“Big, Beautiful Bill” - Here’s what it means for clean energy projects
On May 22nd, the House passed the much-anticipated “big, beautiful bill”, ushering in sweeping changes to clean energy tax credits. If your projects rely on federal incentives, this update is a must-read.
On May 22, the House passed a sweeping energy bill introducing major changes to clean energy tax credits. Some incentives survive, including 45X (Advanced Manufacturing), 45Q (Carbon Sequestration), 45U (Zero-Emission Nuclear), and 45Z (Clean Fuel, now extended to 2031). However, key credits like 45Y/48E (Clean Electricity), 45V (Clean Hydrogen), residential credits (25C/25D/45L), and clean vehicle credits (30D/25E/30C/45W) are repealed or will expire by the end of 2025, with limited safe harbor protections based on construction and service dates.
The bill also places new restrictions on credit transferability—especially for 45X, 45Z, and 45Q—and introduces stricter foreign entity limitations that disqualify taxpayers with ties to prohibited foreign actors or materials. Compared to the earlier May 12th version, this bill accelerates implementation timelines and bans the use of Chinese-sourced materials by 2026, while eliminating third-party ownership structures for claiming solar credits on customer rooftops. The bill now heads to the Senate, with reconciliation targeted by July 4th and a looming mid-August deadline linked to the debt ceiling.
Why It Matters
These sweeping changes could significantly reshape project financing, tax equity structures, and development timelines—particularly given the accelerated phase-outs, new transferability limits, and expanded foreign entity restrictions. With narrow safe harbors and tighter material sourcing rules, stakeholders should act quickly to assess project eligibility, secure key milestones, and ensure compliance under the compressed legislative timeline.
👉 Download the PDF Infographic for a visual breakdown of all key provisions.