The Impact of the One Big Beautiful Bill Act on Green Energy

The passage of the One Big Beautiful Bill Act (OBBBA) earlier this month marks a significant shift in the federal government’s approach to clean energy investment. The OBBBA changes many of the long-term incentives introduced by the Inflation Reduction Act (IRA), reshaping the roadmap for solar, wind, and energy-efficient building projects. Three areas stand out for their accelerated timelines and planning implications: renewable energy tax credits (Internal Revenue Code sections 45 and 48), the Section 179D deduction for energy-efficient commercial buildings, and the Section 45L credit for new energy-efficient homes.

The Production Tax Credit (PTC) under Section 45 and the Investment Tax Credit (ITC) under Section 48 have been central to utility-scale and commercial renewable energy deployment for over two decades. Under the IRA, these credits were restructured into the more flexible and tech-neutral 45Y/48E regime, set to last until at least 2032. OBBBA abruptly reverses course.

Now, wind and solar projects must begin construction by July 4, 2026, or, if not, be placed in service by December 31, 2027, to qualify for either PTC or ITC benefits. These new deadlines compress development timelines and raise risks for projects previously expected to benefit from long lead times. Additionally, strict compliance with labor standards (prevailing wage and apprenticeship) and foreign entity ownership rules (FEOC restrictions) remains in place, complicating project qualification.

The 179D deduction for energy-efficient commercial buildings survives OBBBA, but new timelines could impact existing and future projects.

Qualifying building owners and designers (including architects and engineers working on government-owned or not-for-profit-owned projects) can still deduct up to $5.81 per square foot (indexed for inflation) for eligible energy savings in lighting, HVAC, and building envelope systems for the 2025 tax year. However, the bill eliminates the deduction for projects that begin construction after June 30, 2026. Property owners and developers will have to carefully consider the timing of eligible projects to determine whether they qualify for this incentive.

Similarly, the 45L credit, which offers up to $5,000 per dwelling unit for energy-efficient home construction, faces a June 30, 2026, sunset. Under OBBBA, builders and developers will no longer be able to claim the credit for eligible homes acquired after June 30, 2026. Developers must act swiftly to complete qualifying construction before the 2026 deadline to claim the benefit.

The clean energy landscape may be shifting, but opportunities remain for those who act decisively.

At CSH, we help businesses, developers, architects, and contractors maximize tax incentives through customized strategies for Section 179D, 45L, Section 48, cost segregation, and more. Our experienced team stays ahead of evolving legislation to ensure clients capture every available benefit while maintaining compliance.