A rollback on a deadline

The 2022 Inflation Reduction Act was, in tax terms, the largest federal climate program the United States has ever enacted. It worked almost entirely through the tax code: instead of direct spending, it created or extended a set of credits that lowered the after-tax cost of building clean generation, buying an electric vehicle, or installing rooftop solar.

The One Big Beautiful Bill Act, signed July 4, 2025, did not abolish that structure all at once. It did something more consequential for anyone trying to plan around it: it set a series of expiration dates, and made several of them imminent.

What the IRA credits did

The IRA’s clean-energy provisions fell into three rough groups.

• Consumer credits. The new and used electric-vehicle credits (Internal Revenue Code Sections 30D and 25E) were worth up to $7,500 and $4,000. The residential clean-energy credit (Section 25D) covered 30% of the cost of rooftop solar, batteries, and similar home installations, with no dollar cap. A separate home energy-efficiency credit (Section 25C) covered insulation, heat pumps, and efficient windows.
• Business power-generation credits. The IRA replaced the old wind and solar credits with “technology-neutral” successors — the clean-electricity production credit (Section 45Y) and investment credit (Section 48E). These rewarded any low-emission generation, not just wind and solar, and were designed to phase down only once the US power sector’s emissions fell roughly 75% below 2022 levels — a trigger that would not arrive before 2034. (Moss Adams)
• Other credits. Clean-hydrogen production, commercial EVs (Section 45W), and a deduction for efficient commercial buildings (Section 179D), among others.

The defining feature of the IRA design was duration. A roughly decade-long runway is what let developers, manufacturers, and homeowners treat the credits as a stable planning assumption rather than a gamble.

What OBBBA changed, and when

OBBBA kept the credits’ basic mechanics but moved the end dates forward — in several cases by years. (Tax Foundation)

• Electric-vehicle credits — already gone. The new, used, and commercial EV credits (Sections 30D, 25E, 45W) terminated for vehicles acquired after September 30, 2025. (Plante Moran)
• Residential credits — ending this year. The residential clean-energy credit (Section 25D) and the home energy-efficiency credit (Section 25C) apply to no expenditures made after December 31, 2025. A homeowner installing rooftop solar in 2026 gets nothing from a credit that was scheduled to run through 2034. (Holland & Knight)
• Wind and solar generation — a 2026 cliff. This is the structurally important change. A new wind or solar project keeps the 45Y and 48E credits if it begins construction on or before July 4, 2026 — in which case it still has the normal multi-year window to be finished (generally about four years, so placed in service by roughly 2029–2030). A project that begins construction after July 4, 2026 qualifies only if it is placed in service by December 31, 2027. For wind and solar still in permitting, interconnection queues, or financing as of mid-2026, that turns a runway once scheduled to last into the 2030s into a hard near-term deadline. (Carr, Riggs & Ingram)
• Other credits. The commercial-buildings deduction (179D) and EV-charging credit (30C) end after June 30, 2026; the clean-hydrogen credit ends after 2027.

What the July 4, 2026 cutoff actually means

“Begin construction” is a term of art, and OBBBA made it harder to satisfy. A July 2025 Trump executive order directed Treasury to tighten the rules; the resulting IRS Notice 2025-42 (August 15, 2025) eliminated the long-standing “5% safe harbor” — under which a developer could lock in eligibility by spending 5% of a project’s cost — for all but small solar installations. For everything else, only the physical work test counts: real, significant on-site or off-site construction work. (McGuireWoods)

The practical effect is a sorting of the project pipeline. A wind or solar project that has broken ground — poured foundations, begun off-site manufacture of transformers — is, for credit purposes, on one side of the line. A project still in permitting, interconnection queues, or financing is on the other, and is now racing a hard date it may not be able to control. Because interconnection alone can take years (see our brief on the transmission bottleneck), the cutoff effectively penalizes projects held up by the grid rather than by the developer.

What survived

OBBBA did not repeal the technology-neutral credits outright. Geothermal, nuclear, hydroelectric, and battery-storage projects remain eligible for the 45Y and 48E credits — these technologies keep the longer runway, with full value generally available for projects that begin construction through 2033 and a phase-down after. (Smith and Howard) The repeal was aimed squarely at consumer credits and at wind and solar; the rest of the structure narrowed rather than vanished.

What to ask your representatives

• Did they support the accelerated repeal, and how do they justify the compressed wind-and-solar timeline given multi-year interconnection delays?
• Will they support relief — such as a placed-in-service extension — for pipeline projects stranded by the July 2026 cutoff through no fault of the developer?
• Now that the consumer EV and residential credits are gone, what is their plan, if any, to keep clean technology affordable for households?