- What Does the Bill Change About Clean Energy Incentives?
- What Are the Key Deadlines and Exemptions for Solar Projects?
- What Do Developers Need to Know About Compliance & Domestic Content?
- How Are Residential Solar and Other Clean Technologies Affected?
- Frequently Asked Questions
- The One Big Beautiful Bill Ends Solar Credits and Raises Compliance
What the One Big Beautiful Bill Means for Solar Farms
- What Does the Bill Change About Clean Energy Incentives?
- What Are the Key Deadlines and Exemptions for Solar Projects?
- What Do Developers Need to Know About Compliance & Domestic Content?
- How Are Residential Solar and Other Clean Technologies Affected?
- Frequently Asked Questions
- The One Big Beautiful Bill Ends Solar Credits and Raises Compliance
The One Big Beautiful Bill (OBBB), signed into law on July 4, 2025, makes changes to US clean energy incentives. For solar developers, utilities, and homeowners alike, the bill reshapes how tax credits are applied, when projects must begin, and what compliance hurdles must be cleared. While some provisions remain, such as geothermal and advanced manufacturing credits, the phase-out of solar and wind incentives will have lasting effects. Understanding these shifts is critical for anyone planning a solar farm, residential system, or battery backup installation.
What Does the Bill Change About Clean Energy Incentives?
The One Big Beautiful Bill (OBBB) restructures several clean energy initiatives that were previously introduced under the Inflation Reduction Act (IRA).
One major change is the phase-out of solar and wind tax credits for any commercial projects that start after 2027. Residential solar systems installing products like battery storage systems and EcoFlow 110W Portable Solar Panels will have their credits phased out as of December 21, 2025.
The OBBB retains the ability to transfer credits and offer direct-pay options for these projects, but introduces strict rules regarding foreign ownership, foreign sourcing, and material assistance from prohibited foreign entities (PFEs).
However, the OBBB also retains some clean energy provisions, such as geothermal and certain battery storage provisions, both of which are subject to the new foreign entity and other compliance requirements.
What Are the Key Deadlines and Exemptions for Solar Projects?
The key deadlines and exemptions for solar projects that residential and commercial users may still qualify for are as follows:
Large-scale solar and wind projects must begin construction by July 4, 2026, and be placed in service by December 31, 2027, to remain eligible for restructured tax credits.
A safe harbor allows a project to qualify if 5% of costs are spent within the first 12 months or substantial physical work is done. However, the Treasury could tighten how “beginning construction” is interpreted.
Residential home solar systems under Section 25D and small wind credits are being discontinued as of December 31, 2025. This means that homeowners installing products like EcoFlow 400W Rigid Solar Panels must have their system installed and fully operational by December 31, 2025, in order to still qualify for these incentives.
All commercial projects must now navigate the “foreign entity of concern” (FEOC) and “material assistance” provisions, which could disqualify certain solar investors from eligibility depending on their ownership and supply chains.
What Do Developers Need to Know About Compliance & Domestic Content?
There are several new compliance and domestic content rules that developers need to know:
The OBBB offers the 45X Advanced Manufacturing Production Tax Credit. This is a per-unit tax credit for producing specific clean energy components, such as solar panels, batteries, inverters, and critical minerals. To qualify, they must be manufactured in the same facility, sold to an unrelated party, and must contain at least 65% by cost of domestic-manufactured content. However, they are under review and are subject to eventual phase-out.
Developers must now document their supply chains, certify the origins of their parts, and ensure that no “material assistance” is provided by prohibited foreign entities (PFEs).
The stricter foreign entity rules are a major policy shift where entities with Chinese ownership or control, or receiving assistance from PFEs, risk losing credit eligibility entirely.
The IRS and Treasury are expected to issue additional guidance to further define thresholds and safe harbors for “material assistance” later in 2025 or 2026.
Finally, compliance burdens and recapture risk are expanded: the OBBB extends audit windows and tightens penalties on understatement or misreporting of eligible costs.
How Are Residential Solar and Other Clean Technologies Affected?
The 25D Residential Clean Energy Tax Credit is a nonrefundable federal incentive for homeowners installing clean energy products, such as the EcoFlow DELTA 3 Plus Solar Generator (PV220W), which comes with solar panels and battery storage systems, allowing homeowners to keep their homes and families safe in the event of a grid failure.
The 25D tax credit allows homeowners to deduct 30% of the system’s cost from their federal taxes. However, the One Big Beautiful Bill is terminating solar power tax credit incentives for homeowners as of December 31, 2025. The good news is that you can still be eligible to receive the 25D 30% federal tax credit as long as your system is purchased, installed, and fully operational by the deadline on December 31, 2025.
The One Big Beautiful also eliminates the Energy Efficient Home Improvement Credit (25C), which offsets qualifying energy-saving home improvements, such as insulation, windows, doors, and high-efficiency heating and cooling systems, as of the end of 2025.
Finally, the OBBB is also reducing incentives for utility-scale renewable energy projects, such as wind turbines and solar farms, which must be brought online by December 31, 2027, to remain eligible.
Frequently Asked Questions
What Does the One Big Beautiful Bill Act Do?
The One Big Beautiful Bill Act lowers certain taxes, changes funding for various federal programs, credits, and deductions, phases out tax credits for green energies, raises the debt ceiling, and makes a variety of other changes.
Has the Big Beautiful Bill Passed?
Yes, on July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, which has already significantly revised the US tax code to reflect the current administration’s domestic energy, trade, and national security priorities.
The One Big Beautiful Bill Ends Solar Credits and Raises Compliance
The One Big Beautiful Bill rewrites the rules for clean energy projects, phasing out solar and wind credits while tightening compliance and domestic sourcing requirements. For developers, deadlines are critical, and supply chain documentation is no longer optional; it’s essential. For homeowners, the window is rapidly closing, as the 25D Residential Clean Energy Tax Credit will end on December 31, 2025. Those considering systems like the EcoFlow DELTA 3 Plus Solar Generator (PV220W) should act now to secure remaining incentives. Whether planning a solar farm or a backup system at home, navigating the OBBB’s timelines will define success in the next era of clean energy.