Domestic energy production was a subject of much attention in the recently passed federal legislation. That legislation eliminated significant future tax incentives for new construction of large-scale wind and solar projects. Other energy generation sources are expected to be used more intensively and for a longer period of time than previously assumed in order to meet significant anticipated growth in domestic energy demand.
As we have discussed in recent articles and as has been well publicized, two recent actions out of Washington are significantly impacting the renewable energy industry. The recently enacted One, Big, Beautiful Bill Act (OBBBA) imposes new deadlines on renewable energy facilities to begin construction and/or be placed into service in order to qualify for tax credits. This is discussed in detail in our recent articles here.
In addition to the OBBBA, on July 7, 2025, President Trump issued an Executive Order (EO), directing the Secretary of Treasury to—within 45 days following enactment of the OBBBA (which is August 18, 2025)—strictly enforce the termination of renewable energy tax credits. This includes issuing new guidance “to ensure that policies concerning the ‘beginning of construction’ are not circumvented, including by preventing the artificial acceleration or manipulation of eligibility and by restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built.”
The One Big Beautiful Bill Act (OBBBA), signed into law by President Donald Trump on July 4, 2025, provides for enhanced restrictions on entities claiming many of the renewable energy credits established under the Inflation Reduction Act of 2022 (IRA). Namely, the bill prohibits foreign entities of concern (FEOCs), as well as domestic entities that are related to or otherwise engage in significant transactions with FEOCs, from claiming such credits. The credits that are subject to the new FEOC limitations under the bill include:
On July 4, 2025, the One, Big, Beautiful Bill Act (the Act) was enacted. Several provisions of the Act will impact renewable energy projects and the tax credits generated by such projects. Such provisions include the accelerated termination for wind and solar credits, as well as restrictions with respect to foreign entities of concern. Most of the energy provisions of the Act will take effect beginning with the taxable year beginning after that date of enactment (i.e., the taxable year beginning January 1, 2026, for most taxpayers), although there are some deviations, as described below.
Under the Senate Finance Committee’s June 28th version of the One, Big, Beautiful Bill (the “Bill”), there are several limitations and requirements that would take effect based on the date a project begins construction. For solar and wind projects, unless construction begins prior to enactment of the Bill, the production tax credit and investment tax credit under section 45Y and 48E will terminate for projects that are placed in service after 2027. Additionally, certain restrictions on material assistance from prohibited foreign entities would apply to solar and wind projects which begin construction after June 16th and most other projects that begin construction after 2025. The provisions of the Bill are still being negotiated in the Senate. However, establishing the beginning of construction will almost certainly remain important for developers of renewable energy projects.
The Senate Finance Committee recently released its own draft of the “One Big Beautiful Bill Act” (the Bill) previously passed by the House as H.R. 1. Both the House and Senate versions of the Bill impose restrictions on Inflation Reduction Act (IRA) tax credits based on “material assistance” from “Foreign Entities of Concern” (FEOCs). The House version lacked significant details on what “material assistance” was. The Senate Bill provides significant details on the structure and operation of the restrictions.
On June 16, 2025, the Senate Finance Committee released its version of the “One, Big Beautiful Bill” (OBBB) that would create a steep phase-out of renewable energy tax credits—notably, renewable energy companies would have to start construction on wind and solar projects before December 31, 2025, to receive 100% of the available tax credits. The reconciliation process is far from over, and there are further revisions expected to the text, but the Senate Finance Committee is the final committee in the Senate expected to release legislative text related to energy tax credits.
Its version of the bill includes the following provisions.
Proposed changes to Inflation Reduction Act tax credits, solar tariffs, restrictions on wind energy, orders promoting fossil fuels, and a push for energy-related deregulation are just a few of the executive and legislative actions impacting renewable energy that have arisen at the federal, state, and local levels since President Donald Trump took office. We have
On February 1, 2025, President Trump issued an executive order titled Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border (Canadian Tariff Order),[1] which, inter alia, imposed a 10 percent import tariff on “energy or energy resources” that “are products of Canada.”[2] Additional detail on this order can be found here. Although delayed during negotiations between the US and Canada,[3] the Canadian Tariff Order, including its 10% energy import tariff, ultimately went into effect on March 4, 2025. On March 6, 2025, President Trump issued an executive order exempting goods qualifying under the United States-Mexico-Canada Free Trade Agreement (USMCA) from the Canadia Tariff Order effective 12:01 a.m. on March 7, 2025. However, the President has indicated that the 10% tariff on such goods will resume on April 2, 2025.
At its latest open meeting on February 20, 2025, the Federal Energy Regulatory Commission (FERC) issued an order directing PJM Interconnection, L.L.C. (PJM) and the PJM Transmission Owners (PJM TOs) to demonstrate why the PJM Tariff’s lack of clear rules for co-location arrangements is acceptable or to explain the Tariff changes they would propose to address co-location issues (Show Cause Order). FERC’s Order is focused on the PJM region because there are several contested FERC proceedings involving co-location arrangements in PJM. However, FERC has indicated that it intends to act quickly on co-location arrangements across its jurisdiction. Accordingly, the results of the PJM Show Cause proceeding will likely serve as precedent in other RTO and non-RTO regions under FERC’s jurisdiction.