The US House of Representatives has passed the OBBB, sending it to President Trump’s desk to be signed into law
Utility-scale solar gets deadline flexibility, but tight permitting and regulatory obstacles may make the task difficult
Residential solar faces a blow as Section 25D tax credits end in 2025, hitting demand
US President Donald Trump’s One Big Beautiful Bill (OBBB), dubbed by some as the One Big Ugly Bill or the One Big Horrible Bill, with far-reaching ramifications for the US renewable energy industry, is now one step away from becoming a law.
The House of Representatives sealed the deal by passing the bill on July 3, 2025. The bill is now headed to the President’s desk to be signed into law, which should be done on July 4, 2025, as aimed by the current administration.
Among the major highlights of the bill for the US solar industry is that the federal tax credit for solar systems for the residential segment under Section 25D will be abolished after December 31, 2025, 7 years earlier than under the Inflation Reduction Act (IRA). This hits the residential solar sector, where high interest rates have already reduced demand and led to some of the biggest names in the segment filing for bankruptcy (see US Fintech Platform Solar Mosaic Files For Bankruptcy Protection).
Clean electricity investment tax credit (ITC) under Section 48E, and clean electricity production tax credit (PTC) under Section 45Y for utility-scale solar and wind energy projects will be available if they are ‘placed in service’ by December 31, 2027. However, the credits will still be available to facilities that begin construction within 12 months of the enactment of the act, allowing them time to bring their facilities online and still claim the tax credits.
While this seems like much-needed relief for developers, as they can bring their projects online at a slower pace, the fact that they can start construction within 12 months of the bill’s enactment is something to be concerned about. As Cleanview Founder Michael Thomas pointed out in a LinkedIn Post, ‘the devil is in the details’:
Federal agencies could drag their feet issuing permits, making developers miss the 12-month deadline to start construction.
They could make examples out of silly mistakes, punishing people for building things in this country because they filled out the wrong box in a form.
They could send threatening letters to developers and use the bully pulpit to create a chilling effect on new project development and investment.
What other considerations the bill, headed to Trump’s desk, entails for the solar industry was shared by the Solar Energy Industries Association (SEIA) recently (see Relief For Renewables As US Senate Drops FEOC Tax Under OBBB).
Abigail Ross Hopper, the President and CEO of the Solar Energy Industries Association (SEIA), released a statement post the final House passage of the bill, calling it a ‘significant step backwards’ for the US’ energy economy.
She reiterated, “America is in the midst of an energy manufacturing boom, with new solar and storage factories opening across the country thanks to the forward-looking policy this law will upend. Now many of these brand new factories will be forced to shut down and lay off thousands of workers, gutting communities that were finally seeing the kind of industrial revival rural America needs and handing an untimely and strategic victory to China.”
Ray Long, the President and CEO of the American Council on Renewable Energy (ACORE), expressed disappointment, saying that the US should have matched the urgency with which China is aggressively investing in clean energy and digital infrastructure.
“We’re already driving more than $300 billion in private investment, delivering reliable power, and creating jobs in every region of the country. Stable tax policies would have allowed us to do even more,” added Long.
Looking ahead, this may trigger a surge in project completions, accelerating solar installations in the near term. At the same time, with federal tax credits on the way out, the solar sector can look towards the US states for support.
Meanwhile, the focus of the US government now shifts to fossil fuels and nuclear energy. For nuclear energy, production tax credit will be available through 2032, and tax credits for new nuclear generation are in place through 2033, with transferability.
The White House quoted the American Petroleum Institute President and CEO Mike Sommers recently who said, “This historic legislation will help usher in a new era of energy dominance by unlocking opportunities for investment, opening lease sales and expanding access to oil and natural gas development.”
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