A federal judge has struck down an Internal Revenue Service (IRS) rule that made it more difficult for wind and solar projects to qualify for federal tax credits, marking a setback for the Trump administration's renewable energy policies. In her ruling, Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia criticized the IRS for failing to adequately explain the removal of the 'Five Percent Safe Harbor' standard, which allowed developers to qualify for tax credits by demonstrating that they spent at least 5% of their project's total cost. The judge noted that this change could lead to reduced clean electricity generation capacity and increased electricity prices. The lawsuit was brought by a coalition including environmental organizations and the City and County of San Francisco, highlighting concerns over rising energy costs. This ruling comes as electricity demand in the U.S. is projected to increase significantly due to factors such as AI data centers and grid expansion, with utilities expected to invest over $1.4 trillion in infrastructure by 2030. Despite the challenges, renewable energy stocks have shown strong performance, reflecting ongoing investor interest in clean energy solutions.