Commentary

One Big Beautiful Bill Act: Renewable Energy Project Credit Implications

Project Finance

Summary

This commentary examines the impact of the "One Big Beautiful Bill Act" on clean energy tax credits and renewable energy projects.

Key highlights include:

-- The One Big Beautiful Bill Act proposes substantial negative changes to clean energy tax credits and the tax equity market overall, including an earlier than expected phase out and the removal of the IRA's transferability clause after 2027.

-- The Senate and House will work towards an agreement on the bill and, as the bill moves forward, the proposed changes to clean energy tax credits could be tempered.

-- We do not expect any credit impact on renewable energy projects currently in operation, but we will continue to monitor ongoing changes.

"Prior to the start of President Trump's administration, clean energy tax credits were thought to be safe from changes, given their broad support, the need for additional energy supply, and the positive impact the credits created for Republican led districts, such as job creation and economic growth, but keeping the tax incentives as they currently stand seems unlikely," said Stacey Mawson, Senior Vice President, Project Finance. "The bill will also have a material impact on the overall growth of U.S. energy production and grid reliability, potentially resulting in increased energy costs and increased market uncertainty, which may slow energy project development."

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