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 The OBBBA rescinded over $5 billion in unobligated IRA balances across multiple programs. It repealed the statutory authority for the EPA's Greenhouse Gas Reduction Fund entirely, striking it from the Clean Air Act.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) terminate for applicable wind and solar facilities placed in service after December 31, 2027 when construction began after July 4, 2026. IRS Form 7211 instructions describe the two routes: begin construction on or before July 4, 2026, or place the facility in service before 2028. The construction-start date has passed. Notice 2025-42 generally requires physical work of a significant nature to establish that construction began, with limited rules for certain low-output solar facilities. Project teams should preserve contemporaneous records and obtain tax advice rather than assume that preliminary planning, a contract, or spending established eligibility. The residential clean energy credit under Section 25D is different. IRS guidance says it is unavailable for expenditures made after December 31, 2025, and treats an expenditure as made when installation is completed. It does not follow the commercial 45Y/48E construction timeline.
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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. 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 under Section 25D ended for expenditures made after December 31, 2025. IRS guidance generally treats the expenditure as made when installation is completed, so paying before the deadline did not preserve the credit for an installation completed in 2026. The energy efficient home improvement credit under Section 25C also ended for property placed in service after December 31, 2025. Eligible 2025 improvements can still be claimed on a 2025 return. See our home repair and weatherization guide for programs that may still help. HOMES and HEAR rebates flow through state energy offices and do not share the federal tax-credit deadline. Availability and reservation status vary by state, so homeowners should verify the current state portal before planning a purchase. These rebates are not the same as Sections 25C or 25D.
What This Means for Project Planning
If you are planning an energy project, the timeline now matters more than the technology. For most wind and solar facilities, the construction-start deadline for Sections 45Y and 48E was July 4, 2026. That date has passed. IRS guidance also provides a separate path for qualifying facilities placed in service before 2028. Do not assume planning work or spending alone established construction: IRS Notice 2025-42 generally applies a physical-work test, with limited rules for certain low-output solar facilities. Confirm the project's facts with a qualified tax adviser before treating a credit as available. 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, verify the current DOE notice and submission status rather than relying on an older forecast. See our energy funding guide and critical minerals guide for current pathways.