What OBBBA Could Mean for Large Energy Tax Incentive Projects

The One, Big, Beautiful Bill Act (OBBBA) was passed by the House of Representatives on May 22, 2025 and is awaiting Senate approval (or modifications) and signing by the President. This bill includes many changes to both individual and business income tax. If the OBBBA passes in its current form, it could have a major impact on tax-exempt organizations – including many country clubs – considering large energy tax incentive projects.

The Inflation Reduction Act (IRA), enacted in 2022, created several clean energy tax credits available to businesses, including tax-exempt organizations. Credits that are applicable to such organizations include the Investment Tax credit for Energy Property (solar, geothermal, small wind) and the Clean Electricity Investment Tax Credit for qualified energy storage technologies. Tax credits of up to 40% of the cost are possible if all requirements are met.

Under the final version of the OBBBA passed by the House of Representatives, most energy credits will be eliminated for projects placed in service after 2028 and there will not be a phaseout period. Moreover, construction on such projects must begin within 60 days of the OBBBA’s final passage. Under current law, the credits would not phase out in most cases until 2032.

Senators have indicated the possibility for changes to one or more of these cuts to the credits. While it’s possible the final bill may extend the eligibility date for starting construction projects relating to energy credits beyond 60 days after final passage of the OBBBA, it would be prudent for Clubs/Organizations to plan beginning construction as soon as possible on new projects to ensure credit eligibility.

We will continue to monitor the situation and provide updates as they become available. Contact PP&Co Tax Partner Scott Watters at swatters@ppandco.com if you have questions or need assistance with your specific situation.