President Trump last week signed into law the One Big Beautiful Bill Act (the “Act”). The Act made a number of changes to the clean electricity production credit under Section 45Y of the Internal Revenue Code (the “PTC”), the clean electricity investment credit under Section 48E of the Internal Revenue Code (the “ITC”), and other renewable energy tax credits. Following is a summary of several significant provisions in the Act related to the PTC, ITC, and other tax credits.

PTC and ITC Changes

• For solar and wind projects, instead of beginning to phase out in 2032 or later, the Act instead generally provides that solar and wind facilities are eligible for the PTC or ITC only if placed in service by the end of 2027. There is an exception to this deadline for projects on which construction begins before the one-year anniversary of enactment of the Act. Any such project would, under current beginning of construction guidance, generally still be eligible for the PTC or ITC, as applicable, if placed in service by the end of the fourth calendar year following the year in which construction began. However, an Executive Order issued on July 7 by President Trump, described here, raises the possibility that significant changes to historical beginning of construction rules are in store.
   
• The Act makes clear that energy storage technology installed with a wind or solar facility is still eligible for the ITC, even if the associated wind or storage facility is not eligible.
   
• The Act fixes a technical glitch in the Inflation Reduction Act with respect to the domestic content adder for the ITC. For ITC-eligible facilities the construction of which begins on or after June 16, 2025, the manufactured products threshold remains 40%, and thereafter escalates to 55% for any qualified facility or energy storage technology on which construction begins after December 31, 2026.
   
• Qualified fuel cell property is eligible for the 30% ITC without regard to (1) greenhouse gas emission rates and (2) whether the construction of the property satisfies the prevailing wage and apprenticeship requirements. However, such property is only eligible for the 30% ITC if construction begins after December 31, 2025, which means that projects on which construction begins this year will not be eligible for the ITC under Section 48E or the historic investment tax credit under Section 48.
   
• Storage technology (for the ITC), hydropower projects, marine and hydrokinetic projects, geothermal, nuclear fission, and other types of PTC or ITC-eligible projects (except for wind and solar) would still be eligible for the PTC or ITC, as applicable, if construction begins by the end of 2033. Then credits for those projects would be subject to phasedown for construction beginning after 2033.
   
• The Act also adopts restrictions relating to prohibited foreign entities, which we will cover in a subsequent post. 

Other select changes

• A number of changes were made to the Section 45X manufacturing production tax credit, including eliminating the credit for wind components produced and sold after December 31, 2027, introducing a phasedown of the credit for critical minerals, adding limitations on stacking of credits for manufacturers of multiple eligible components, and adopting restrictions related to prohibited foreign entities. 
   
• The hydrogen production tax credit under Section 45V was amended to apply only to projects on which construction starts before January 1, 2028. Although this is earlier than the 2032 sunset date under the IRA, the final bill is an improvement on the draft legislation that would have repealed the credit for projects on which construction begins after this year.
   
• The clean transportation fuels production tax credit under Section 45Z was extended through 2029, but adjustments were made to the amount of the available credit.