The One, Big, Beautiful Bill Amends Renewable Energy Tax Credits – Summary of Key Changes
On July 4, 2025, President Trump signed H.R. 1 -- The One, Big, Beautiful Bill Act (the “Act”) into law. The Act makes significant changes to the clean energy tax credits previously available under the Inflation Reduction Act of 2022. The following is a high-level summary of the more significant changes.
Solar and Wind (Section 45Y and 48E technology-neutral credits):
The Act accelerates the phase-out of tax credits for wind and solar projects beginning construction after July 5, 2026 (within 12 months of enactment of the Act). These projects must be placed in service by the end of 2027 in order to claim the credit.
Solar and wind projects that begin construction before July 5, 2026 will not be subject to the accelerated placed-in-service deadline, although such projects should still be completed within four calendar years to satisfy the continuity safe harbor. However, projects beginning construction after December 31, 2025 will be subject to the Material Assistance restrictions for costs attributable to Prohibited Foreign Entities (as further discussed below).
Other Technologies (Sections 45Y and 48E technology-neutral credits):
For technologies other than solar and wind, the project must begin construction before 2033 to claim the full credit. The credit phases down in 2034 and 2035,and is eliminated in 2036.
Projects beginning construction after December 31, 2025 will be subject to the Material Assistance restrictions for costs attributable to Prohibited Foreign Entities.
Advanced Manufacturing Credit (Section 45X):
The Act ends the credit for wind energy components with reduced credits for such components sold after 2027.
The Act ends the credit for metallurgical coal produced after 2029.
The credit for other applicable minerals other than metallurgical coal is phased out. Production during 2031 receives 75% of the credit; 2032, 50%; 2033, 25% and no credit in 2034 or after.
The Material Assistance restrictions apply for taxable years beginning after July 4, 2025.
