What the One Big Beautiful Bill Act Changed
The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, is the largest rollback of clean energy policy since the IRA was enacted in August 2022. It did not repeal the IRA wholesale, but it eliminated, accelerated, or restricted the most prominent provisions. The OBBBA rescinded over $5 billion in unobligated IRA balances across multiple programs. It repealed the statutory authority for the EPA's Greenhouse Gas Reduction Fund entirely, striking it from the Clean Air Act. It terminated or accelerated phase-outs on the clean energy tax credits that drove the majority of IRA-related investment. The Rhodium Group estimates that the combined effects of OBBBA rescissions, credit phase-outs, and policy uncertainty put over $522 billion in announced clean energy investments at risk. New clean power capacity is projected to decline 53 to 59 percent through 2035 compared to pre-OBBBA projections. Not everything was cut. Several IRA provisions survived intact or were enhanced. Understanding which credits are alive, which are dead, and which have accelerated deadlines is essential for anyone planning energy projects or investments.
Solar and Wind: The July 4, 2026 Cliff
The clean electricity production tax credit (Section 45Y) and clean electricity investment tax credit (Section 48E) are eliminated for solar and wind projects that begin construction on or after July 4, 2026 and are placed in service after December 31, 2027. This creates a hard deadline. Any solar or wind project that has not begun construction by July 4, 2026 loses access to both credits. Projects with construction started before that date still qualify even if placed in service through 2030 under standard IRS continuity rules (the "begin construction" safe harbor). The practical impact is a rush of safe-harboring activity. Developers are accelerating equipment purchases, breaking ground, and executing contracts to establish construction-start dates before the cliff. For project financiers, the pipeline of projects needing to close before July 2026 is creating compression in the tax equity market. The residential clean energy credit (Section 25D) for rooftop solar follows the same phase-out timeline as Sections 45Y/48E. Homeowners who install solar after the effective dates face reduced or eliminated credits. For anyone considering a solar or wind investment, the timeline is straightforward: construction must begin before July 4, 2026 to access credits.
🔍 Search related opportunities now
What Survived: Credits Still Available
Several clean energy tax credits survived the OBBBA, some without changes. Geothermal, fuel cells, combined heat and power, biogas, waste energy recovery, thermal energy, and battery storage projects remain eligible for 45Y/48E credits through a graduated phase-down. The credit is 100 percent for projects beginning construction through December 31, 2033, then 75 percent through 2034, 50 percent through 2035, and zero from 2036. This is a significantly longer runway than solar and wind. Section 45Q, the carbon capture and sequestration credit, was enhanced by the OBBBA. Credit values were increased for carbon utilization and enhanced oil recovery. Parity was established across all carbon end uses. Section 45Q remains eligible for direct pay under Section 6417. This is one of the few credits that came out ahead. Section 45X, the Advanced Manufacturing Production Credit, continues with tightening domestic content requirements. A 65 percent domestic content threshold applies after December 31, 2026. Prohibited Foreign Entity restrictions took effect July 4, 2025, with foreign entity thresholds tightening annually: 40 percent in 2026, 45 percent in 2027, 50 percent in 2028, 55 percent in 2029, and 60 percent from 2030. This credit applies to domestic production of solar cells, wind components, battery cells, critical minerals, and other clean energy components. Section 45Z, the Clean Fuel Production Credit, survived. Section 25C, the home energy efficiency improvement credit for insulation, windows, heat pumps, and other upgrades, survives with some new restrictions. This allows homeowners to claim credits on efficiency improvements that do not involve solar or wind. Credit transferability under Section 6418 survived. This was a major question during the legislative process. Credits can still be bought and sold, which preserves the tax equity market structure that many clean energy projects depend on.
What Was Repealed or Rescinded
The OBBBA went beyond tax credit changes. It rescinded funding and repealed program authority for several IRA spending programs. The EPA Greenhouse Gas Reduction Fund ($27 billion) had its statutory authority repealed from the Clean Air Act. Three grantees selected in 2024 received only a fraction of their awards before the freeze and repeal. Approximately $20 billion remains frozen. The D.C. Circuit Court of Appeals will hear the case en banc on February 24, 2026. Climate Pollution Reduction Grants (unobligated balances rescinded). Phase 2 implementation grants that were already obligated may survive. All funds must be used by September 30, 2026. Environmental Justice Block Grants (unobligated balances rescinded). Transmission Siting and Economic Development grants ($760 million, rescinded). Advanced Industrial Facilities Deployment program (rescinded). State-Based Home Energy Efficiency Contractor Training Grants (rescinded). Neighborhood Access and Equity Grants through DOT (rescinded). Methane Emissions Reduction Program (unobligated funds rescinded). The Waste Emissions Charge was postponed to 2034. The clean hydrogen production tax credit (Section 45V) was terminated for facilities beginning construction after December 31, 2027. The Tribal Energy Loan Guarantee program had its unobligated funds rescinded. Interregional and offshore wind transmission planning funds were rescinded.
The Clean Hydrogen Question
The Section 45V clean hydrogen production credit has a separate and later deadline than solar and wind. It terminates for facilities beginning construction after December 31, 2027, giving hydrogen projects roughly 18 more months than solar and wind. However, the broader hydrogen picture is uncertain. Two of the seven Regional Clean Hydrogen Hubs selected under IIJA have been terminated: the Pacific Northwest Hub ($1 billion) and ARCHES in California ($1.2 billion). Both are appealing. The remaining five hubs are under review for reduction or elimination. The $1 billion Clean Hydrogen Electrolysis program continues. The DOE goal of reaching below $2 per kilogram remains. But without hub infrastructure and with the 45V credit expiring in 2027, the economics of new hydrogen projects are being reevaluated. Organizations planning hydrogen projects should evaluate whether they can begin construction before the December 2027 deadline and whether their projects are viable without hub partnership assumptions.
Home Energy Credits: What Homeowners Need to Know
The IRA created two primary consumer incentive programs for home energy: tax credits and rebates. The residential clean energy credit (Section 25D) for rooftop solar and residential wind is subject to the same phase-out as commercial solar and wind under Sections 45Y/48E. Homeowners considering solar should be aware of the construction-start deadline. The energy efficient home improvement credit (Section 25C) for heat pumps, insulation, windows, water heaters, and electrical panel upgrades survives with some new restrictions. This allows up to $3,200 per year in credits for qualifying improvements. IRA home rebate programs (HOMES and HEAR) that flow through state energy offices are still rolling out. The HOMES program offers up to $8,000 for whole-home retrofits achieving 35 percent or more energy savings. The HEAR program offers up to $14,000 per household for heat pumps, electric stoves, panel upgrades, insulation, and wiring. These are grants, not tax credits, and their availability depends on your state's rollout status. California's HEAR program is fully reserved in some regions. Colorado, Wisconsin, and several other states have launched. Others are still pending DOE approval. The state-based home energy efficiency contractor training grants that would have supported the workforce needed to install these upgrades were rescinded by OBBBA. This may slow state program rollout in areas with contractor shortages.
What This Means for Project Planning
If you are planning an energy project, the timeline now matters more than the technology. Solar and wind projects must begin construction before July 4, 2026 to access tax credits. This is approximately 4.5 months away. If you are not already in motion, the window is closing. Hydrogen production facilities have until December 31, 2027 to begin construction for the 45V credit, but should evaluate viability given hub cancellations and market uncertainty. Geothermal, battery storage, fuel cells, biogas, and waste energy projects have until 2033 at full credit value, with gradual phase-down through 2035. These technologies have the most comfortable planning horizon. Carbon capture projects benefit from enhanced 45Q credits with no imminent sunset. This is the most favorable policy environment for CCUS in U.S. history. Manufacturing projects can still access 45X credits but must plan for tightening domestic content and foreign entity restrictions that escalate annually through 2030. DOE loans through the Office of Energy Dominance Financing remain available with over $400 billion in authority, and the scope has expanded to include fossil fuel and nuclear projects alongside clean energy. Key authority under Section 1703 (IRA additional) expires September 30, 2026. See our energy funding guide for details. For grant-funded projects, the IIJA authorization expires September 2026 for most DOE programs. GRIP Round 3 grid grants ($2.9 billion) expected in spring 2026 will likely be the last major round. See our energy funding guide and critical minerals guide for open opportunities.