‘One Big Beautiful Bill’ signed into law, reflects de-prioritization of renewable energy

July 7, 2025

President Donald Trump at a July 4 ceremony to sign the One Big Beautiful Bill Act into law. Source: Associated Press.

President Donald Trump on July 4 signed the tax and spending cut bill that also deals a blow to incentives for renewable energy projects created by the 2022 Inflation Reduction Act (IRA).

A day earlier, the U.S. House of Representatives had passed the U.S. Senate’s version of the bill 218-214.

The legislation, known as the One Big Beautiful Bill (OBBB) Act, largely hampers the ability of projects to qualify for the clean electricity 45Y production tax credit and 48E investment tax credit as specified in the IRA.

OBBB terminates the investment tax credit (ITC) eligibility of wind, solar and energy storage projects placed into service after December 31, 2027. There is an exception for projects that begin construction within a year of the law’s enactment.

Under terms of the IRA, developers had a predictable, multi-year window (at least through 2032) to begin construction and claim the ITC.

“Wind and solar developments face a compressed window to secure [investment tax credits] where projects may want to target commencing construction within the next 12 months to satisfy the start of construction exception,” said the law firm Frost, Brown and Todd.

Other qualifying facilities, such as nuclear, geothermal and clean‑hydrogen projects, remain on the original statutory timeline, phasing down after 2032 at 100% in 2033, 75% in 2034, 50% in 2035 and 0% in 2036.

Similarly, to claim the IRA’s Production Tax Credit (PTC), wind and solar projects that begin construction more than one year after enactment now must be placed into service before the start of 2028. Wind and solar projects starting construction within the first post‑enactment year do not face a placed in-service deadline.

Facilities other than wind and solar follow the established post-2033 phase-out schedule, receiving 100% of the credit if construction begins in 2033, 75% if in 2034, 50% if in 2035, and no credit for projects starting after 2035.

Meanwhile, as part of the OBBB, a tax credit for the production of critical materials is being expanded to include metallurgical coal used in steelmaking.

Renewable energy advocates have called OBBB a death sentence for wind and solar.

According to a report by the Princeton University ZERO Lab, passage of the OBBB would result in $500 billion less investment in clean energy by 2035, sharply increasing greenhouse gas emissions. The law would also cut over 280 GW of new solar and wind capacity through 2035, according to the report.

The return of the Trump administration has meant a shift in U.S. energy policy. Renewable energy is being de-prioritized in favor of firm, dispatchable sources. The administration is prioritizing energy security in an era of exploding artificial intelligence and its energy needs.

“Coal is back,” Trump declared in a July 4 speech, before signing the OBBB into law. “I said you can’t use the word ‘coal’ unless you precede it by saying clean, beautiful coal.”