits through 2030. Everything else faces a new cost structure — and higher prices. Britain moved to backstop its grid with long-duration storage just as a heatwave exposed the limits of short-term batteries. And Norway's Equinor, once bullish on offshore wind expansion, is now retreating to markets where it can integrate power with oil and gas operations.

What to Watch

July 4, 2026: The construction deadline for U.S. wind and solar projects to qualify for federal production and investment tax credits. Developers must spend at least 5% of total project costs by this date to unlock a four-year safe harbor window.

Summer 2026: Ofgem is expected to make final decisions on which long-duration storage projects receive cap-and-floor investment support in the UK. The regulator is requesting detailed bids from the 77 projects that passed initial eligibility screening.

End of 2027: The final "placed in service" deadline for renewable projects that missed the July 4, 2026 construction start requirement but still want to claim federal tax credits under Section 48E.

Q3 2027: Matrix Renewables' 457-megawatt Tormes Solar project in Texas is expected to begin commercial operations, making it the largest operational site in the company's global portfolio.