Business Energy Credits After the 2025 Law: What Survives
Which clean-energy incentives for businesses ended in 2025 and 2026, which remain with deadlines, and what a small business can still claim for solar, storage, vehicles, and charging.
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
The 2025 tax law cut short most clean-energy incentives for businesses. The commercial clean vehicle credit ended for vehicles acquired after September 30, 2025; charging equipment credits ended after June 30, 2026; and solar and wind credits require construction begun by July 4, 2026 or service by the end of 2027. Storage and geothermal credits continue longer.
On this page
What ended, and what continues?
| Incentive | Status after the 2025 law |
|---|---|
| Commercial clean vehicle credit (Section 45W) | Ended for vehicles acquired after September 30, 2025 |
| Consumer clean vehicle credits | Ended for vehicles acquired after September 30, 2025 |
| Alternative fuel refueling property credit (charging stations, Section 30C) | Ended for property placed in service after June 30, 2026 |
| Energy-efficient commercial building deduction (179D) and new home credit (45L) | Ended for 179D property whose construction begins after June 30, 2026, and for 45L homes acquired after that date |
| Clean electricity investment and production credits for solar and wind | Construction must have begun by July 4, 2026; otherwise the facility must be placed in service by December 31, 2027 |
| Investment credit for energy storage, geothermal, and other qualifying technologies | Continue; the Section 48E credit steps down for construction beginning in 2034 and ends for construction beginning after 2035, subject to the new foreign-entity limits |
| Residential energy credits for homeowners | Ended after December 31, 2025 (Section 25C for property placed in service, Section 25D for expenditures made, after that date) |
Projects that met the earlier deadlines keep their credits; the changes are prospective.
What can a small business still claim?
A rooftop solar system whose construction began on or before July 4, 2026, or that is placed in service by the end of 2027, still earns the investment credit — 30 percent of cost when prevailing wage and apprenticeship requirements are met (or for projects with maximum net output under one megawatt, measured in alternating current), with bonuses for domestic content and energy communities. Battery storage installed with or without solar remains eligible on the longer schedule. A charging station placed in service in an eligible census tract on or before June 30, 2026 still qualifies for the refueling credit; later installations do not.
What rules come with the credits?
- Prevailing wage and apprenticeship for the full credit rate on larger projects.
- Foreign entity restrictions added by the 2025 law on components and ownership.
- Basis reduction by half the credit for depreciation.
- Transferability. Many of these credits — including the Section 48E, 45Y, and 30C credits, but not the commercial clean vehicle credit — can still be sold to an unrelated buyer for cash (though not to a specified foreign entity), which lets a business with little tax liability monetize them.
- Recapture if the property is disposed of within five years.
How should a business plan now?
Document the begin-construction date for any solar or wind project in progress: for facilities that began construction on or after September 2, 2025, Notice 2025-42 allows only the physical work test, keeping the 5 percent safe harbor just for solar facilities of 1.5 megawatts or less. Count charging equipment only if placed in service by June 30, 2026, and for vehicles, treat purchases after September 2025 as uncredited unless a binding contract and payment were in place by September 30, 2025.
Frequently asked questions
Does the solar credit still apply to a business that leases its building?
The owner of the system claims it; a tenant that owns the panels can qualify.
Can the credit be used against the alternative minimum tax?
Only partly. The Section 48 energy credit is a "specified credit" that can offset tentative minimum tax, but the Section 48E clean electricity investment credit — which covers solar and storage placed in service after 2024 — is not on the specified-credit list. C corporations are unaffected because their tentative minimum tax is treated as zero for this limit.
Are state and utility incentives affected?
No. State credits and utility rebates follow their own rules, though rebates can reduce the federal basis.
Does Florida offer a state credit?
Florida has no personal income tax, so there is no state credit for individual owners. Instead, renewable energy source devices are excluded from property tax assessments (fully for residential property, 80 percent for nonresidential), and solar energy systems are exempt from sales tax.
Official sources
The IRS explains: “For purposes of sections 25E, 30D, and 45W, a vehicle is “acquired” as of the date a written binding contract is entered into and a payment has been made. A payment includes a nominal downpayment or a vehicle trade-in.” — Internal Revenue Service, FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, AND 179D under Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill (OBBB), https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb
The IRS explains: “These new Code provisions terminate the § 45Y credit and the § 48E credit, respectively, for applicable wind and solar facilities placed in service after December 31, 2027.” — Internal Revenue Service, Internal Revenue Bulletin: 2025-36, https://www.irs.gov/irb/2025-36_IRB
Next step
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