The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, and its provisions related to renewable energy projects significantly accelerate the deadline for wind and solar projects to be eligible for investment tax credits.

Accelerated deadlines

OBBBA sets new deadlines for wind and solar projects to either begin construction or commence service in order to qualify for investment tax credits. Qualified solar and wind facilities must now be in service no later than December 31, 2027 unless such facilities “begin construction” within 12 months after the date of enactment of the bill (July 3, 2026). Facilities that successfully begin construction prior to July 3, 2026, will have four years to be placed into service. Solar and wind projects that do not meet these new deadlines will no longer be eligible to receive investment tax credits.

An executive order was issued on July 7‡ to tighten the definition of what constitutes “beginning construction,” and that updated definition is expected to be released in the coming days.

More stringent domestic content required

OBBBA also introduces more stringent requirements for the use of domestically produced materials in the construction of renewable energy projects in order to qualify for tax credits. The amount increases from the current 40% to 45% for qualifying projects which begin construction between now and January 1, 2026, 50% for qualifying projects which begin construction in 2026, and 55% for qualifying projects which begin construction in 2027.

Energy storage projects and non-intermittent renewable energy sources exempt

An important exemption in OBBBA is that energy storage projects (batteries) will be exempt from the December 31, 2027, completion date to qualify for the tax credits, and will be able to claim the full extent of the investment incentive until it is phased out after 2032. In addition, non-intermittent renewable energy sources, such as geothermal, are also excluded.

As the provisions in OBBBA make clear, the timetable for potential solar and wind projects has been significantly accelerated, and any municipality considering such projects will need to move forward quickly to capture the potential tax credits associated with the project.

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