April 13, 2026
By Rick Margolin, ENGIE Impact | The passage of the One Big Beautiful Bill Act (OBBBA) in July 2025 marked a major policy change for renewable energy and ushered in a period of uncertainty in the sector. The legislation called for an end to clean energy tax credits; and before the expiration date, the new Treasury guidelines make qualifying much more difficult. Solar and wind projects stand to lose up to eight years of tax credits, with the credits now set to be phased out completely after 2027 instead of 2035 under the Inflation Reduction Act (IRA).
If these changes take effect, solar project prices could increase by 30% or more as federal tax credits begin to expire this year. For companies with renewable energy goals that are in the conceptualization or development phase, the window to act on available incentives is rapidly closing. Finance, infrastructure and sustainability leaders must navigate upcoming deadlines and new OBBBA guidelines to determine whether pursuing a project makes sense for their short- and long-term goals.
How do you know if a company is ready for sustainable energy?
Every company’s energy purchasing arsenal should include renewables as a key tool. Renewable energy sources are critical for any business focused on controlling energy costs, reducing exposure to market volatility, gaining budgetary security, increasing reliability or reducing the carbon footprint of their operations.
As a foundation, companies must clearly define their budgetary, operational and sustainability objectives. Next, organizations need to gain a clear and holistic understanding of where their energy supply currently comes from, as well as the parties involved, terms, conditions and prices. To achieve this, the organization must strengthen data collection and storage.
Once these steps are taken, companies need to get a picture of the energy purchasing landscape. This gives them perspective on what conventional energy options look like today, what they are expected to look like in the future, and how this relates to the company’s own trajectory. From there, they can overlay the information across the renewable options landscape and see which markets and instruments are tradable, and what their relative quantitative and qualitative values are.
Two incentives that have stimulated the growth of solar energy companies
The Investment Tax Credit (ITC) and the Production Tax Credit (PTC) are federal incentives designed to encourage the development of renewable energy. These credits have been available in various forms since the late 1970s, but were particularly enhanced by the IRA.
The ITC is available for various investments, including renewable energy, energy efficiency and manufacturing. The Solar Energy Industries Association (SEIA) calculates that since the introduction of the IRA, more than 125,000 megawatts (MW) of new solar energy projects have been financed by the ITC. This alone accounts for nearly 40% of all solar ever built in the United States.
The PTC is a federal incentive under IRC Section 45, which provides a per kilowatt hour (kWh) tax credit for electricity generated by qualified renewable energy sources. Before the IRA, the PTC was used almost exclusively for wind energy projects; Changes introduced by the IRA have expanded the use of the PTC to a wide range of renewable energy sources, including solar energy. Approximately 55,000 MW of new renewable energy capacity, funded by the PTC, has been added since the entry of the IRA.
While the ITC and PTC apply broadly to renewable energy technologies, including wind, geothermal and energy-efficient equipment, solar project developers stand to lose the most from any credit reduction, making timing a critical financial decision. Companies that move forward with solar projects now can still enjoy the full benefit. The future of both credits is uncertain due to changing government policies, meaning those who wait may find that the math no longer works in their favor.
Critical deadlines that companies cannot miss
Businesses looking to take advantage of federal tax credits have two deadlines to comply with:
July 4, 2026: Projects smaller than 1.5 MW can achieve “safe haven” status if at least 5% of the project costs have been deployed by that date. The project must then be put into use no later than December 31, 2030. Projects larger than 1.5 MW must begin “substantial construction” by this date. OBBBA has made changes to this definition that make it significantly more restrictive. Projects that meet this deadline must be put into service no later than December 31, 2030.
December 31, 2027: Projects that cannot meet the July 4, 2026 deadline may still qualify for federal tax credits if construction is completed and placed in service before this date.
Costs of waiting
Companies that want to increase their clean energy consumption by integrating renewable energy face risks if they postpone their projects. Due to the loss of federal tax credits, project costs could increase by 30% or more, posing an immediate risk. In addition, favorable financing, long-term savings and project pipelines will tighten, leaving fewer high-quality options for corporate buyers due to competition in acquiring the best locations and contract terms.
Energy buyers who act quickly can still realize savings and benefits. After OBBBA was adopted, ENGIE Impact helped a major government agency deploy nearly 15 MW of clean energy by evaluating proposals at 26 locations nationwide. ENGIE Impact has recommended 15 projects, for a total of almost 14 MW of solar energy and 0.5 MW of storage. The result was more than $12.1 million in expected net energy savings, nearly 320,000 megawatt hours of renewable energy and nearly $7 million in additional value secured through strategic contract renegotiations at 13 locations. At the same time, ENGIE Impact advised the agency to reject proposals for six projects, saving approximately $5 million in avoidable energy costs. This shows that acting quickly only pays off when organizations rely on experts to help them determine the best strategy and take decisive action.
Conclusion
The post-OBBBA era represents a shift in the way companies invest in renewable energy. Coming soon the costs of solar energy projects can increase by 30% or more. Time is of the essence for finance, sustainability and procurement teams to agree on investment timelines, risk tolerance and a long-term energy plan. Organizations should engage renewable energy consultants early to determine a project’s feasibility, secure financing and meet key dates that determine a project’s eligibility for credits. With the right action plan, organizations that act quickly can save money that their competitors will have to recoup for years.
Author: Rick Margolin is director of Renewable Advisory at Corporate Sustainability Consultant ENGIE Impact.
Keywords: Commercial and Industrial, Investment Tax Credit, ITC, OBBBA, Tax Credit
