The One Big Beautiful Bill Act (OBBBA) — signed into law on July 4, 2025 — extends or strengthens many business tax benefits. However, it also accelerates the phase-out of several clean energy tax incentives that businesses rely on.
In this article:
- Which clean energy incentives are being cut short
- What deadlines and eligibility rules you need to know
- Action steps your business should take right away
Key Clean Energy Tax Incentives Affected by OBBBA
Qualified Commercial Clean Vehicle Credit (Section 45W)
Originally set to expire in 2032, the Section 45W credit is now limited to vehicles acquired on or before September 30, 2025. After that date, new acquisitions will not qualify.
Deduction for Energy-Efficient Building Improvements — Section 179D
This deduction (often used by commercial building owners, tenants, REITs, government or nonprofit building designers) allows immediate expensing of qualifying energy upgrades instead of depreciating over 39 years.
Key changes under OBBBA:
- The deduction terminates for property beginning construction after June 30, 2026.
- Eligible parties include building owners, tenants, REITs, and designers (e.g. architects/engineers) for certain public or nonprofit buildings.
- Qualifying upgrades may include interior lighting, HVAC / hot water systems, or building envelope improvements.
- To qualify, the improvement must reduce annual energy and power usage by at least 25%, certified by an independent engineer or licensed contractor.
- Base deduction ranges from $0.50 to $1.00 per square foot (25%–50% energy savings).
- Bonus deductions (for compliance with prevailing wage/apprenticeship standards) can range from $2.50 to $5.00 per square foot.
Alternative Fuel Vehicle Refueling Property Credit (Section 30C)
OBBBA eliminates this credit for property placed in service after June 30, 2026. The credit is designed for EV charging stations or fuel dispensers/ storage for clean-burning fuels and can be as large as $100,000 per qualifying unit (charging port, dispenser, or storage facility).
Clean Electricity Investment & Production Credits (Sections 48E & 45Y)
Wind and solar projects must now begin construction on or before July 4, 2026 to qualify. Otherwise, the credits are eliminated for facilities placed in service after 2027.
Advanced Manufacturing Production Credit (Section 45X)
OBBBA imposes new limits on eligibility:
- Wind component manufacturing no longer qualifies after 2027.
- Changes include adding metallurgical coal (for steel production) to the list of critical minerals.
- For other critical materials, the credit phases out over 2031–2033.
- The credit for metallurgical coal expires after 2029.
Why These Changes Matter — And What You Should Do
The urgency
Many clean energy incentives are ending years earlier than originally planned. Delay may mean losing eligibility entirely. Unless your projects meet the new deadlines, you could miss out on substantial tax savings.
What your business should do now
- Inventory your planned clean energy projects — which ones may qualify and by when.
- Consult an energy tax specialist or CPA to verify eligibility and architect the project to meet deadlines.
- Act quickly — for vehicle acquisitions, building upgrades, energy projects, or clean fueling infrastructure.
- Document compliance — especially for energy savings, prevailing wage, and apprenticeship requirements.
- Stay informed — track IRS guidance and Treasury regulations, particularly for Sections 48E/45Y, 45X, 30C, and 179D.
Next Steps
The OBBBA clean energy tax incentives are undergoing dramatic changes — many beneficial now, but some with accelerated sunsets that demand prompt action. If your business is considering or already planning clean energy investments, the time to move is now.
Contact us today to:
- Evaluate your eligibility under the revised rules
- Structure and time projects to maximize available incentives
- Ensure full compliance with certification, wage, and apprenticeship criteria
Don’t wait until it’s too late — reach out now to capture what remains of these tax benefits.