Electricity demand may help solar developers weather OBBBA disruptions

Even before President Donald Trump signed the One Big Beautiful Bill Act (OBBBA), renewables developers were scrambling to calculate its effects on their portfolios of existing projects and future pipelines.

Brian Grenko, president of California-based VDE Americas, a technical services firm for the utility-scale solar and energy storage sector, told pv magazine USA that the new law has not only introduced uncertainties about project completion, it creates issues of construction and equipment quality from rushing to meet deadlines.

In an interview, Grenko also expressed some optimism that solar’s competitive costs and deployment schedules will remain attractive going forward. Energy demand is growing and solar will have a place. The interview has been edited and condensed.

pv magazine: One of the things that’s interesting about the OBBBA is you’ve got until July 4, 2026, to start a project, and then four years after that to finish it and still be good on the existing economics. But that sort of runs up against some things that we’re seeing, particularly at the utility scale, of grid interconnection queues. Does that create more anxiety?

Brian Grenko: There are some provisions in the OBBBA and Treasury guidance that if you do have delays, even interconnection delays, and can start construction on time that four-year period could be extended. But nobody really wants to deal with that because there’s a world of pain associated with all the paperwork that you that you have to be prepared to present to the U.S. government to justify any delays.

So, for sure, if you don’t have a commitment that your project is in the queue but you’ve got a line of sight on an interconnection agreement based on a system impact study being submitted to the utility and whatnot then great.

What we’re seeing that’s interesting is there’s a lot of smaller developers that have a bunch of these projects that are not going to get to start a construction before Independence Day next year. So, for those projects you have to wait it out. Because if you take a step back, the broader picture is energy demand is increasing and there’s a limited supply. Even with a 30% upcharge if the project is not eligible for the tax credit, solar is still going to be faster to deploy, it’ll still be cheaper than gas in lot of places in the U.S., and where it’s not, it will be right there competitive.

pv magazine: You point out that the demand is there, particularly if you’re looking at certain industries, like data centers. And a lot of those energy consumers want renewable energy. They want solar if they can get the battery backup for reliable operations. I’m wondering whether the demand creates opportunities that are independent of the 30% tax benefit. Maybe in how deals are structured with dedicated off-takers?

Brian Grenko: I think it does. I mean, we’re like one step removed from the types of partnerships that our clients, the developers, are striking with off-takers. But I think we’re going to see more of these deals with solar developers. You are also seeing the same off-takers agreement with other providers, like nuclear, geothermal or hydrogen companies. But there’s a lot of question marks around how long it’s going to take to bring those technologies to market in a realistic and cost-effective way.

In the short term, solar has a lot of advantages. It’s reliable. You have a good idea of what solar production will be for a site. Yes, it comes with some uncertainty, but it’s a pretty safe investment. And it’s not subject to market pricing in the way that, say, natural gas is.

pv magazine: That’s on a level playing field, which the OBBBA professes to create. Yet that latest executive order from President Trump threatens to put additional burdens on renewables.

Brian Grenko: We’re in a period where I’ve been trying to reconcile the administration’s stated policy goals with its actions. Trump came out with an executive order called Unleashing American Energy that talked about how overregulation has prevented America from realizing its energy potential. And that it should be the policy of the United States to explore all energy potential on federal lands and the like. I was thinking, hey, that sounds great for solar.

And then here we are after the OBBBA with another executive order trying to constrict and over regulate solar. So, in this age where energy prices are going up and you say you want an all-of-the-above approach towards satisfying that demand and staying on top of the AI race, it’s just peculiar to try to like reconcile that with order. Solar has become politicized. It seems like a lost opportunity. History will reflect on how that shakes out.

pv magazine: Looking at risk for your utility-scale clients, do you have any thoughts about the size of projects going forward? Are there less risky project sizes that your clients might be interested in that would still meet the various deadlines as they currently exist?

Brian Grenko: That’s a great question. One of the business models we work on, that I really like, involves portfolios of smaller projects that are definitely less than 20 MW, usually in the range of like 2-5 MW. Oftentimes we see such projects on a portion of a farmer’s field that’s fallow. A developer comes in and leases the land for a period of 20-to-40 years, equal to the lifetime of the project. And that revenue stream from the farmer is oftentimes better than the yield that they would get from crops, especially if it was like non-usable land for a period of time. And what I really like about these projects is that they’re typically feeding into the local grid at medium voltage interconnection.

I really like the business model where you do it through these small projects. And, you know, obviously there’s economies of scale and building utility scale solar. But the thing is, you’re displacing retail power and contributing to local grid, the economics are just different. And I would love to see, and I think I’m hopeful that will see, more and more of those types of projects.

pv magazine: How do you see the OBBBA affecting how owners assemble portfolios? Does it make existing projects more valuable as an asset class? Are there opportunities for certain developers to come in and take over projects under development that might not otherwise meet the deadline?

Grenko: There’s absolutely people that have that baseline capacity or they have the financial means to out and make those things happen. To me it almost feels like large asset owners are like sharks smelling blood in the water. They see this as an opportunity to snap up more assets because they know that energy prices are going to increase. You have folks that have the financial wherewithal and a long-term view to pick up projects.

The industry is very active now with developers that realize that they’re not going to be able to build out projects that they were expecting to with the IRA [Inflation Reduction Act]. They’re seeing an opportunity as well. I think we’re going to see more and more of those transactions in the months to come.

I think from our vantage point as a technical services provider we’re out there identifying and mitigating risk. A big part of the scope of our work is construction monitoring, we’ve seen an uptick in people asking us about start-of-construction services. At VDE Americas we’re really concerned about clients rushing to construction to beat a deadline, and what the ramifications of building quickly might be from a quality standpoint.

We’ve actually been here before. There was a time before the IRA when we all thought that the tax credits were going to go away, and we saw a similar rush to construction. We saw an increase in workmanship defects from construction, and we also saw an increase in equipment defects. I expect something along the same lines to happen.

We’ve been ramping up our forensic investigations group within VDE in order to work on a number of issues we saw from the last time we went through this. So, I’m very curious and interested to see how things play out with OBBBA deadlines.

Brian Grenko, president and chief executive officer, VDE Americas.

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