The One Big Beautiful Bill Act (OBBB) has a significant impact on the renewable energy sector, particularly with changes in the phase-out schedules for wind and solar projects under Section 45Y and 48E, as well as the nuances between the “beginning of construction” and “placed in service” language. Yesterday, the Trump administration issued an Executive Order on the renewable energy provisions established in the OBBB. Among other things, the order requires the Secretary of Treasury to:
take all action as the Secretary of the Treasury deems necessary and appropriate to strictly enforce the termination of the clean electricity production and investment tax credits under sections 45Y and 48E of the Internal Revenue Code for wind and solar facilities. This includes issuing new and revised guidance as the Secretary of the Treasury deems appropriate and consistent with applicable law to ensure that policies concerning the “beginning of construction” are not circumvented, including by preventing the artificial acceleration or manipulation of eligibility and by restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built.
The Executive Order shouldn’t come as a surprise. Last week, it was reported that House conservatives were assured by the Trump administration that it would crack down on renewable energy tax credits and projects in exchange for their vote.
Renewable energy companies face a crucial question: What comes next? Are renewable energy tax credits doomed? Will there be another reconciliation bill next year, and if so, will Congress attempt to delay the phase-out schedules for wind and solar projects? Will they seek to extend the “beginning of construction” language that barely made it into the last package?
If a reconciliation bill does materialize next year, it’ll be much closer to midterm elections. That means, House and Senate leadership will be eager to provide vulnerable Republican members with “wins,” potentially bringing the renewable energy sector back onto center stage. It’s a good thing that moderate Republicans were able to get a phased-out approach and “beginning of construction” language in the reconciliation package – bringing back such measures from the grave would have been significantly more challenging.
Now is not the time to take a break from advocating for renewable energy tax credits. The 鶹ֱ Public Affairs team is well-equipped to assist in these efforts.
