Power in Flux // July 7, 2025 // Trump Signs OBBBA into Law

Hi all! I hope you all had a relaxing holiday weekend. This is likely our final update on the path to passing the “One Big, Beautiful. Bill”. In our last Power in Flux, we covered how the Senate passed its revised version of the bill, which then had to return to the House for final approval.

Since that update, the House narrowly passed the OBBBA in a 218–214 vote on Thursday, July 3, after 29 hours of deliberation. President Trump then signed it into law on Friday, July 4.

The final text is the same as what we discussed in our last edition, but I thought it would be helpful to do one last recap of where things stand now compared to the previous law (the Inflation Reduction Act of 2022).

H.R.1 “One Big Beautiful Bill Act // July 4, 2025

 The One Big Beautiful Bill Act (OBBBA)

On July 4, President Trump officially signed the “One Big Beautiful Bill Act” (OBBBA*) into law, following a narrow 218–214 House vote on July 3. This final version rolls back several clean energy incentives established under the Inflation Reduction Act of 2022. To help you navigate the changes, I’ve put together a comparison table showing how the previous law stacks up against OBBBA. I’ve also added coverage of the 45U (nuclear) and 45X (advanced manufacturing) credits in response to questions I’ve received.

 *Side note: Late in the Senate process, the bill’s official “Big Beautiful Bill” name was struck from the text under the Byrd Rule, so it is formally just "the Act." However, it is still widely referred to as the OBBB, now with an "A" for "Act" at the end.

What this Means:

 Wind and Solar Projects Face Stricter Deadlines. The ITC and PTC eligibility rules now require wind and solar projects to be placed in service by the end of 2027; no more start-of-construction flexibility or phased credit ramp-down. This hard cutoff creates more schedule risk for longer development timelines, and developers will need to move quickly to secure incentives.

• Support Appears to Remain for Other Technologies. Energy storage, geothermal, nuclear, and hydro do not face the same 2027 placed-in-service cutoff. These technologies appear to keep the original IRA rules, with “start of construction” deadlines and gradual phaseouts through 2032 or beyond. This gives developers in these sectors more time and planning flexibility.

• Shorter Fixed Credit Window for Carbon Capture, but Stronger Overall Incentives: The Senate version shortens the $17/ton fixed-rate “phase-in” period by one year (ending in 2026), requiring faster planning to lock in certainty. At the same time, it maintains higher 45Q values for carbon capture and enhanced oil recovery (EOR), which may still improve project economics and expand CCUS opportunities.

• Hydrogen Credit Window Shrinks: The 45V credit remains in place but is now limited to facilities placed in service by the end of 2027, which is five years shorter than under the IRA. Near-term projects may still qualify, but the compressed window poses planning challenges, especially given the high capital needs and reliance on incentives in the clean hydrogen sector.

• Nuclear Sees Minimal Change: The 45U credit for existing nuclear facilities remains largely unchanged. Projects can still qualify through the end of 2032, providing continued support and planning certainty for the nuclear sector.

The bottom line: The OBBBA is now law. While it keeps many clean energy credits alive, it imposes shorter timelines for wind, solar, hydrogen, and advanced manufacturing incentives. Nuclear and other firm clean technologies see less change, offering some stability. We’ll likely start to see the impacts of these changes over the next year as developers adjust project timelines, supply chains, and financing plans to meet the new requirements.

H.R.1 “One Big Beautiful Bill Act // July 4, 2025

 The One Big Beautiful Bill Act (OBBBA)

Now that the bill has been signed into law, it shortens the timelines for wind and solar tax credits, reduces the phase-in period for carbon capture incentives, and limits the hydrogen production credit to 2027.

Key Changes from Previous Law (IRA of 2022)

45Y – Clean Electricity PTC

• Changes the qualifying language from “start of construction” to “placed in service” no later than Dec. 31, 2027.

• There is no phase out schedule. It appears to be all-or-nothing by 2027. [Exception: Projects that start construction within 12 months of enactment will qualify for the full value of the 45Y and 48E. They must be placed in service within four years.]

• Separates projects into “Solar/Wind” and “Other” eligible facilities (including energy storage, geothermal, nuclear, and hydro).

• Only wind and solar are explicitly subject to this new placed-in-service cutoff. Other eligible technologies appear to keep the original IRA rule, which requires “start of construction” before January 1, 2034, along with the gradual phaseout schedule.

48E – Clean Electricity ITC

• See 45Y.

45Q – Carbon Sequestration Credit

• No credits can be claimed if the taxpayer is a “a “specified foreign entity” or “foreign-influenced entity”

• Shortens the fixed $17/ton “phase-in” period by one year (ending in 2026 instead of 2027).

• Wage & Apprenticeship Bonus maintained (5x multiplier)

• Keeps the boosted value of CO2 used for EOR to match that of geologic storage: Point Source: $85/ton (up from $60) DAC: $180/ton for DAC (up from $130)

45 U – Zero-Emission Nuclear Power Production Credit

• Does not substantially change the credit.

• Facilities continue to qualify for production through December 31, 2032.

45X – Advanced Manufacturing Production Credit

• Ends the credit for wind energy components produced and sold after December 31, 2027.

• Other eligible components keep phased schedules but face stricter sourcing and foreign-entity restrictions.

45V – Clean Hydrogen Production Credit

• Limits eligibility to facilities placed in service by December 31, 2027. This shortens the window by five years compared to IRA.

45Z – Clean Fuel Production Credit

• Shortens the eligibility period by two years, ending December 31, 2029.

• Tightens eligibility by requiring all feedstock to come from the US, Canada, or Mexico.

• The emissions-based credit calculation remains the same.

Main Agencies Involved

• Department of the Treasury / Internal Revenue Service (IRS)

• Department of Energy (DOE)

• Environmental Protection Agency (EPA)

• Department of Transportation (DOT)

Risks

• Tighter Deadline for Wind and Solar. Projects must be placed in service by the end of 2027 to qualify for credits. With no phase-out schedule, this all-or-nothing cutoff creates high risk for projects with longer development timelines.

• Shorter Incentive Window for Carbon Capture. The phase-in period for the guaranteed $17/ton 45Q base rate is shortened by one year (now ending in 2026). This requires carbon capture projects to move faster to lock in certainty. While the higher credit levels for EOR and DAC remain, planning timelines are tighter.

• Policy Uncertainty Remains. Frequent changes to clean energy tax policy continue to create planning risk. Even with this new law, future changes to legislation could shift incentives again, complicating long-term investment decisions.

Opportunities

• Longer Eligibility for Firm Clean Energy. Energy storage, geothermal, nuclear, and hydro still appear to keep longer credit timelines, offering developers more certainty for planning large-scale projects.

• Maintained Higher Value for CCUS. Higher credit rates for CO₂ storage and EOR ($85/ton for point source, $180/ton for DAC) remain in place, supporting CCUS project economics.

• Hydrogen Credit Partially Preserved. Instead of full repeal, the 45V credit remains available through 2027, giving near-term projects an incentive window to move forward.

• Stable Support for Nuclear: The 45U credit for existing zero-emission nuclear power remains largely unchanged, offering continued support for nuclear facilities through 2032 and giving operators stability for planning and investment.

Now that President Trump has signed the “One Big Beautiful Bill Act” into law, the new rules are set. This was one of the main items we were tracking, and with it now enacted, we'll shift focus to other major industry updates as they arise. Stay tuned.