July 17, 2025
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, makes major changes to federal clean energy tax policy. The law accelerates the expiration of more than a dozen energy-related tax credits, many of which were previously set to remain in effect through 2032. Several credits will now expire as early as September 2025. In other cases, new restrictions may limit who qualifies or how the credit can be used.
Many of these credits came out of the Inflation Reduction Act of 2022. They were designed to support long-term investment in areas like energy-efficient construction, electric vehicles, and renewable power. At the time, taxpayers were working with a ten-year planning window. OBBBA shortens that window and introduces additional limitations that will affect both individuals and businesses. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key changes below.
What Changed Under OBBBA
The One Big Beautiful Bill Act decreases the lifespan of many popular clean energy tax credits, and it extends the deadline for a few others, including:
Clean Transportation Incentives
These credits have helped to drive adoption of electric vehicles and the rollout of charging infrastructure. All are set to expire by the end of September 2025 or mid-2026.
- Section 30D — New Clean Vehicle Credit – This credit provides up to $7,500 for qualifying new electric or hydrogen fuel cell vehicles. To qualify, vehicles must meet requirements for final assembly in North America, battery sourcing, price caps, and income limits. Ends for vehicles acquired after September 30, 2025.
- Section 25E — Previously Owned Clean Vehicle Credit – This credit provides up to $4,000 or 30% of the vehicle’s purchase price, whichever is lower, for the purchase of a qualifying used electric or fuel cell vehicle. To be eligible, the vehicle must be at least two years old, sold by a licensed dealer, and priced below $25,000. Buyers must also meet certain AGI limits. Ends for vehicles purchased after September 30, 2025.
- Section 45W — Commercial Clean Vehicle Credit – This credit offers up to $7,500 for light-duty vehicles and up to $40,000 for heavy-duty vehicles used in a trade or business. Eligible vehicles must be electric, or fuel cell powered and meet weight, battery, and use requirements. The credit is available to both businesses and tax-exempt organizations. Ends for vehicles placed in service after September 30, 2025.
- Section 30C — Alternative Fuel Vehicle Refueling Property Credit – This credit covers 30% of the cost of installing electric vehicle charging stations or other alternative fuel refueling property, up to $1,000 per item for individuals and $100,000 per item for commercial installations. Equipment must be placed in a qualifying location. Ends for property placed in service after June 30, 2026.
Residential and Building Efficiency Credits
These incentives support home energy upgrades and commercial construction projects. Originally expected to last through 2032, several now face expiration by the end of 2025 or mid-2026.
- Section 25C — Energy-Efficient Home Improvement Credit – This credit allows homeowners to claim 30% of the cost of qualifying improvements, including heat pumps, insulation, exterior windows and doors, and energy audits, up to $3,200. Ends for improvements placed in service after December 31, 2025.
- Section 25D — Residential Clean Energy Credi- This credit covers 30% of the cost of qualifying residential clean energy systems, including solar panels, battery storage, geothermal heat pumps, and wind turbines. Ends for purchases made after December 31, 2025.
- Section 45L — New Energy-Efficient Home Credit – This credit provides up to $5,000 to eligible builders of new single-family or multifamily homes that meet advanced energy-efficiency and prevailing wage standards. Ends for homes completed after June 30, 2026.
- Section 179D — Energy-Efficient Commercial Buildings Deduction – This deduction allows building owners and designers to claim a tax deduction for qualifying energy-efficient construction or improvements to commercial buildings and certain multifamily properties. The deduction amount is based on energy savings and prevailing wage requirements, ranging from $2.90 to $5.81 per square foot in 2025. Ends for property where construction begins after June 30, 2026.
Clean Energy Generation and Storage
These credits support utility-scale energy production, including wind, solar, and hydrogen. While their deadlines are slightly farther out, they include new ownership restrictions and cost recovery changes.
- Sections 45Y and 48E — Clean Electricity Credits – These credits support utility-scale wind, solar, and other renewable energy projects. Section 45Y (PTC) offers a production-based credit, while Section 48E (ITC) provides an investment-based option. Both end for wind and solar facilities placed in service after December 31, 2027, and include restrictions for projects with foreign ownership or involvement.
- Section 45V — Clean Hydrogen Production Credit – This provides tiered incentives for hydrogen projects based on lifecycle emissions, with higher credits for cleaner production. Ends for facilities that begin construction after January 1, 2028.
Credits New Restrictions
Some credits were not eliminated under OBBBA but have new rules around foreign ownership, sourcing, and eligibility.
- Section 45U — Nuclear Power Production Credit – This credit is still available but now excludes facilities that use imported nuclear fuel or are owned or controlled by foreign entities. It is currently scheduled to end on January 1, 2033.
- Section 45Z — Clean Fuel Production Credit – This credit supports clean fuel production but is limited to feedstocks sourced from the U.S., Mexico, or Canada. Projects with certain foreign ownership or leasing structures may no longer qualify. Extended to December 31, 2029, from an earlier date in 2027.
- Section 45X — Advanced Manufacturing Production Credit – This credit continues for domestic production of clean energy components (mostly wind and solar) but excludes projects involving foreign entities. It begins phasing out after 2027 for wind components and after 2030 for critical minerals.
Strategic Planning Considerations
With several clean energy credits phasing out earlier than expected, it’s important to watch project timelines. Some incentives are based on when construction begins; others apply only if the property is placed in service before the deadline. It’s not always clear at first glance, so checking those details and keeping accurate records can make a difference.
It’s also helpful to take a second look at suppliers and ownership. Certain rules now limit eligibility for projects with imported materials or foreign involvement. Solar upgrades, in particular, could be affected by tariffs and supply chain delays. Reviewing these factors early can help capture available tax savings.
Conclusion
Under OBBBA, clean energy incentives have changed. Whether upgrading a home, expanding a fleet, or building renewable infrastructure, now is the time to assess plans against the new timelines and consult with an experienced tax professional. If you have questions about the information outlined above, or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.
