“One Big Beautiful Bill” (OBBB) is what they’re calling it. If you’re in the solar industry, it’s anything but. The budget negotiations going on in Congress would, if passed into law, reshape the solar industry as we know it in favor of reanimating the coal industry. It’s up to us to pull together for the cause of our planet and for a sane future for energy generation in the United States.
Below are the updated facts — what all of this means and the likely timeline of events to follow.
Wednesday, June 18 — UPDATE
On Monday, the Senate Finance Committee published its version changes to the IRA. Again, these still need to be voted on, so there’s still time to affect the outcome. Check out our solar advocacy hub for more information on how you can get involved.
Now, here’s what you need to know about the Senate Finance Committee’s changes…
25D repeal 180 days after signing
Analysis: This is cute. 180 days after 7/4 (POTUS’s target) is 12/31, which is the same as the House bill. Of course, if congress moves faster, 25D goes away faster. So, this is essentially no change from the House proposal.
48E has a phase-down instead of a cliff
There were some slight modifications to the House’s version here.
- Full through end of 2025
- 60% in ’26
- 20% in ’27
- 0 in ’28 and beyond
- Additionally, the credit has been reverted back to “commence construction” from “put into service”
- 48E (& 45Y) still explicitly excludes solar leases (TPO and PPA)
Analysis: It’s not a cliff anymore, but it’s still pretty steep. The reversion to “commence construction” is a positive step, though.
FEOC requirements
The good news: The FEOC requirements have been softened, and now reference a ratio that attempts to capture the percentage of interaction with Chinese companies and resources.
The bad news: Actually complying with the FEOC rules will be a nightmare of paperwork, and require than an installer present signed affidavits (on penalty of perjury) from everyone in their supply chain.
In closing…
While there are minor improvements, this doesn’t move the needle much for the solar industry. The good news is that there’s still time to let your reps in congress know how you feel. Go to our solar advocacy hub to learn more about what you can do right now to help save solar.
If you want to see what’s happening on the ground in Washington D.C. and how the solar industry is fighting back, watch our Empower sessions on-demand.
Thursday, May 22 — UPDATE
What is in the OBBB that affects the solar industry
Note: This represents what’s in the bill that was passed by the House of Representatives just after midnight on 5/22.
- Residential ITC (25D): This 30% tax credit would end on 12/31/2025, with no drawdown
- No change from previous proposal
- Commercial 48E & 45Y
- TPO Solar is forbidden from taking these credits upon signing of law by POTUS
- Phaseout timeline for solar projects is removed; Any project that begins construction within 60 days of enactment AND is completed by EoY 2028 will receive full credit value
- Start of Construction: Either physical ground breaking OR 5% cost of materials spent
- FEOC “Poison Pill”
- Clarified language to state that projects must comply with FEOC if they start construction AFTER EoY 2025
- FWIW: The above edits to 48E and 45Y mean that all residential incentives will be gone anyway before this deadline, but it will still affect C&I and Utility scale Solar Projects that meet the 60 day “begin construction window”
- Manufacturing Credit (48X): fully available through 2029, then phased out by 2031
- No Change from previous proposal
- Transferability: Technically still allowed for 48E projects, but onerous updated restrictions on 48E mostly render this moot
Again, this is what passed the House on 5/22. We’ll continue to update this page to help you keep track of what the facts are, and suggest some ways we can fight back.
Information you should know
What happens next?
- The OBBB is being pushed through congress using a process known as reconciliation. Reconciliation places restrictions on what can be included in the budget bill, but also means that the budget can be passed with a simple majority vote (with no possibility of filibuster). As such, only lawmakers who caucus with the Republican party are being allowed to participate in the budget negotiation process.
- This budget still needs to pass the US Senate, and many Republican Senators have expressed concern at various provisions in this budget. This is where there is room for the solar industry to advocate for change to the above provisions.
- However, if whatever bill passes the Senate differs from the initial house bill, it has to go back to the full House of Representatives to get another floor vote (again at simple majority). Rinse and repeat until the House and Senate can agree.
What is the timeline?
- Unfortunately, our crystal ball is in the shop right now, but there are published dates that we can talk about.
- At the time of this writing (5/22) the OBBB passed a vote in the House.
- The new fiscal year begins on October 1. If the budget isn’t passed by then, we might be looking at a government shutdown, though more likely we’d be looking at another continuing resolution (which would preserve all funding levels from the previous year).
