On July 4, 2025, President Donald Trump signed H.R.1—the One Big Beautiful Bill Act (OBBBA)—into law, significantly altering many clean energy incentives introduced initially under the Inflation Reduction Act of 2022 (IRA).
Understanding these changes is critical for nonprofit higher education institutions considering or currently pursuing clean energy investments. It can help them take advantage of available benefits before key credits are phased out or repealed. Read on for more insight and considerations.
Key Repeals Impacting Higher Education
Several IRA credits and deductions have been repealed under the OBBBA, including:
- Sections 25E, 30D, and 45W: Clean vehicle credits (personal and commercial) will no longer apply to vehicles acquired after September 30, 2025.
- Section 30C: The Alternative Fuel Vehicle Refueling Property Credit, e.g., electric vehicle (EV) charging stations, ends for property placed in service after June 30, 2026.
- Section 179D: The Energy-Efficient Commercial Building Tax Deduction is repealed for projects starting construction after June 30, 2026.
Institutions still have a window to act before these deadlines. Accelerating planned purchases or construction may preserve eligibility for these credits.
Changes to Solar & Wind Credits: Sections 45Y & 48E
The OBBBA also modifies two cornerstone IRA credits: the §45Y Clean Electricity Production Tax Credit (PTC) and §48E Clean Electricity Investment Tax Credit (ITC), with implications for solar and wind projects:
- To qualify under the current four-year safe harbor, projects starting construction by July 4, 2026 must be placed in service by December 31, 2030.
- Projects starting after July 4, 2026 must be placed in service by December 31, 2027.
- New restrictions apply to projects involving foreign entities, including sourcing requirements and ownership structures. Institutions should review procurement and financing arrangements carefully.
Note: These changes do not apply to the legacy §45 and §48 versions of the PTC and ITC.
Additional Updates Relevant to Higher Education
Other clean energy technologies, e.g., battery storage, geothermal heat pumps, etc., must begin construction by 2034 to receive full credits, which phase out by 2036.
- Credit transferability remains intact, except for transfers to prohibited foreign entities.
- Direct-pay eligibility continues for tax-exempt organizations, including colleges and universities.
Strategic Planning Tips for Institutions
To preserve access to clean energy incentives, institutions should consider the following:
- Accelerate vehicle and charging station plans to meet repeal deadlines.
- Start solar and wind projects by July 4, 2026, especially if completion is expected after 2027.
- Source equipment domestically to qualify for the additional 10% domestic content bonus credit and avoid foreign entity restrictions.
- Engage tax advisors early to help ensure compliance with “beginning of construction” rules and boost credit eligibility.
Conclusion
Despite the sweeping changes introduced by the OBBBA, higher education institutions still have meaningful opportunities to benefit from clean energy incentives if they act swiftly and strategically. If you have any questions or need tailored guidance, please reach out to our IRA consulting team at Forvis Mazars.