The Inflation Reduction Act + OBBBA

The short version

The Inflation Reduction Act, signed in August 2022, was the largest US clean energy investment ever — roughly $369 billion in projected tax credits and direct spending over a decade. Its centerpiece was a restructured and substantially expanded set of clean energy tax credits, including 10-year extensions of the production and investment tax credits for wind and solar, new credits for standalone storage and clean hydrogen, expanded EV credits, manufacturing credits to onshore the supply chain, and new credit monetization mechanisms that dramatically expanded access for tax-disadvantaged owners. The One Big Beautiful Bill Act, signed July 4, 2025, reshaped that framework — accelerating the phaseout of several credits while preserving others. This page is a consolidated reference for where the federal credit landscape stands in 2026.

Wind & solar generation: terminated

The 45Y production tax credit and 48E investment tax credit for wind and solar facilities terminate for projects placed in service after December 31, 2027. A safe harbor preserves the credits for projects that begin construction within 12 months of OBBBA's enactment — that is, before July 4, 2026. Projects that meet the BOC safe harbor by July 2026 receive the full credit on the same terms as under the IRA, including bonus adders for domestic content and energy community siting. Projects beginning construction after that window face a hard PIS deadline of end-2027 to claim any credit at all.

For commercial buyers signing PPAs with new wind and solar projects, the implication is sharply asymmetric. Projects with executed interconnection agreements and BOC milestones achievable by mid-2026 remain economically competitive on roughly pre-OBBBA terms. Projects in earlier development stages face significant repricing as developers reflect the loss of expected tax credit value. Industry data show 2026 solar PPA indices climbing to the $40-60/MWh range and onshore wind to $45-70/MWh, well above the $20-40/MWh levels seen in 2024. Offshore wind, which was already economically stressed by supply chain inflation and rising rates, faces a particularly difficult path post-OBBBA.

Storage: preserved

The 48E investment tax credit for battery energy storage was largely preserved by OBBBA. Both standalone storage and storage co-located at wind and solar facilities remain eligible — meaning a solar-plus-storage project after 2027 can still claim the storage portion of the credit even after the solar portion sunsets. Eligibility extends through end-2033 BOC followed by a three-year phaseout, providing roughly a decade of continued credit availability. Domestic content, energy community, and low-income community bonus adders continue to apply.

This asymmetric treatment — wind and solar terminated, storage preserved — is the single most important post-OBBBA dynamic for clean energy developers. Storage-only projects, storage-heavy hybrids, and projects designed to optimize the storage value remain economically robust under the post-OBBBA framework. The 2025 OBBBA effectively accelerated a market shift that was already underway: from "renewables-led" deployment to "storage-led" deployment, with renewables increasingly racing the BOC clock.

EVs, charging, and efficiency: ended or sunsetting

OBBBA accelerated the termination of consumer-side credits. The 30D consumer Clean Vehicle Credit and the 45W Commercial Clean Vehicle Credit ended September 30, 2025. The 30C Alternative Fuel Vehicle Refueling Property Credit (for charging stations) ended December 31, 2025. The 25C Energy Efficient Home Improvement Credit and 25D Residential Clean Energy Credit (which had funded residential heat pumps, geothermal, solar, etc.) ended end-2025. The 45L New Energy Efficient Home Credit ended on the same timeline. The 179D commercial buildings energy efficiency tax deduction sunsets for projects with begin-construction dates after June 30, 2026 — projects already in design should accelerate to lock in eligibility.

NEVI corridor funding (administered through state DOTs for highway DCFC deployment) and state-level EV programs (California HVIP, NY Truck Voucher, Colorado, Oregon, Washington) continue to operate. Utility make-ready programs — which fund 50-80% of electrical infrastructure to charging stations — are now typically the largest single incentive available for commercial EV charging. State programs in MA, NY, CA, RI, and other states continue to provide substantial incentives for commercial building electrification.

Clean hydrogen (45V): extended

The 45V clean hydrogen production tax credit was the rare credit that OBBBA made more generous, not less. The begin-construction deadline was extended from December 31, 2025 to January 1, 2028 — approximately a two-year extension. The base credit structure remained intact: up to $3/kg for hydrogen produced with lifecycle carbon intensity below 0.45 kg CO₂e/kg H₂, with bonus credits for prevailing wage and apprenticeship compliance. Treasury's controversial three-pillar implementation rules (additionality, temporal matching, deliverability) continued to apply.

The 45V extension reflected an emerging political consensus that domestic hydrogen production capability — particularly for industrial processes, ammonia, and steel — is strategically valuable in ways that wind and solar electricity (which compete with mature, lower-cost incumbents) are not. Whether the extended 45V actually drives the wave of green hydrogen project investment that proponents predicted remains uncertain — economics still depend heavily on cheap renewable electricity, which itself faces post-OBBBA repricing pressure.

Manufacturing credits (45X, 48C): preserved with FEOC

The 45X Advanced Manufacturing Production Credit (for solar wafers, cells, modules, wind components, batteries, critical minerals) and the 48C Qualifying Advanced Energy Project Credit (for clean energy manufacturing facility investment) were both preserved by OBBBA, with one major qualification: Foreign Entity of Concern (FEOC) restrictions were tightened significantly. Components sourced from FEOC-controlled entities (broadly, entities owned, controlled, or substantially influenced by China, Russia, Iran, or North Korea) cannot qualify for the credits, and project ownership and supply chain structures must be carefully documented.

Wind components under 45X were specifically targeted for termination after 2027, aligning with the broader wind credit phaseout. Solar, battery, and critical mineral components remain eligible on longer timelines, supporting continued domestic supply chain buildout. The 48C program continues to allocate competitively bid credit slots for new manufacturing facility investment, with multiple rounds expected through the late 2020s.

Transferability: retained

The IRA's signature financing innovation — transferability, allowing project owners to sell tax credits to unrelated third-party buyers for cash — was retained by OBBBA across all preserved credits. This was a critical decision. Before the IRA, tax credits could only be monetized through complex tax equity partnerships, which limited access to a few large investment banks and corporates with substantial tax appetite. Transferability dramatically expanded the credit buyer market, with most credits now selling at 90-95 cents on the dollar to a broad range of corporate tax-liability buyers.

For commercial energy buyers, transferability has two implications. First, buying clean energy tax credits directly is now a meaningful procurement option — corporate buyers with substantial federal tax liability can purchase ITC or PTC credits to reduce their tax bill while supporting clean energy investment. Second, project economics on credits-eligible projects (storage, CHP, geothermal, hydrogen, manufacturing) remain financeable on essentially the same terms as before OBBBA — a significant continuity even as the eligible technology mix has narrowed.

What this means in 2026

For wind and solar developers and offtakers, the next 14 months (through July 4, 2026 BOC safe harbor) are extraordinarily important — projects either qualify or they don't, with significant economic consequences either way. For storage developers, the post-OBBBA environment is broadly favorable: continued tax credit eligibility, growing market value as renewable penetration increases price spreads, and expanding ancillary service revenue opportunities. For hydrogen developers, the extended 45V timeline provides breathing room, though project economics still depend on cheap renewable electricity. For commercial buyers, the federal credit menu has narrowed but the surviving credits (storage, CHP, geothermal, hydrogen) and the surviving structures (transferability, bonus adders) remain materially valuable for well-designed projects.