For months, Republican lawmakers and former President Trump have voiced opposition to clean energy tax benefits introduced under the Inflation Reduction Act (IRA). With the recent passage of the One, Big, Beautiful Bill Act (OBBBA), several of those incentives are being repealed or significantly reduced.
Here’s a breakdown of the clean energy tax credits affected by the OBBBA — and what individuals and businesses need to know before they expire.
Clean Energy Tax Credits for Individuals
Several tax credits aimed at homeowners and consumers will sunset earlier than expected. However, the OBBBA provides short grace periods, offering a limited window for action.
Energy Efficient Home Improvement Credit (IRC Sec. 25C)
- Old expiration: 2032
- New expiration: December 31, 2025
- What it covers: 30% credit for improvements like energy-efficient windows, doors, insulation, and home energy audits.
Residential Clean Energy Credit (IRC Sec. 25D)
- Old expiration: 2034
- New expiration: December 31, 2025
- Applies to: Solar panels, geothermal systems, wind, biomass, and other clean energy installations.
Clean Energy Tax Incentives for Businesses
Several business credits have also been shortened or eliminated, especially those related to commercial property and clean manufacturing.
Alternative Fuel Vehicle Refueling Property Credit (IRC Sec. 30C)
- Old expiration: 2032
- New deadline: Property must be placed in service by June 30, 2026
- Credit: Up to $100,000 per item (charging port, storage tank, etc.)
Energy Efficient Commercial Building Deduction (IRC Sec. 179D)
- Eliminated for: Projects that begin construction after June 30, 2026
- Note: This deduction was significantly enhanced under the IRA before being repealed.
Wind and Solar Incentives (IRC Secs. 48E, 45Y)
- Eliminated: Clean Electricity Investment & Production Credits
- Cutoff: Facilities placed in service after 2027 unless construction begins before July 4, 2026
Advanced Manufacturing Production Credit (IRC Sec. 45X)
- Wind energy components ineligible after 2027
- New rule: Adds metallurgical coal to eligible materials
- Phaseout for others: From 2031 to 2033
- Metallurgical coal credit ends after 2029
Note: You can still transfer clean energy tax credits before they expire, though restrictions apply for transfers involving “specified foreign entities.”
Clean Vehicle Tax Credits — Ending Soon
Thinking about buying an electric vehicle? You’ll want to act fast. Several consumer and business EV incentives will expire much earlier than expected under the OBBBA.
Clean Vehicle Credit (IRC Sec. 30D)
- Old expiration: 2032
- Now ends: September 30, 2025
- Credit: Up to $7,500 for new EVs meeting mineral and battery sourcing rules
Used Clean Vehicle Credit (IRC Sec. 25E)
- Ends: September 30, 2025
- Credit: Lesser of $4,000 or 30% of sale price for qualifying used EVs
Commercial Clean Vehicle Credit (IRC Sec. 45W)
- Now limited to: Vehicles acquired before September 30, 2025
- Credit: Up to $7,500 (light vehicles) or $40,000 (heavy vehicles)
Other Limitations: Foreign Entities and Domestic Content Rules
The OBBBA also tightens the rules on remaining clean energy incentives by:
- Prohibiting credits tied to “foreign entities of concern”
- Imposing stricter domestic content requirements
Don’t Wait Until It’s Too Late
Whether you’re a homeowner considering solar panels, a business upgrading commercial property, or a taxpayer looking to purchase an EV, now’s the time to act. With shortened expiration dates and increased restrictions, proper planning is more critical than ever.
Need help navigating these changes? Our tax professionals can help you make informed, strategic decisions.
Contact us today to explore how these expiring clean energy credits affect you.
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