A panel of veteran Washington observers talked the last week in January about the current federal policy outlook for renewable energy. The discussion took place at the 21st annual renewable energy law conference at the University of Texas.

The panelists are Mike Catanzaro, CEO of CGCN, a Republican policy shop, and a former White House special assistant for domestic energy and environmental policy during the Trump first term and, before that, senior policy adviser to House Speaker John Boehner (R-Ohio), JC Sandberg, chief policy officer for the American Clean Power Association and, before that, managing director and executive counsel for global government affairs at GE Renewable Energy, Whitney Stanco, managing director for energy policy at Compass Point Research & Trading, whose reports help translate policy into real-world effects on the market, and John Smirnow, a trade lawyer with Smirnow Law who led work for most of the period 2011 through early 2023 for the Solar Energy Industries Association on supply chain and trade issues. The moderator is Keith Martin with Norton Rose Fulbright in Washington.

Political Obstacles

MR. MARTIN: Interior Secretary Doug Burgum announced early last year that no approvals should be given for wind or solar projects from federal agencies under the Interior Department umbrella without his personal signoff. He has not been approving much. The Bureau of Land Management and other offices within Interior have not been taking meetings with developers while they await instructions from Washington.

Mike Catanzaro, what are you hearing about the durability of that policy? It works at cross purposes with the administration's desire to increase the supply of electricity for data centers.

MR. CATANZARO: There is a bit of a breakthrough on solar. I don't think you will see any breakthrough for the rest of the administration on wind.

The best approach for developers is to try to align particular solar projects with administration priorities on AI and getting more electrons on the grid, and then line up support for the projects from Republican governors or key members of Congress who are on good terms with the president.

In terms of political durability, the current policy will probably remain in place for the rest of the administration. Legal durability may be another story. We will see what the courts have to say.

MS. STANCO: I have to provide a quick disclaimer. My comments today are for informational purposes only, and do not constitute investment advice or a recommendation to buy or sell securities. Additional disclosures can be found on the Compass Point Research & Trading website.

I fall in Mike Catanzaro's camp. You are already seeing some behind-the-scenes softening. It will become more visible over time. There does seem to have been a subtle shift in tone.

MR. SANDBERG: The delays affect 69 discrete actions related to permitting wind and solar development on federal lands. Wind did not have a terrible year in 2025. New wind projects were still being built, but it is getting harder to build them.

I do not disagree with Mike Catanzaro. The president's animus toward wind is well documented. Behind the scenes, there are some subtle shifts largely driven by litigation, but litigation is not a path to success for an industry that is impatient to deploy capital and generate more electricity to keep up with rising demand.

Litigation may be a necessary path, but we are hoping that as the industry wins more cases, that will not remain the only path forward.

MR. MARTIN: Mike Catanzaro, the Republican governor of Nevada sent a well written letter to Secretary Burgum in August saying basically that Nevada does not have oil and gas, it needs electricity from renewable energy, and there has to be a path forward for such projects. Did he get a response?

MR. CATANZARO: He did. The governor was careful to align himself with the administration's agenda of energy dominance through increasing production of fossil fuels. But he said, "My state is in a unique situation. We have a large number of solar projects in the queue. We would appreciate it if you could help us figure this out."

This goes back to my earlier point. The governor has a very good relationship with Secretary Burgum as the former governor of North Dakota. He got a hearing and a sympathetic ear. Without getting into too much detail, I think he not only got an answer, but he is also making some progress.

MR. MARTIN: Many people think the best path to an approval is to offer something the administration wants. Mike, your suggestion was to find Republican officeholders who can argue the case. What do they need to say when they get a hearing?

MR. CATANZARO: The administration wants more data centers connected to the grid. To the extent you can tie a solar project to construction of a new data center, you will get a sympathetic ear. The administration will listen because you are aligning the project with an overarching priority of the president.

MR. MARTIN: JC, other thoughts? You are on the front line in Washington.

MR. SANDBERG: I agree with Mike. This is a transactional administration. There is a lot of trading of one thing for another.

Tying a project to something that is a priority for the administration is always a good strategy not only for solar, but also for storage. Storage is emerging as a key component of data center deployment. There is now even battery storage tied to power plants that use fossil fuels.

Storage is the type of project to which there is least resistance. Solar is finding a way. Anything wind related is a fight. It does not matter that a wind project is tied to a data center.

MR. MARTIN: For the first time in my experience, foreign companies seeking favorable lobbying outcomes are asking US lawyers whether they need to join Mar-a-Lago or the members-only dining club started by Donald Trump, Jr. in Washington. What is the answer? [Silence] Anyone?

Moving on, the renewables companies lack political stroke with this administration. The hope had been that the AI companies and data centers would take the lead. Mike Catanzaro, you lead a coalition of data center companies and utilities that is trying to help in this area. How is that effort going?

MR. CATANZARO: The coalition is organized around four policy goals that reflect what the members of the coalition want. They are permitting reform, regulatory reform, supply-chain resilience and public-private partnerships. We are working out specific policy proposals that we can take to Capitol Hill with administration support, if possible.

The administration wants energy dominance. It wants to win the AI race with China. There are things that must be done to win, one of which is to increase the electricity supply. We feel like we are getting a sympathetic ear from the administration.

Some of the members of the coalition are renewables companies. We have members that build solar. We have utilities. We have gas pipelines. We have the full value chain and, because of that, we have had a positive reception from the administration.

MR. MARTIN: It seems like the political tide is turning against data centers. Many politicians now argue that data centers are the reason electricity prices are increasing. What sort of pushback are you getting?

MR. CATANZARO: The tide has turned for sure. We are seeing that at the local level, and it is filtering up to the federal level. The administration has taken the bull by the horns. It is pressing the hyperscalers and utilities to promise that the average retail electricity customer will not bear the cost of the generation and transmission build out to serve data centers.

Offshore Wind

MR. MARTIN: The administration issued stop-work orders against several offshore wind farms that are largely complete. Three federal district courts ordered the stop-work orders against the Empire Wind, Revolution Wind and Coastal Virginia Offshore Wind projects temporarily lifted. Sunrise Wind has a hearing imminently. Vineyard has also sued. What do you think will happen ultimately to these projects?

MR. CATANZARO: There are two separate questions. Will the projects be allowed to finish construction? The answer you are hearing from the courts is yes. They have been granted preliminary injunctions, which means that the courts think they will win ultimately on the merits. There were rulings from the bench, which is unusual.

The other question is whether they will be allowed to operate once they have been built. That remains to be seen.

MR. SANDBERG: The arguments in the Vineyard case are today. Sunrise is next week. Do I think they will be built? Yes. Will there be a detente when they try to operate? The utilities that are building them need the power, so I think they eventually will end up operating. Do I think it will be a smooth path to operation? Probably not.

MS. STANCO: Everything depends on the Trump administration. The administration has the ability to string this out and make life really difficult for these projects. At the same time, it is calling on the data centers to cover the full cost of their electricity. Offshore wind projects have an effective load carrying capability of 69% in PJM. All of that said, at the end of the day, if the administration wants to make life difficult for offshore wind, it can.

MR. MARTIN: Will these projects be allowed to operate?

MS. STANCO: Mike Catanzaro is exactly right. When you get a preliminary injunction, a court thinks you have a high likelihood of winning on the merits. There could be appeals. There are other ways apart from prolonging the litigation that the administration could make life continuously difficult for these projects. We are not at the end of the road, but my bet is they eventually will be allowed to operate.

MR. MARTIN: Is litigation an effective remedy? The administration can appeal every decision on procedure. It is like restarting the 24-second shot clock in a basketball game over and over again. At the end of the day, aren't these questions that require a political resolution?

MS. STANCO: In the absence of permitting reform, it may be the only option for wind projects. You have to litigate to try to advance the ball.

MR. MARTIN: It is expensive and time consuming. It does not lead to a final resolution.

MR. CATANZARO: It is a tool. You should use it.

MS. STANCO: The problem with the situation today is Congress is so hamstrung that the executive branch is the only game in town. If you don't like what the executive branch is doing, your only remedy to go to court. Sometimes you can get finality from a court, but as you suggest, sometimes not.

The pendulum swings back and forth between administrations. We are talking about long-lived assets. That is not a great environment in which to make these kinds of investments. The only solution is for Congress to pass comprehensive permitting reform so that the bureaucratic discretion to reverse course on projects that have already been approved is greatly reduced.

MR. SANDBERG: Keith, you know as well as anyone given the volume of deal flow that your firm does. These projects need certainty. Whether it is an oil or gas pipeline or an offshore wind project or a new transmission line, these projects live beyond administrations even in the planning process.

As Whitney said, right now the only option is to sue. But that is not an efficient way to reach a resolution. The permitting reform debate has created strange bedfellows. Everyone needs long-term certainty.

Permitting Reform

MR. MARTIN: Congress seemed headed to modest permitting reforms before the administration blew up the effort by issuing the offshore wind stop-work orders. The House passed a bill on December 18 with some Democratic support. Will the bill pass the Senate and, if so, when?

MR. SANDBERG: I am out of the prognostication game. We are going to keep pushing it. We think it is very important. Transmission at some point has to be added back to the bill. The House took it out. As recently as 2024, it was part of a more comprehensive set of proposed permitting reforms being promoted by Senator Joe Manchin, who has since retired.

The Senate Democrats have drawn a line in the sand. They are demanding a more stable and predictable permitting process. Whether they will have to compromise is anyone's guess.

MR. MARTIN: What in the House bill would help renewables?

MR. SANDBERG: The main thing that might ultimately come out of it for renewables is to make it easier to build transmission lines. That is one of the key pieces. Another important piece for us is business certainty. We need to take the politics out of this. Every administration plays the game. We have to stop that. It is not helping the country.

MS. STANCO: I don't think permitting reform will pass in this Congress.

It is hard to see how Democrats would be rewarded by their base for working with Republicans in this environment.

There is not enough time left on the calendar for Congress to get all the other things done on appropriations, crypto and farmers that it wants to tackle in the near term. Then you get into the summer and maybe it is doing another budget reconciliation bill and maybe there is another Supreme Court justice nomination in front of the Senate. Congress is out of session in August and half of September. By October, it will recess so that members can go home to campaign for reelection.

MR. CATANZARO: There were two bills that passed the House: a set of Clean Water Act reforms and one to accelerate the speed at which environmental impact studies are done under the National Environmental Policy Act. They are good bills. Democrats have put their pens down because of the president's hostility to offshore wind.

The stop-work orders stopped the permitting reform effort dead in its tracks and will make it very difficult to get these bills passed.

Wind and solar will be hurt by the failure to pass comprehensive permitting reform. A 2023 Stanford study found that of the most litigated projects under NEPA, two thirds were solar projects, second in line were pipelines, and third in line were wind projects.

Data Centers

MR. MARTIN: President Trump is directing PJM to hold an auction this September in which data centers will bid for 15-year contracts for electricity. How do you expect this to affect independent generators?

MS. STANCO: It is a matter of supply and demand. More power plants have the potential to cause generating capacity to exceed load. If that happens, it will reduce capacity prices and not benefit independent generators. However, generators will be able to bid into an auction and get 15-year solid payments for their projects.

There are few details. The market is viewing it currently as a negative. Existing generators are earning good prices for their electricity. If that turns in a different direction, it would be a negative.

MR. MARTIN: Data centers seem somewhat price insensitive when it comes to electricity. They will pay whatever it takes to get the power they need. However, developers say they are not seeing many contracts with data centers for electricity at prices above $100 a megawatt hour. The only thing the rumors of high prices do is drive up the return expectations of their investors.

Ironically, developers today wait until the last moment to sign the power contract because the costs to build their projects are unpredictable. Labor shortages and unpredictable tariffs can leave developers with signed power contracts unable to perform them at the electricity prices in such contracts.

Are you worried that generators who win 15-year PPAs with data centers will be unable to perform them by the time they are able to build their projects?

MS. STANCO: The debate about the auction will be very interesting. There is a mismatch between how the Trump administration and the governors of the PJM states described the program and what PJM put out and how the existing capacity auction works. There are lots of details to work out and lots of unanswered questions.

MR. MARTIN: Mike Catanzaro, do you have any views about the PJM effort? You are in the middle of the data center coalition.

MR. CATANZARO: Whitney is right. There are more questions than answers at this point. It is hard to say how this will affect independent generators or anybody else in PJM in the absence of details.

I am skeptical that PJM and the stakeholders can come together through the existing stakeholder process on a plan by the deadline the administration wants.

The Federal Energy Regulatory Commission may end up intervening to force PJM to do what the administration and governors of the PJM states want.

MR. MARTIN: JC Sandberg, what does the American Clean Power Association make of the effort?

MR. SANDBERG: Most of the constituent groups are keeping their powder dry until they see more details. I don't disagree with Mike Catanzaro that the PJM stakeholder process is cumbersome at best. There are also issues of states' rights and federal intervention.

MR. MARTIN: Whitney Stanco, you wrote recently that you think the odds of such an auction occurring this year are only 45%. Why so low?

MS. STANCO: I think we eventually have to have an emergency or backstop reliability auction. The PJM stakeholder process can be cumbersome. It is dominated by representatives of the utilities and independent generators and not by the governors. There are some ratepayer advocates, but they are in the minority.

That is the first step. Suppose an agreement is reached? Do you have to get it approved by FERC? If an agreement cannot be reached, can FERC impose a plan of its own?

Tariffs

MR. MARTIN: Let's move to tariff issues and bring John Smirnow into the discussion. The Commerce Department is expected to announce new tariffs on polysilicon imports and downstream products that contain polysilicon by March this year. What do you expect to happen?

MR. SMIRNOW: There are three key questions that the administration needs to answer before it can impose tariffs under section 232 on national security grounds.

One is whether polysilicon imports are a threat to America's national security. Since the administration initiated the investigation into polysilicon imports on its own, I assume Commerce will answer "yes" to that question.

Next, Commerce needs to define the scope of the investigation. It has been described as an investigation into polysilicon and polysilicon derivatives. What does that mean? Will any tariffs apply solely to polysilicon, or will they also apply down the supply chain to ingots, wafers, cells and modules. My expectation is that they will cover the entire supply chain and that we will see mainly a tariff-focused approach with some exceptions initially for things like semiconductor imports but expanding over time to cover everything.

If Commerce ends up restricting all polysilicon products with any links to China, then we are going to need German polysilicon and potentially even Malaysian polysilicon to satisfy the US market.

My expectation is tariffs across the supply chain, but maybe with a phase-in period. We have seen this administration threaten tariffs unless trading partners agree to concessions within 180 days.

This could be the most important trade issue for the solar industry's long-term success focused on moving manufacturing of solar equipment to the United States.

US trade policy so far has been reactive. For example, factories are built in Cambodia. The US imposes tariffs. The manufacturer moves the factory to Oman. The US imposes a tariff. That is reactive.

The administration could use section 232 to put tariffs in place across the entire supply chain and adjust them up or down. That would effectively block tariff shifting.

MR. MARTIN: What tariff rate do you expect and will the new tariffs apply to solar panels?

MR. SMIRNOW: I expect them to apply to solar panels. It is impossible to determine what rate Commerce will choose. That said, there will have to be a connection between the rate and the price advantage of using low-cost Chinese polysilicon.

MR. MARTIN: Anti-dumping and countervailing duties are also expected to be imposed on solar cells and modules imported from India, Indonesia and Laos. They were expected in December, but the government shutdown has delayed things. When are they now expected and at what rates?

MR. SMIRNOW: The first decision will be the preliminary countervailing duty rate. That is expected at the end of February. The rates will be high, especially when combined with the anti-dumping duty. The preliminary anti-dumping duty is expected at the end of April. I think the tariffs will be prohibitive.

Yesterday the petitioners filed a critical circumstances allegation. Thus, if tariffs are put in place, they could apply retroactively up to 90 days. We could already be in the tariff zone.

MR. MARTIN: So solar panels imported from India, Indonesia and Laos could face prohibitively high tariffs, and the tariff could apply retroactively to solar panels imported in the 90 days before the tariff rates are announced.

Will they apply to all imports reaching the US after an effective date, or is there an exception for shipments that are already in transit?

MR. SMIRNOW: Even shipments that are on the water could be subject to tariffs when they reach the US.

MR. MARTIN: There have been persistent rumors that tariffs will be imposed on solar cells and modules imported from the Middle East. For example, JA Solar is building a factory in Oman. What are you hearing?

MR. SMIRNOW: I don't expect tariffs on solar panel imports from the Middle East in the near term. Eighteen months to two years is the normal cycle for new countervailing duty cases. The Commerce Department has been working through the current round of countervailing duty cases. Once such tariffs are imposed, companies shift to other markets and then you usually see follow-on cases 18 to 24 months after that. The section 232 investigations could change that whole dynamic if tariffs are imposed on imports across the board, eliminating any benefit from shifting to another country.

MR. MARTIN: You were instrumental during the Biden administration in helping to put in place a two-year moratorium on collection of anti-circumvention duties on solar panels coming in through Vietnam, Malaysia, Thailand and Cambodia. The US Court of International Trade said last fall that the moratorium was illegal. The decision has been appealed. US Customs in the meantime is suggesting that no panels that came in during the moratorium qualified for the moratorium. When do you expect a decision?

MR. SMIRNOW: There are two questions. One is the moratorium and whether it will be overturned. The other is whether companies provided truthful and accurate information to US Customs.

Companies had to use or install the imported panels by a certain date to qualify for the moratorium. The importer of record had to assure Customs that they would be used by the deadline. Customs is finding that some companies are unable to prove use by the deadline, so a significant portion of the import community may have liability to Customs for misrepresentations.

These inquiries about potential misrepresentations will continue on a separate track regardless of what the US court of appeals and eventually the Supreme Court decide about the moratorium.

MR. MARTIN: Two more trade questions. One is Politico reported the president said on January 14 that he signed a presidential proclamation threatening tariffs on processed critical minerals imported into the US and on products that use them. What more can you tell us about that?

MR. SMIRNOW: The proclamation directs the US Trade Representative and the State Department to try to negotiate agreements to restrict imports of processed critical minerals while threatening tariffs if the agreements are not concluded within 180 days. The administration will try to negotiate agreements with friendly countries like Australia and Japan that I understand are already coming together. It has not said whether it will be looking for a longer-term agreement with China rather than the temporary kind of stand-down agreement that we have seen with China in the past.

The president will withhold judgment on the tariff rates for 180 days.

I think that is largely to get past the anticipated April summit between Presidents Trump and Xi in China. I think eventually we will see tariffs on critical minerals, but the rates and timing will be contingent on what comes out of the US-China negotiations.

MR. MARTIN: One more trade question. The press has reported that half the announced tariffs are not being collected in practice either because the administration is walking back tariffs on products that are not made in the United States or has granted special exceptions to individual companies or products. Are the tariffs more bark than bite for renewables?

MR. SMIRNOW: The tariffs are landing where the administration intended for them to land. Basically every country is subject to roughly a 10% to 20% tariff rate. I think that was the administration's intention from the very beginning.

The president's strategy is to threaten aggressive tariffs of 100% or 50%, but eventually land at a lower rate through negotiated settlements. That is what you are seeing happening now: harsh, shocking, surprising numbers, but as a negotiating strategy.

REINS and FEOC

MR. MARTIN: Shifting gears, Mike Catanzaro, some senior House Republicans are eager to pass a REINS Act that would bar any major rules by federal agencies from taking effect until a joint resolution approving the rules passes both houses of Congress and is signed by the president. Any rule that has an annual economic effect of at least $100 million is a major rule. Rep. Jim Jordan (R-Ohio) is strongly behind it. Do you see it getting any traction?

MR. CATANZARO: I am not sure. This bill goes way back to when I was working in the House of Representatives. It has been a hardy perennial among Republicans. There has been talk of attaching something like it to a second budget reconciliation bill.

It is not going to happen because of the Byrd rule in the Senate, which has a six-part test for knocking out extraneous material from reconciliation bills. This would clearly fail because any budgetary impact is merely incidental to the policy objective. I do not see Republicans overruling the parliamentarian on that or anything else.

MR. MARTIN: JC Sandberg, we are all waiting for FEOC guidance. "FEOC" stands for foreign entity of concern. FEOC is a set of restrictions that will make it hard to claim federal tax credits on US projects that use too much Chinese equipment or that have contracts with companies that are more than 50% Chinese-owned that give such contract counterparties effective control over key aspects of the projects.

When is guidance expected, and what are the one or two biggest concerns that the American Power Association has been pushing Treasury to address?

MR. SANDBERG: We have been told by Treasury to expect the guidance to come out in pieces. The first piece is expected imminently, but we have been warned by Treasury it may be underwhelming in scope.

One big issue is what any new safe-harbor tables will look like that developers and manufacturers can use to calculate the amount of Chinese equipment considered used in their projects. The statute suggests they can rely in the interim on tables that the Biden Treasury issued for calculating the domestic content of projects.

Another big issue is whether Treasury can figure out a way to apply the prohibition against project contracts with Chinese counterparties that have effective control language without drawing in every business agreement. We are trying to keep the focus on things that are material.

Midterm Elections

MR. MARTIN: Whitney Stanco, what happens if the Democrats take control of the House and perhaps also the Senate in the midterm elections? What, if anything, changes on the energy policy front?

MS. STANCO: They are more likely to take control of the House. If that happens, oversight will ramp up. The 2028 election season will start practically the day after the midterm election results are announced.

I think there will be a pathway for trying to advance the ball on small priorities for renewables by attaching them to must-pass legislation.

I am more optimistic about permitting reform in a divided government.

MR. MARTIN: JC Sandberg, if the Democrats gain control of the House, are we in for gridlock or will the two parties find they can work together?

MR. SANDBERG: I agree with Whitney. There are probably small things that can get done. It depends on what the Democrats, if they do in fact take the House, feel that they have to deliver based on campaign promises that we are going to hear over the next 10 months.

MR. MARTIN: Mike Catanzaro, is a Democratic takeover of the House a recipe for gridlock or a real opportunity?

MR. CATANZARO: I think gridlock. In the past, divided Congresses have passed meaningful bills, but things are very different today. Whitney is right. Just about all the time will be spent on oversight. That will greatly complicate the administration's agenda and affect the willingness of the administration to bargain.

MR. MARTIN: Do you think there is any possibility that the energy tax credits will be extended? They have been on and off the books since 1992. They expire periodically, and they get extended periodically.

MR. CATANZARO: It is a near certainty that if Democrats take back Congress, they will do everything in their power to restore the tax credits by adding them to must-pass vehicles like appropriations bills and end-of-year budget deals. The question is whether the administration will relent. Another question is how strongly the Democrats push if the administration says no.

There is 100% certainty that we will be dealing with this question, but whether there will be some kind of breakthrough, I don't know.

MR. MARTIN: We are only talking about tax credits for wind and solar since tax credits for other technologies remain on the books through 2033 at full rates and 2035 at reduced rates.

MS. STANCO: I think Mike phrased it right. If that is what Democrats really push for, they could probably get a short-term extension or maybe they line up behind relief on safe-harbor language for starting construction. It just depends on what they push. They will be able to get small things on must-pass bills if they control one or both chambers.

MR. MARTIN: JC Sandberg, do you think the American Clean Power Association will try to restore the solar and wind tax credits?

MR. SANDBERG: Mike used the term hardy perennial when talking earlier about the REINS Act. There are certain things that are perennials for Democrats, and this is one of them. The topic will certainly be discussed. I think we are going to be focused as much or more on the tax credits for domestic manufacturing that have broad bipartisan support.

MR. SMIRNOW: I agree with JC. There is a better chance of getting something that advances US manufacturing.

Other Initiatives

MR. MARTIN: Last question. It is hard to predict the future during the Trump era. There is so much happening all the time. Are there any other major energy policy initiatives that you think are in the works and that we will see later this year?

MS. STANCO: There will be a lot of kicking the tires on financing for new nuclear facilities in 2026. The Trump administration has made it clear through executive orders and other things that it is interested in advancing the AP 1000 advanced nuclear reactor design. That will be one of the priorities of the office of energy dominance financing, which is the new name for the DOE loan guarantee program.

These are huge capital-intensive projects that have a lot more construction risk than technology risk. A lot of attention will have to be paid to how to apportion the risks.

MR. MARTIN: Are there any other big initiatives anyone expects this year besides greater attention to nuclear?

MR. SMIRNOW: Some may think me naive to say this, but I think we could see, after the Trump-Xi summit, a better environment for Chinese manufacturing investments in the US. It is something that President Xi wants, and I think there is a deal to be made where, with reasonable guardrails, Chinese investments could lead, for example, to Ford being able to use CATL battery technology in the US. It is something I am looking for later in the year.