President Trump signed the reconciliation bill on July 4, 2025, making the most significant changes to IRA clean energy tax credits since the law’s 2022 passage. The bill is not a full repeal: Section 45X domestic manufacturing credits for solar components were preserved through 2032. But the central clean electricity incentives were substantially curtailed. Wind and solar projects lose access to the 45Y production tax credit and 48E investment tax credit unless they begin construction within 12 months of enactment (by approximately July 2026) or enter service before December 31, 2027. Projects that miss both thresholds lose IRA credit eligibility.
Additional credit changes: EV tax credits for personal and commercial vehicles terminate for vehicles acquired after September 30, 2025. The residential clean energy credit for rooftop solar terminates for installations after December 31, 2025. The clean hydrogen production credit is fully repealed. Foreign Entity of Concern restrictions are added for wind and solar projects beginning construction after July 4, 2026, targeting Chinese supply chain exposure. House Ways and Means estimated the combined credit cuts raise approximately $515 billion over 2025-2034.
The investor read requires separating the near-term from the structural. Projects in construction by July 2026 are protected. The 12-month window triggered an immediate acceleration push across the utility-scale development pipeline: projects that were 18-24 months from construction start are being pulled forward, with developers accepting higher carrying costs and EPC premiums to meet the deadline. Projects further back in the pipeline face genuine IRA credit loss and are being remodeled on merchant economics. The 45X manufacturing credit preservation is a significant carve-out for domestic manufacturers: First Solar, US-based cell producers, and domestic inverter and tracker manufacturers retain the credit that makes their cost structure competitive.