One, Big, Beautiful Bill Act
Updated: August 25, 2025
The One, Big, Beautiful Bill Act (OBBBA), enacted on July 4, 2025, terminates the clean electricity production credit (§ 45Y, PTC) and clean electricity investment credit (§ 48E, ITC) for applicable solar projects that fail to meet specific construction and placed-in-service deadlines. Businesses pursuing clean energy initiatives must act swiftly to secure these credits before they expire, with a critical deadline of July 4, 2026, for beginning construction.
Why the Big Beautiful Bill Act Matters for Businesses
As a business, we understand that every investment needs a return. Profitability sustains not only leadership goals but also our employees’ livelihoods and our contribution to national economic growth. In a recent Forbes article, Council Member Ross Kernez highlighted that investors often examine metrics such as operating profit margins before committing funds. This is a reality we acknowledge.
Source: Calculating Your Company’s Growth Rate (And Other Important Business Indicators)
The OBBBA imposes strict timelines for securing clean energy tax credits, requiring businesses to initiate qualifying solar projects promptly to remain eligible.
When Solar Energy May Not Be the Right Choice
For some facilities, the numbers won’t work. If your electricity rate is around $0.06/kWh, state incentives are minimal, power usage is high, and there’s limited roof or land space for solar, the investment may not deliver a viable return. Sustainability must support both environmental and operational health.
When the Big Beautiful Bill Act Creates a Strong Solar Opportunity
In states with higher energy rates, strong REC values, robust state-level incentives, and ample structurally sound rooftops or open land, solar can meaningfully reduce operating costs. The Big Beautiful Bill may be the push you’ve been waiting for. While the act accelerates the sunset of certain incentives, it also challenges businesses to ask: What are we waiting for?
With just months left, keep in mind that a solar feasibility assessment can take as little as 5–10 days. That’s enough time to determine whether this move makes financial and operational sense.
Big Beautiful Bill Act Solar Incentive Deadlines
1. Begin Construction by July 4, 2026
To qualify for the §45Y Production Tax Credit (PTC) or the §48E Investment Tax Credit (ITC), solar projects must begin construction on or before July 4, 2026 (IRS Notice 2025-42).
If construction starts after this date and the facility isn’t operational by December 31, 2027, the project will no longer qualify.
Ways to Qualify as “Begun Construction”:
- Physical Work Test
- On-site work: Installing racking or structures for solar panels.
- Off-site work: Manufacturing custom components (panels, inverters, transformers, mounting equipment) under a binding written contract.
- Five Percent Safe Harbor(for smaller projects ≤1.5 MW only)
- Incurring at least 5% of the project’s total cost (such as payments for custom components under a binding contract).
Important Update (IRS Notice 2025-42):
Starting September 2, 2025, the 5% Safe Harbor will only apply to projects 1.5 MW or smaller. Larger projects must use the Physical Work Test to qualify.
2. Continuity Requirement & Safe Harbor
Projects that begin construction by July 4, 2026, must keep building consistently to stay eligible.
- Under the Continuity Safe Harbor, a project is automatically considered compliant if it is operational within four years of the start date (for example, by December 31, 2030 for projects that start in 2026).
- If delays happen (due to weather, permitting, or supply chain issues), eligibility can still be preserved with proof of continuous effort.
- Projects starting after July 4, 2026 must be completed and operational by December 31, 2027, or they lose eligibility.
Other Key Sections of the Big Beautiful Bill Act
- Section 70506: Termination of the Residential Clean Energy Credit.
- Section 70507: Termination of the Energy Efficient Commercial Building Deduction.
- Section 179D Amendment: Adds subsection (i) specifying that the deduction no longer applies to properties whose construction begins after June 30, 2026.
- Section 70511: Termination of the Clean Hydrogen Production Credit—moved up from January 1, 2033, to January 1, 2028.
Why Acting Before the Deadlines Matters
The window is short, but the potential impact is long-term. If your operational profile and facility conditions align, acting before these deadlines could lock in benefits that will soon disappear. With the IRS tightening eligibility criteria, early action is no longer optional—it’s strategic.
Source: Sections 45Y and 48E Beginning of Construction Notice
