On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law, which brought with it major changes to United States clean energy policy. The bill’s impact stretches far and wide, impacting oil and gas leasing, agricultural conservation, fossil fuel royalty rates and sustainable energy tax credits.
In many ways, the OBBBA repealed the country’s recent sustainable legislative developments, including narrowing access for manufacturers, developers and investors to clean energy tax credits as outlined by the Inflation Reduction Act of 2022 (IRA). In tandem with the OBBBA, just days later, President Trump directed federal agencies to end their support of “green” energy technologies, such as solar and wind power, with Executive Order 14315.
With access to energy tax credits reduced and eligibility criteria rigidified, it’s more important than ever to understand exactly how this recent bill affects your tax implications and our country’s energy landscape.
The passage of the One Big Beautiful Bill Act has impacted the U.S. energy landscape in various ways.
Many of the incentives introduced by the IRA will either be phased out ahead of schedule or repealed entirely.
Six major tax credits have been affected by the OBBBA:
Many clean energy tax credits now have more restrictions for projects associated with FEOC.
A prominent feature of the OBBBA is the creation and introduction of the Prohibited Foreign Entity regime. The goal of this regime is to reduce foreign influence on the U.S. tax landscape, primarily limiting collaboration with China, Russia, North Korea, and Iran.
By limiting the influence of the affected nations, the OBBBA prevents any projects that source materials from these countries — such as minerals, components or intellectual property — from receiving tax credits. Even those with investment or partial ownership of projects with financial links to the covered nations might be prevented from receiving credits.
These changes will have significant implications for the U.S. supply chain, forcing manufacturers to spend more efforts ensuring compliance, due diligence and thorough documentation, and may require immediate shifts to compliant alternatives.
The OBBBA made several changes that affect car buyers and their tax benefits.
Under the new bill, the Electric Vehicle Credit will now expire this year, on September 30, 2025. Any purchases of electric vehicles made before September 30 will receive the preestablished tax credits, but any purchases made after that date will not benefit from the incentive, and you cannot claim them on future tax returns.
As of October 1, 2025, there will be no more federal tax credits for used or new electric vehicles.
Under the OBBBA, many provisions for the Department of Energy’s (DOE) Loan Programs Office (LPE) have been rescinded.
The IRA established a loan commitment authority to the LPE, which included funding over multiple categories, such as Innovative Energy and State Energy Financing Institutions. Section 50402 of the OBBBA repealed this commitment, constraining the capacity for future loan awards.
Instead of focusing on reducing emissions and repurposing infrastructure, the OBBBA’s new Section 1706, the “Energy Dominance Financing” program, prioritizes grid reliability, energy supply and the development of critical minerals.
The bill’s elimination of consumer clean energy credits will increase consumer energy prices for households and businesses nationwide.
Many tax credits implemented by the IRA and other previous legislation have made the installation of renewable energy systems and energy-efficient home improvements more affordable, but many of these long-standing credits have been rescinded by the bill.
The OBBBA’s changes affect the following clean energy credits:
The legislative landscape of our country can be challenging to navigate, and the implementation of significant changes by the new bill has left many investors and consumers uncertain about their energy-related projects and tax requirements.
At Polston Tax, we have provided our clients with comprehensive tax planning and representation services for over 23 years. With a track record of successful negotiations and strategic savings results for business and individuals alike, we can help you navigate the uncertain state energy landscape with confidence.
To learn more about our tax services, call us at 844-841-9857 or complete an online contact form today.
