OBBBA – Energy Key Provisions
Energy incentives are getting a major shake-up under the One Big Beautiful Bill Act (#OBBBA). Signed into law on July 4, 2025, this sweeping legislation doesn’t just reshape federal taxes, it also resets the timeline for many clean energy credits and deductions that businesses and homeowners have relied on for years. From the popular Clean Vehicle and Residential Energy Credits to the Commercial Building Deduction, several programs are ending sooner than expected, while others like the New Markets Tax Credit get a new lease on life. Whether you’re planning an energy-efficient upgrade or investing in clean technology, here’s what’s changing and what it could mean for your next project.
| Tax Provision | Pre-OBBBA | Enacted OBBBA |
| Sec. 179D, Energy efficient commercial buildings deduction | Deduction based on the cost of energy efficient commercial building property, up to a maximum amount per square foot (ranging from $.50 to $5.00 per square foot). | Terminates deduction for property that begins construction after June 30, 2026 |
| Sec. 25C, Energy Efficient Home Improvement Credit. | 30% of qualified costs, $1,200 annual limit, expires 2032. | Terminates for property placed in service after Dec. 31, 2025. |
| Sec. 25D, Residential Clean Energy Credit | 30% of qualified costs, phases down after 2032, expires 2034. | Terminates for property placed in service after Dec. 31, 2025. |
| Sec. 25E, Previously Owned Clean Vehicle Credit | Up to $4,000, expires 2032. | Terminates for expenditures made after Sept. 30, 2025. |
| Sec. 30C, Alternative Fuel Refueling Property Credit | 30% of cost, up to $100,000, expires 2032. | Terminates for property acquired after June 30, 2026. |
| Sec. 30D, Clean Vehicle Credit | Up to $7,500 per new clean vehicle, expires 2032. | Terminates for vehicles acquired after Sept. 30, 2025. |
| Sec. 45D, New Markets Tax Credits | New Markets Tax Credits (NMTC) are competitively awarded tax credits intended to encourage private investment in certain low-income communities designated by the Community Development Financial Institutions (CDFI) Fund. The NMTC program is set to expire at the end of 2025. | Permanently extends the NMTC program. |
| Sec.45L, New Energy Efficient Home Credit | Up to $5,000 per home, expires 2032. | Terminates for homes acquired after June 30, 2026. |
| Sec. 45W, Commercial Clean Vehicle Credit | Up to $40,000, expires 2032. | Terminates for vehicles acquired after Sept. 30, 2025. |
| Sec. 45Y, Clean Electricity Production Credit | No expiration, based on beginning of construction. | Terminates for wind and solar facilities PIS after 12/31/27 and all other facilities after 2032. New foreign entity restrictions. |
| Sec. 48E, Clean Electricity Investment Credit | No expiration, based on beginning of construction. | Terminates for wind and solar facilities PIS after 2027 and all other facilities after 2032. New foreign entity restrictions. |
As the One Big Beautiful Bill Act (#OBBBA) unfolds, its provisions on clean energy incentives, fossil-fuel leasing, and critical minerals tax credits will significantly reshape the energy and tax landscape. While it scales back some clean-energy benefits such as credit phase-outs and tighter timelines for wind and solar projects, it also opens doors for fossil-fuel investment and advanced carbon-capture technology. Understanding these shifts isn’t just for policymakers; businesses, investors, and households must adapt their tax strategies accordingly. Staying informed and proactive will ensure you capitalize on new opportunities and avoid costly oversights under the evolving OBBBA framework.
Disclosure: This material has been prepared for informational purposes only. It is not intended as a substitute for personalized professional advice. You should consult your own tax advisors or contact us if you need help with implementing any ideas shared on this page.
