The One Big Beautiful Bill Act Puts Wind and Solar on a Two-Year Clock

On July 4, 2025, President Trump signed H.R. 1, the One Big Beautiful Bill Act, into law. Passed through budget reconciliation, the law extends the 2017 tax cuts and pays for part of the cost by cutting back the clean energy tax credits created by the Inflation Reduction Act. The changes for wind and solar are the most severe. Under the new law, as summarized by Nixon Peabody, wind and solar projects can claim the technology-neutral production credit under section 45Y or the investment credit under section 48E only if they begin construction by July 4, 2026, or are placed in service by December 31, 2027.

Projects that miss both deadlines get nothing. Under prior law, the credits would not have begun to phase down until 2032 at the earliest. Three days later, on July 7, the president issued an executive order directing the Treasury Secretary to strictly enforce the termination of the credits for wind and solar, including by issuing new guidance on what counts as beginning construction. Beyond the wind and solar deadlines, the law adds extensive restrictions on foreign entities of concern, aimed mainly at China.

The immediate effect will be a race to begin construction before July 4, 2026. The president's order creates uncertainty about whether Treasury will tighten those tests. Wind and solar, together with storage, have made up the large majority of new US generating capacity in recent years. Removing credits for wind and solar raises the price developers need to charge for their power substantially, since the investment credit alone has typically been worth 30 percent or more of eligible project costs.

Corporate buyers that have relied on wind and solar power purchase agreements should expect higher prices for contracts signed after mid-2026 and should consider securing projects that are already safe harbored. For storage developers and manufacturers, the material assistance rules are the main challenge. The One Big Beautiful Bill Act is the biggest change to US clean energy policy since the Inflation Reduction Act itself.