Overview

• The law accelerates phase-outs of the 48E ITC and 45Y PTC for solar and wind, requiring projects placed in service by Dec. 31, 2027 unless construction starts by mid‑2026, which preserves full credits for up to four years and effectively through 2030 for timely starts.
• Treasury’s August guidance lets projects begun before Sept. 2, 2025 qualify via either significant physical work or the 5% cost test, but for starts after that date systems over 1.5 MW must perform physical work before July 4, 2026 while 1.5 MW and under can use the 5% test; further FEOC guidance is pending following a July 7 executive order.
• Foreign Entity of Concern restrictions tighten supply‑chain eligibility and a new Bureau of Land Management rule requires at least 20% of total costs to occur on-site for projects on federal lands to claim the full 48E value.
• The Section 25D homeowner credit ends in 2025 as 48E remains for leases and PPAs, with analysts expecting roughly 500 MW pulled into 2025, another 500 MW likely lost, and limited migration to third‑party ownership given tax‑equity constraints.
• Developers are front‑loading activity yet scaling back late‑decade pipelines, with MISO filings showing early‑phase interconnection attrition near 60% and forecasts from Wood Mackenzie and BNEF pointing to declines after 2027, even as standalone storage retains its original credit schedule through 2035.