The clean energy tax landscape just shifted dramatically. President Trump and the GOP have successfully rolled back many of the Inflation Reduction Act's (IRA) clean energy incentives through the One, Big, Beautiful Bill Act (OBBBA). If your business or personal finances have been benefiting from these credits, it's time to act fast.
The OBBBA doesn't just trim around the edges—it eliminates or significantly shortens the lifespan of major clean energy tax incentives that were supposed to last well into the 2030s. Some credits now expire as early as September 2025, giving taxpayers a narrow window to capitalize on these opportunities.
Here's what's changing, when these changes take effect, and how you can still maximize your tax savings before these incentives disappear.
Individual Clean Energy Credits Face Early Expiration
Energy Efficient Home Improvement Credit Gets Shortened Timeline
The Energy Efficient Home Improvement Credit (Section 25C) was originally set to run through 2032. Under the OBBBA, this credit now expires on December 31, 2025. This credit offers 30% back on qualifying energy-efficient improvements, including exterior windows, skylights, doors, and home energy audits.
If you've been considering upgrading your home's energy efficiency, you have less than a year to take advantage of this substantial credit. The clock is ticking on improvements that could save you thousands in taxes while reducing your energy bills.
Residential Clean Energy Credit Timeline Accelerated
Similarly, the Residential Clean Energy Credit (Section 25D) saw its sunset date moved up from 2034 to December 31, 2025. This credit provides a 30% tax credit for installing solar panels, wind systems, geothermal heat pumps, or biomass energy equipment.
For homeowners who've been on the fence about solar installation or other renewable energy systems, this shortened timeline creates urgency. The potential savings are significant—a $30,000 solar system could generate a $9,000 tax credit, but only if you complete the installation by the end of 2025.
Business Clean Energy Incentives Take Major Hits
Alternative Fuel Infrastructure Credit Curtailed
The Alternative Fuel Vehicle Refueling Property Credit (Section 30C) received a significant timeline reduction. Originally scheduled to expire in 2032, qualifying property must now be placed in service by June 30, 2026.
This credit offers up to $100,000 per charging port, fuel dispenser, or storage unit for clean-burning fuel infrastructure. For businesses planning to install EV charging stations or alternative fuel dispensing equipment, the window is closing rapidly.
Commercial Building Efficiency Deduction Faces Cutoff
The Section 179D Energy Efficient Commercial Buildings Deduction will be eliminated for buildings where construction begins after June 30, 2026. This deduction has been substantially enhanced since 2006, particularly through IRA improvements that expanded eligible taxpayers and increased deduction amounts.
Commercial property owners and developers need to evaluate their construction timelines carefully. Projects that miss this deadline will lose access to potentially substantial tax deductions.
Wind and Solar Projects Hit Hard
Wind and solar projects face some of the most dramatic changes under the OBBBA. The Clean Electricity Investment Credit (Section 48E) and Clean Electricity Production Credit (Section 45Y) will be eliminated for facilities placed in service after 2027, unless construction begins on or before July 4, 2026.
Projects that begin construction after July 4, 2026, face an even tighter deadline—they must be placed in service by the end of 2027. This compressed timeline will likely accelerate project development schedules and could impact project feasibility for some developers.
The Advanced Manufacturing Production Credit (Section 45X) also faces modifications. Wind energy components won't qualify after 2027, and credits for other critical materials will phase out between 2031 and 2033. Interestingly, the law adds "metallurgical coal" suitable for steel production to the list of critical minerals, with credits for this material expiring after 2029.
Clean Vehicle Credits See Dramatic Reduction
Electric Vehicle Purchase Window Narrows
The Clean Vehicle Credit (Section 30D) timeline has been slashed from 2032 to September 30, 2025. This credit provides up to $7,500 for new clean vehicles that meet critical mineral and battery component sourcing requirements, or $3,750 for vehicles meeting only one requirement.
The used clean vehicle credit (Section 25E) also expires on September 30, 2025. This credit offers the lesser of $4,000 or 30% of the purchase price for eligible used clean vehicles bought from dealers.
For consumers considering electric vehicle purchases, the math is simple: buy before October 2025 or lose access to thousands in potential tax savings.
Commercial Clean Vehicle Incentives Shortened
The Qualified Commercial Clean Vehicle Credit (Section 45W) faces a similar timeline compression, with availability ending on September 30, 2025, instead of 2032. Depending on vehicle weight, this credit offers up to $7,500 or $40,000 per vehicle.
Businesses planning fleet electrification need to accelerate their timelines significantly to capture these incentives.
Additional Restrictions and Requirements
Beyond timeline compressions, the OBBBA imposes new limitations on remaining clean energy credits. Projects involving "foreign entities of concern" face restricted access to credits, and domestic content requirements have been strengthened.
These changes add complexity to project planning and may affect the economics of certain clean energy investments. Careful analysis of supply chains and partnership structures will be essential for maximizing available incentives.
The law does preserve the ability to transfer clean energy credits while they remain available, though restrictions apply to transfers involving specified foreign entities.
Strategic Planning for the New Reality
The OBBBA represents a fundamental shift in federal clean energy policy. The accelerated expiration dates create both urgency and opportunity for taxpayers who act quickly.
For individuals, the priority should be evaluating home energy improvements and vehicle purchases that were already under consideration. The shortened timelines mean decisions that might have been made over several years now need to happen within months.
Business taxpayers face more complex decisions. Project timelines, financing arrangements, and supply chain considerations all need reassessment in light of these changes. The compressed windows for construction starts and service dates will likely create bottlenecks in the clean energy development pipeline.
Tax planning strategies should focus on accelerating qualifying activities where possible and ensuring compliance with evolving domestic content and foreign entity restrictions. The stakes are higher now—missing deadlines means losing access to substantial tax benefits entirely.
Our team can help you navigate these changes, evaluate your options, and develop strategies to maximize your remaining opportunities under these compressed timelines. Don't let these valuable tax incentives slip away—the window for action is closing fast.
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DISCLAIMER:
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. The services of an appropriate professional should be sought regarding your individual situation.
HYPOTHETICAL DISCLOSURE:
The examples given are hypothetical and for illustrative purposes only.
