Full Title: Significant Cuts to IRA Clean Energy Tax Credits Included in Enacted Reconciliation Bill
Author(s): Mary Alexander, Shariff N. Barakat, Jingli Jiang, Amy S. Elliott, Lily Veronica Esfandiary, Omar Farid, Jerome L. Garciano, Sarah B. W. Kirwin, Christopher A. Treanor, Jeffrey D. McMillen and Zachary M. Rudisill
Publisher(s): Akin
Publication Date: July 8, 2025
Full Text: Download Resource
Description (excerpt):
President Trump signed the “One, Big, Beautiful Bill Act” (the “OBBB”) into law on July 4, 2025. Congress passed the legislation using the budget reconciliation process to avoid the 60-vote Senate filibuster. In addition to making many of the individual tax cuts from the 2017 Tax Cuts and Jobs Act permanent, the bill makes significant changes to many of the clean energy credits included in the Inflation Reduction Act of 2022 (the “IRA”).
Projects that began construction before 2025 and are planning on claiming production tax credits (“PTCs”) or investment tax credits (“ITCs”) under sections 45 and 48 are generally unaffected by the OBBB. However, the OBBB is a mixed bag when it comes to the other energy tax credits that were introduced or extended by the IRA. The OBBB makes substantial cuts to the tech-neutral tax credits for solar and wind and eliminates certain other energy tax credits (e.g., those for hydrogen, EVs and homeowners), but other technologies and activities (e.g., geothermal, carbon capture, nuclear, clean fuel production) experienced fewer claw backs of the benets provided by the IRA.