Here’s what HIVE AI had to say about “Which clean energy tax credits are being phased out or modified, and when do they expire under the One Big Beautiful Bill?”:

Clean Energy Tax Credit Phase-Outs and Modifications Under the One Big Beautiful Bill

The One Big Beautiful Bill Act (OBBBA), passed in July 2025, represents a significant shift in federal energy policy, implementing substantial changes to clean energy tax incentives. The legislation phases out or modifies numerous clean energy tax credits that were originally established under the Inflation Reduction Act, with specific expiration dates and restrictions that taxpayers must carefully navigate.

Individual Clean Energy Credits Being Terminated

Clean Vehicle Credits

The Clean Vehicle credit, which provided up to $7,500 for a new electric vehicle and $4,000 for a used one, is terminated for vehicles acquired after September 30, 2025. This represents a dramatic acceleration of the phase-out timeline, as these credits were originally scheduled to continue through the early 2030s. The clean vehicle credit now expires for vehicles purchased after September 30, 2025, and eligible taxpayers who were considering purchasing a qualifying vehicle should consider making this purchase before the deadline.

The termination of these credits affects both individual consumers and businesses that were planning to transition their fleets to electric vehicles. The shortened timeline creates urgency for taxpayers who had been considering electric vehicle purchases as part of their long-term financial planning.

Alternative Fuel Vehicle Refueling Property Credit

The Alternative Fuel Vehicle Refueling Property Credit, which provided up to $1,000 for electric vehicle charging equipment installed at a taxpayer’s personal residence, is terminated for property placed in service after June 30, 2026. This credit was particularly valuable for homeowners installing Level 2 charging stations and other EV infrastructure.

Residential Energy Credits

The OBBBA implements significant changes to residential energy incentives through two major modifications:

Energy Efficient Home Improvement Credit: Section 25C(h) is amended by striking “placed in service” and all that follows through “December 31, 2032” and inserting “placed in service after December 31, 2025” One Big Beautiful Bill Act: Sec. 70505. Termination of energy efficient home improvement credit . This credit, which provided up to $1,200 toward the cost of energy-efficiency improvements such as windows, doors, insulation, or heating and cooling equipment, and home energy audits, is terminated for property placed in service after December 31, 2025.

Residential Clean Energy Credit: Section 25D(h) is amended by striking “to property placed in service after December 31, 2034” and inserting “with respect to any expenditures made after December 31, 2025” One Big Beautiful Bill Act: Sec. 70506. Termination of residential clean energy credit . This credit, which provided up to 30% of the cost of purchasing or installing solar panels, wind power, geothermal heat pumps, or fuel cell equipment, is terminated for expenditures made after December 31, 2025, regardless of when the property is placed in service.

Business and Commercial Clean Energy Credits

Advanced Manufacturing Production Credit Modifications

The OBBBA introduces Foreign Entity of Concern (FEOC) restrictions for several credits, including the advanced manufacturing production credit (45X), and alters phaseouts and eligibility for this credit Tax Foundation . The legislation implements more stringent requirements for businesses seeking to claim these credits, particularly focusing on supply chain security and domestic content requirements.

Clean Hydrogen Production Credit Phase-Out

The clean hydrogen production credit (45V) is repealed after 2027 Tax Foundation . This represents a significant acceleration of the phase-out timeline for what was considered a key component of the clean energy transition strategy. The credit was originally designed to incentivize the development of clean hydrogen production facilities, but the OBBBA’s changes reflect a shift in federal energy priorities.

Clean Fuel Production Credit Extension with Modifications

Contrary to the general trend of credit eliminations, the clean fuel production credit (45Z) is extended until 2030 and eligibility is expanded Tax Foundation . Section 45Z(g) is amended by striking “December 31, 2027” and inserting “December 31, 2029” One Big Beautiful Bill Act: Sec. 70521. Extension and modification of clean fuel production credit . This extension provides some continuity for biofuel producers and other clean fuel manufacturers, though it comes with additional compliance requirements and restrictions.

Energy Efficient Commercial Buildings Deduction

The deduction for energy-efficient commercial buildings (179D) is repealed after one year of the law’s enactment Tax Foundation . This affects commercial property owners and developers who had been relying on this deduction to offset the costs of energy-efficient building improvements.

Production Tax Credits and Investment Tax Credits

Clean Electricity Production and Investment Credits

The OBBBA implements phase-out mechanisms for several electricity-related credits. The clean electricity investment credit under section 48E includes a phase-out where the credit amount is reduced based on when construction begins, with phase-out percentages of 100 percent, 75 percent, 50 percent, and ultimately 0 percent for facilities beginning construction in successive calendar years following the applicable year .

Nuclear Production Credit Restrictions

The nuclear production credit (45U) now includes FEOC restrictions Tax Foundation , which may limit the ability of certain entities to claim these credits based on foreign ownership or control considerations.

Carbon Capture and Sequestration Credits

Carbon Oxide Sequestration Credit Expansion

While many credits are being phased out, the law expands the carbon oxide sequestration credit Tax Foundation . The carbon oxide sequestration credit (45Q) includes FEOC restrictions and altered phaseouts and eligibility requirements Tax Foundation . This represents one of the few areas where the OBBBA actually enhances clean energy incentives, reflecting the administration’s focus on carbon capture technology as a bridge solution.

Implementation Timeline and Compliance Challenges

Regulatory Guidance Requirements

The administration is now working through regulatory guidance and interpretation for businesses planning to take the expiring credits over the next two years, which will require close monitoring by taxpayers who desire to comply with the tax law while also claiming residual credits prior to their expiration Tax Foundation . This creates significant compliance challenges for taxpayers who must navigate the transition period while ensuring they meet all requirements for credits claimed before the expiration dates.

Foreign Entity of Concern Restrictions

A significant aspect of the OBBBA’s modifications involves the implementation of Foreign Entity of Concern (FEOC) restrictions across multiple credit categories. The legislation introduces FEOC content thresholds for wind and solar projects and includes FEOC restrictions for several other credits, including the nuclear production credit (45U), the clean fuel production credit (45Z), the carbon oxide sequestration credit (45Q), and the advanced manufacturing production credit (45X) Tax Foundation Tax Foundation .

Revenue Impact and Policy Implications

Fiscal Impact

One of the largest areas of reform in OBBBA is the repeal or early phaseout of many of the Inflation Reduction Act’s green energy tax credits, with these changes raising about $500 billion over a decade, reducing the cost of the green energy credits by about half Tax Foundation . This substantial revenue generation reflects the significant fiscal impact of the credit eliminations and modifications.

Strategic Policy Shift

Several IRA credits—like those for electric vehicles (EVs) and residential energy products—are repealed so they no longer apply beyond this year, while most others are restricted or phased out on an accelerated schedule over the next few years Tax Foundation . This represents a fundamental shift in federal energy policy away from the broad-based clean energy incentive approach that characterized the Inflation Reduction Act.

The OBBBA’s approach to clean energy credits reflects a more targeted and restrictive policy framework that prioritizes certain technologies while eliminating support for others. Taxpayers and businesses must carefully review their clean energy investment plans and ensure compliance with the new timelines and restrictions to maximize available benefits before the various expiration dates take effect.

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Which clean energy tax credits are being phased out or modified, and when do they expire under the One Big Beautiful Bill?