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What happened?
H.R. 1, the “One Big Beautiful Bill Act” (the Act), signed into law on July 4, 2025, used a scalpel, not a sledgehammer, to refine tax credits and incentives enacted by the Inflation Reduction Act (IRA) in 2022. As enacted, the Act shortens credit eligibility timeframes for wind and solar projects, alters sunset dates for other credits, and adds new and more stringent restrictions on the ownership and control by, or involvement of, foreign entities of concern (FEOCs) in credit-eligible projects. The Act also introduces new compliance, reporting, and penalty provisions for the FEOC rules, creating new complexity for energy and fuel project developers and investors.
See our Tax Insight, President Trump signs H.R. 1, the “One Big Beautiful Bill Act” for an overview of the tax provisions included in the Act.
Why is it relevant?
The Act’s changes to the IRA tax credits are nuanced in their application, creating potential traps for the unwary. Effective dates are staggered and, in some cases, accelerated — meaning that companies must act quickly to preserve eligibility for valuable tax credits. The addition of the FEOC rules creates significant complexity, requiring companies to perform a comprehensive review and analysis of ownership and control, interactions with related parties, and certain types of transactions to identify FEOC involvement that can jeopardize credit eligibility.
Action to consider
Companies should take immediate action to document eligibility for energy credits on current and future projects. Tax credits remain available to subsidize the cost of new investments in clean energy, but companies should review project timelines to determine whether to begin construction or place property in service sooner. The new FEOC requirements impose additional due diligence considerations, requiring companies to carefully review ownership and control structures as well as supply chain relationships.
Navigating the energy credit landscape after “One Big Beautiful Bill Act”
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