What’s Happening to Renewable Energy Incentives?
The One Big Beautiful Bill Act (OBBBA) is a sweeping piece of legislation, covering a wide range of tax and incentive changes. One area generating a great deal of attention is the significant shift in federal support for renewable energy.
With OBBBA, there’s a clear pivot away from the clean energy priorities that defined the bipartisan Inflation Reduction Act of 2022. Many of that law’s incentives – initially slated to sunset well into the 2030s – are now being rolled back or eliminated. The message from Washington is unmistakable: fossil fuels are back on center stage, while support for renewable technologies is being scaled down.
Energy Credits for Individuals
Among the more impactful changes is the repeal of the Clean Vehicle Credit, which offered taxpayers up to $7,500 for new electric vehicles and $4,000 for used ones. These credits will no longer apply to vehicles purchased after September 30, 2025. The $1,000 tax credit for residential EV charging equipment is also scheduled to expire for property placed in service after June 30, 2026. Additionally, the Energy Efficient Home Improvement Credit – covering upgrades like insulation, windows, and high-efficiency HVAC systems – will sunset at the end of 2025. The same goes for the Residential Clean Energy Credit, which has provided up to 30% of the cost for solar panels and other qualifying systems since the Inflation Reduction Act of 2022.
Households hoping to take advantage of these incentives still have a window of opportunity in 2025 and 2026. But as awareness spreads, there may be a surge in demand – particularly for electric vehicles – that could erode some of the intended financial benefit.
Corporate Energy Incentives
The Congressional Budget Office estimates that over the next decade, OBBBA will eliminate more than half a trillion dollars in tax incentives for renewable energy. This includes the rollback of production and investment credits for solar and wind projects, as well as incentives tied to clean-energy manufacturing and EV infrastructure. Most of the tax incentives for wind and solar projects will be gone by the end of 2027; however, incentives for new geothermal, nuclear, hydroelectric, or battery storage may remain eligible. This rapid phase-out significantly disrupts long-term financial planning for companies in the clean energy sector and may lead to meaningful losses for investors who previously counted on a stable credit environment.
In contrast, the bill introduces several favorable provisions for oil and gas companies. These include the immediate expense of drilling costs, enhanced carbon capture tax credits, a rollback of specific regulations, and a reduction in royalty rates on federal land.
For households or businesses weighing energy-related investments, the window to benefit from existing clean energy incentives is narrowing. The following two years may represent a last chance to lock in these opportunities.
Please reach out to your Wealth Manager with any questions about how these changes may affect your personal or business planning.
Weekly Commentary
Wealth Planning Commentary – August 4, 2025
Mallon FitzPatrick
What’s Happening to Renewable Energy Incentives?
The One Big Beautiful Bill Act (OBBBA) is a sweeping piece of legislation, covering a wide range of tax and incentive changes. One area generating a great deal of attention is the significant shift in federal support for renewable energy.
With OBBBA, there’s a clear pivot away from the clean energy priorities that defined the bipartisan Inflation Reduction Act of 2022. Many of that law’s incentives – initially slated to sunset well into the 2030s – are now being rolled back or eliminated. The message from Washington is unmistakable: fossil fuels are back on center stage, while support for renewable technologies is being scaled down.
Energy Credits for Individuals
Among the more impactful changes is the repeal of the Clean Vehicle Credit, which offered taxpayers up to $7,500 for new electric vehicles and $4,000 for used ones. These credits will no longer apply to vehicles purchased after September 30, 2025. The $1,000 tax credit for residential EV charging equipment is also scheduled to expire for property placed in service after June 30, 2026. Additionally, the Energy Efficient Home Improvement Credit – covering upgrades like insulation, windows, and high-efficiency HVAC systems – will sunset at the end of 2025. The same goes for the Residential Clean Energy Credit, which has provided up to 30% of the cost for solar panels and other qualifying systems since the Inflation Reduction Act of 2022.
Households hoping to take advantage of these incentives still have a window of opportunity in 2025 and 2026. But as awareness spreads, there may be a surge in demand – particularly for electric vehicles – that could erode some of the intended financial benefit.
Corporate Energy Incentives
The Congressional Budget Office estimates that over the next decade, OBBBA will eliminate more than half a trillion dollars in tax incentives for renewable energy. This includes the rollback of production and investment credits for solar and wind projects, as well as incentives tied to clean-energy manufacturing and EV infrastructure. Most of the tax incentives for wind and solar projects will be gone by the end of 2027; however, incentives for new geothermal, nuclear, hydroelectric, or battery storage may remain eligible. This rapid phase-out significantly disrupts long-term financial planning for companies in the clean energy sector and may lead to meaningful losses for investors who previously counted on a stable credit environment.
In contrast, the bill introduces several favorable provisions for oil and gas companies. These include the immediate expense of drilling costs, enhanced carbon capture tax credits, a rollback of specific regulations, and a reduction in royalty rates on federal land.
For households or businesses weighing energy-related investments, the window to benefit from existing clean energy incentives is narrowing. The following two years may represent a last chance to lock in these opportunities.
Please reach out to your Wealth Manager with any questions about how these changes may affect your personal or business planning.
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