The OBBBA is Law, Now What?
On July 4th, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. In our last newsletter, we discussed the potential implications the final bill could have on the Investment Tax Credit (ITC) and what it would mean for the future of the solar industry. Now that the Bill has become law, let’s break down exactly how it’s shifting the solar industry.
The good news – commercial solar projects can still qualify for the entire 30% ITC under these circumstances:
Your solar project must be placed in service by the end of 2027, OR
You can safe harbor your project by starting construction by July 4th, 2026.
If your project is safe-harbored, you may need to show continuous progress if the project is not completed within 4 years. If your project starts construction after 2025, it will need to abide by the Foreign Entities of Concern (FEOC) rules – we’ll expand on this below.
On another positive note, commercial storage projects are still eligible to receive the full 30% tax credit though 2033.
While having the finalized Bill does help us understand how we can secure the best possible outcome for your solar projects right now, there have been Executive Orders issued that aim to add further guidelines around the “beginning of construction” rules for safe harboring:
On July 7th, 2025, President Trump issued an Executive Order directing the Treasury Department to issue new and revised guidance concerning the “beginning of construction” policies.
There will also be further guidelines around the Foreign Entity of Concern restrictions.
These new guidelines will dictate the exact rules on how your project can be safe harbored, and there’s a good chance these rules will be harsher than what we know now.
The initial guidance is due by August 18th, but there is a possibility that they will miss that deadline.
Along with meeting the requirements for “beginning construction,” you will also need to abide by the Foreign Entities of Concern (FEOC) rules. Currently, here’s what the guidelines mention about FEOC:
Systems must have a minimum percentage of components, by value, that are not made in Covered Nations, by Prohibited Foreign Entities (PFEs), or by those with IP ties to PFEs.
This applies to all projects beginning construction in 2026 or later.
Minimum Non-FEOC Content:
2026: solar 40%, storage 55%
2027: solar 45%, storage 60%
2028: solar 50%, storage 65%
2029: solar 55%, storage 70%
After 2029: solar 60%, storage 75%
The OBBBA set many new guidelines that will affect the profitability of your solar and storage projects moving forward. Although the Executive Orders issued could make it even harder to qualify for the ITC, you still have a chance now to maximize the benefits of your system. The sooner you get your project started, the more advantageous it will be.
In other solar industry news, significant changes have been made to California Assembly Bill 942 (AB-942) regarding net energy metering (NEM) rules. Key provisions that could have negatively impacted solar users – reducing the NEM term from 20 to 10 years, the loss of NEM upon the sale of a solar property, and the exclusion of solar customers from receiving the climate credit – have now been removed.
The removal of these provisions marks a notable victory for NEM customers, and is a testament to the collective efforts of many who voiced their concerns. Your strong support and advocacy were instrumental in this achievement. The next hearing for the AB-942 is scheduled for August 18th.
Through all the changes in the industry, we’re here to be your renewable energy expert resource. Reach out today at (209) 668-5303 to start your project and maximize your profitability.
Find the One Big Beautiful Bill here: H.R.1 - 119th Congress (2025-2026): One Big Beautiful Bill Act | Congress.gov | Library of Congress
Read more about the July 7th Executive Order here: Ending Market Distorting Subsidies for Unreliable, Foreign‑Controlled Energy Sources – The White House
Find updates on and read about the AB-942 here: Bill Text - AB-942 Electricity: climate credits.