What the One Big Beautiful Bill Act Changed for Clean Energy Tax Credits

The One Big Beautiful Bill Act (OBBBA), Public Law 119-21, was signed on July 4, 2025. It kept the core clean energy credits and their transferability but shortened the runway for wind and solar, ended most residential credits, and added foreign-entity restrictions. Here is where things stand in late 2026.

Wind and solar: §48E investment credit and §45Y production credit

OBBBA added §48E(e)(4) and §45Y(d)(4). Wind and solar facilities placed in service after December 31, 2027 get no credit, unless construction began on or before July 4, 2026. IRS Notice 2025-42 says that, for this deadline, construction generally begins only when "physical work of a significant nature" starts. The 5% cost safe harbor survives only for small solar facilities (1.5 MW AC or less).

Projects that began construction in time can generally rely on the four-year continuity safe harbor. That means a pipeline of wind and solar credits will keep being generated, and sold, through about 2030. Because the July 4, 2026 deadline has passed, a wind or solar project that starts construction today must be placed in service by the end of 2027.

Storage, geothermal, hydro, nuclear and other technologies

Energy storage technology is expressly carved out of the wind and solar termination, even when it sits at a solar site (§48E(e)(4)(C)). For non-wind, non-solar technologies, the existing technology-neutral phase-down still applies: the full credit for facilities beginning construction through 2033, then 75% in 2034, 50% in 2035, and zero after that.

Foreign entity of concern (FEOC) rules

OBBBA bars "specified foreign entities" and "foreign-influenced entities" from claiming many credits. It also denies §48E/§45Y credits for facilities beginning construction after December 31, 2025 that include "material assistance" from a prohibited foreign entity. Buyers should expect sellers to provide FEOC diligence and representations.

Transferability (§6418) survives

Section 6418 still lets eligible taxpayers sell credits for cash. OBBBA added §6418(g)(5), which prohibits transfers of the §45Q, §45X, §45Y, §45Z and §48E credits to a specified foreign entity. See our guide to §6418 transfers.

Advanced manufacturing (§45X)

Wind energy components produced and sold after December 31, 2027 no longer qualify. Critical minerals phase down from 2031 through 2033, and metallurgical coal is newly eligible only through 2029. Details are in our 45X guide.

Residential and building credits that ended

Credit	Termination (per IRS FS-2025-05)
§25D Residential clean energy	Expenditures made after Dec. 31, 2025
§25C Energy efficient home improvement	Property placed in service after Dec. 31, 2025
§45L New energy efficient home	Homes acquired after June 30, 2026
§179D Commercial buildings deduction	Construction beginning after June 30, 2026

What this means for credit buyers

For businesses and individuals with federal tax liability, transferable credits are still a practical way to reduce what you owe. The supply in 2026 through 2028 is concentrated in projects that started construction before the deadlines, in storage, and in §45X manufacturing. Diligence matters more than ever: confirm the beginning-of-construction evidence, FEOC compliance, and recapture protection. How buying credits works →