The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, brought sweeping updates to the U.S. tax code — extending, modifying, and in some cases, accelerating the end date for several clean energy incentives that benefit businesses.
While some incentives are being phased out earlier than expected, there’s still time for companies to take advantage of valuable clean energy tax deductions and credits — but only if they act quickly.
Energy-Efficient Building Deduction (Section 179D)
The Section 179D deduction allows commercial building owners to immediately deduct the cost of qualifying energy-efficient improvements rather than depreciating them over the traditional 39-year period.
However, under the OBBBA, this deduction will no longer be available for property that begins construction after June 30, 2026.
Eligible taxpayers include:
- Commercial building owners
- Tenants and REITs that make qualifying upgrades
- Architects, engineers, and designers of government-owned or nonprofit-owned buildings (including schools, religious institutions, and tribal organizations)
This deduction applies to both new construction and renovations of commercial properties — as well as multifamily residential buildings that are four or more stories above ground.
Qualifying improvements may include:
- Interior lighting systems
- HVAC and hot water systems
- The building envelope (such as insulation, windows, and walls)
To qualify, improvements must reduce annual energy and power costs by at least 25% compared to industry standards, verified by a licensed engineer or independent contractor.
Deduction Amounts
- Base deduction: $0.50 to $1.00 per square foot, depending on energy savings (25% to 50%).
- Bonus deduction: $2.50 to $5.00 per square foot if projects meet prevailing wage and apprenticeship requirements.
Other Key Clean Energy Tax Credits Impacted by the OBBBA
Alternative Fuel Vehicle Refueling Property Credit (Section 30C)
Businesses can still claim this credit for electric vehicle (EV) charging stations and clean fuel storage equipment placed in service before June 30, 2026.
- Credit value: Up to $100,000 per qualifying item (each charging port, dispenser, or storage unit)
- Previously scheduled to expire in 2032, this credit now ends much sooner.
Clean Electricity Investment & Production Credits (Sections 48E and 45Y)
These credits for wind and solar energy projects will no longer apply to facilities placed in service after 2027, unless construction begins before July 4, 2026.
To qualify:
- Projects must begin by July 4, 2026
- They must be operational by December 31, 2027
This acceleration creates urgency for developers and investors in renewable energy sectors.
Advanced Manufacturing Production Credit (Section 45X)
The OBBBA also reshapes this credit for manufacturers producing clean energy components.
- Wind energy components will no longer qualify after 2027.
- The law adds metallurgical coal (used in steel production) to the list of critical materials.
- Credits for most other critical materials will phase out from 2031 through 2033, while metallurgical coal credits end after 2029.
Why Businesses Should Act Now
The window to secure these clean energy incentives is closing fast. If your business has been considering solar panels, EV infrastructure, or energy-efficient building upgrades, now is the time to move forward.
Working with an experienced CPA firm like Botwinick & Company ensures you:
- Identify eligible projects under the latest IRS guidance
- Maximize available deductions and credits before they expire
- Comply with prevailing wage and apprenticeship requirements
- Structure investments to capture the highest possible tax benefits
Many of the most valuable clean energy tax incentives are ending years earlier than expected due to the OBBBA’s accelerated phase-outs. Strategic planning can help your business save thousands — or even millions — in tax liability before these opportunities disappear.
Botwinick & Company, CPAs can help you navigate these complex changes, determine your eligibility, and take full advantage of the benefits still available.
📞 Contact us today to discuss how your business can act before time runs out.
