United States Senate Finance Committee Makes Changes to Clean Energy Provisions of the Proposed One Big Beautiful Bill

Phase Down: Projects must begin construction 60 days after enactment to be eligible - Projects must be placed in service by December 31, 2028 to be eligible - Immediate elimination of credits for solar or wind residential or rural leases

Advanced nuclear or
expanded nuclear facilities: Projects must begin construction by December 31,
2028

Non-Solar and Wind Technologies: Hard sunset for projects placed in service after 2032 (regardless of the amount of annual greenhouse gas emissions).

Solar and wind phase outs: Same 2032 placed in service deadline as other technologies, but phase down based on beginning of construction year as follows: 2026: 60% of credit, 2027: 20% of credit, 2028: credit eliminated.

Domestic content bonus percentage for 48E (aligning it
with current 45Y):
Before June 16, 2025: 40% phase-down
Facilities that commence construction later in 2025: 45% phasedown
Facilities that commence construction in 2026: 50% phasedown
Facilities that commence construction after 2026: 55% phasedown

Solar and Wind Leases: Retained the immediate elimination of credits for solar or wind residential or rural leases

Material Assistance: Changed definition of material assistance
from a specific set of
components/actions to a metric based on the share of total costs that are attributable to costs of
products/services from a PFE

Effective Date: Generally the
same as House bill, however, to be grandfathered out of the "material assistance" restriction,
taxpayer must begin
construction prior to the end of 2025 and applies for tax years
beginning after enactment.

Section 48 ITC and 45 PTC: FEPC provisions are not
applicable to Section 45 or Section 48.

Material Assistance: Changed definition of material assistance
from a specific set of
components/actions to a metric based on the share of total costs that are attributable to costs of
products/services from a PFE

Effective Date: Generally the
same as House bill, however, to be grandfathered out of the "material assistance" restriction,
taxpayer must begin
construction prior to the end of 2025 and applies for tax years
beginning after enactment.

Section 48 ITC and 45 PTC: FEPC provisions are not
applicable to Section 45 or Section 48.

Material Assistance: Changed definition of material assistance
from a specific set of
components/actions to a metric based on the share of total costs that are attributable to costs of
products/services from a PFE

Effective Date: Generally the
same as House bill, however, to be grandfathered out of the "material assistance" restriction,
taxpayer must begin
construction prior to the end of 2025 and applies for tax years
beginning after enactment.

Section 48 ITC and 45 PTC: FEPC provisions are not
applicable to Section 45 or Section 48.

Phase Down:
Solar energy equipment:
2026: 50%,
2027: 60%,
2028: 70%,
2029: 80%,
After 2029: 85%.

Battery components: 2026: 60%,
2027: 65%,
2028: 70%,
2029: 80%,
After 2029: 85%.

Critical minerals:
2030: 25%,
2031: 30%,
2032: 40%,
After 2032: 50%

Stacking: Eliminated ability of a taxpayer to stack 45X credits.

Effective dates - Credit denied if:
(i) specified foreign entity owner:
tax years after enactment
(ii) material assistance from a
prohibited foreign entity: facilities
beginning construction > 1 year
after enactment;
(iii) foreign-influenced
entity/"applicable payment" tests:
tax years beginning ≥ 2 years after enactment

Components produced ≥ 2 years
after enactment ineligible if they
(i) receive "material assistance" from a prohibited foreign entity or
(ii) are manufactured under a licensing agreement with such an entity valued > $1 million

Material Assistance: Changed definition of material assistance
from a specific set of
components/actions to a metric based on the share of total costs that are attributable to costs of
products/services from a PFE

Effective Date: Generally the
same as House bill, however, to be grandfathered out of the "material assistance" restriction,
taxpayer must begin
construction prior to the end of 2025 and applies for tax years
beginning after enactment.

Section 48 ITC and 45 PTC: FEPC provisions are not
applicable to Section 45 or Section 48.

Material Assistance: Changed definition of material assistance
from a specific set of
components/actions to a metric based on the share of total costs that are attributable to costs of
products/services from a PFE

Effective Date: Generally the
same as House bill, however, to be grandfathered out of the "material assistance" restriction,
taxpayer must begin
construction prior to the end of 2025 and applies for tax years
beginning after enactment.

Section 48 ITC and 45 PTC: FEPC provisions are not
applicable to Section 45 or Section 48.

Credits eliminated effective 180 days after enactment of
legislation

For qualifying vehicles under 14,000 GVW it is required that:
(1) These vehicles must meet the criteria in 30D(d)(1)(G) which
requires final assembly in North America, and
(2) For personal vehicles application of the limitation rules in
30D(f), e.g. vehicle cannot be used outside the US, VIN
requirement, recapture rules etc.