The host of clean energy tax credits ushered in by the Inflation Reduction Act have not disappeared entirely, as some had feared. In the wake of the One Big Beautiful Bill Act, there are still some possible investments to be found, experts say.
"There was some concern that Trump would repeal the IRA," said Bryen Alperin, a partner and managing director at Foss & Co., which has focused on the tax credit market in the U.S. for large corporate institutional investors for more than 40 years. "But we will ultimately end up with not what we would like to have, but not as bad as what we thought it could be."
"Most of the credits are largely intact," he explained. "They're phasing out, but it's a softball phaseout. Essentially after 2027, it preserves the core clean energy tax credit framework while gradually phasing down benefits and adding new conditions over the coming years. In other words, the worst-case fears of an immediate credit repeal did not materialize. We once again have clarity and a stable — if evolving — policy landscape for the next several years."
This is good news for investors, he said: "The uncertainty of pending legislation is gone, transferability of credits remains intact, and many near-term projects will be shielded by generous grandfathering rules. We also have a clear window of opportunity right now to launch and finance projects under favorable terms before new restrictions phase in later. This measured approach provides stability and avoids a disruptive halt to incentives. The ability to transfer tax credits for cash remains fully in place. Investors and developers can continue to monetize credits through transfers or direct pay as under current law. OB3 did not roll back these financing tools, preserving flexibility in how projects raise capital."
"We likely have several years of safe-harbored projects in the pipeline that are exempt from the new foreign entity rules and not subject to the 2027 sunset," he noted. "In fact, projects starting construction through mid-2026 can qualify for full-value credits even if completed as late as 2028-2029. This grandfathering means that many deals in 2025-2027 can proceed under existing rules and timelines, insulating them from OB3's accelerated phase-out."
The act provides clarity and a path forward, Alperin concluded. "The clean energy tax credit landscape is evolving, but remains highly investable. The near-term outlook is especially favorable for closing deals, with full value credits and transferability intact, before gradual phase-outs occur."
In the end, the act doesn't represent the end of green tax credits, he explained. "It was advanced via budget reconciliation for FY 2025, primarily to extend expiring tax cuts," he said. "Along the way, lawmakers included energy policy compromises reflecting Republican priorities, including fiscal restraint and reduced reliance on China, without dismantling the IRA's climate framework. This year, many feared a repeal of green tax credits under a unified Republican government. OB3 decisively rejected that path. Instead, it preserves the major clean energy credits, but with shortened timeliness and new conditions to gradually taper their scope. This approach, described by GOP leaders as a 'thoughtful phaseout,' aims to maintain investment certainty for current projects while reining in long-term costs and foreign dependence."
"The result," said Alperin, "is a set of adjustments that investors can plan around — far preferable to a sudden policy U-turn."
