The One Big Beautiful Bill Act (OBBBA), which was signed into law in July 2025, marks a major change in US energy policy that will have a big impact on the landscape that was created by the 2022 Inflation Reduction Act (IRA).
Proponents say the bill will help America become the world’s energy leader and be fiscally responsible. However, most energy analysts agree that it will severely slow the growth of some renewable energy sectors and probably make things more expensive for consumers.
In other words, it may be big, but it’s not beautiful – and in this blog, I’ll explain what the OBBBA means for the transition to clean energy in the US:
1. A sudden halt for wind and solar
The biggest change under the OBBBA is that the cornerstone tax breaks for wind and solar projects, the Section 45Y Clean Electricity Production Tax Credit (PTC) and the Section 48E Clean Electricity Investment Tax Credit (ITC), will be phased out quickly and completely.
• Shortened deadlines: To get the full tax credits, wind and solar projects must now either start building within 12 months of the bill becoming law (by 4 July 2026) or be in service by 31 December 2027. The IRA’s technology-neutral phaseout, on the other hand, wasn’t supposed to start until around 2032, so this is a much shorter timeline.
• Huge capacity cut: Analysts mostly agree that this policy will cut the building of new clean power-generating capacity by more than 50% from 2025 to 2035, putting hundreds of billions of dollars in private clean energy investment at risk.
The goal is clear: to get rid of what is seen as “unfair preferential treatment” for intermittent energy sources and put baseload power first. But people who don’t like this idea say it will make it harder to switch to cheaper power sources, which is why electricity prices have gone up so much recently.
2. Strengthening of domestic and geopolitical priorities
The OBBBA also adds new, strict Prohibited Foreign Entity (PFE) rules, which are controversial and will make it much harder for clean energy projects to get federal tax credits.
• Squeeze on the supply chain: The goal of these rules is to limit foreign influence, especially from countries that are seen as enemies, like China and Russia. Because China is currently the main supplier of solar panels and batteries around the world, these restrictions will make things harder and more expensive for developers who now have to quickly find new sources of materials.
• Stress on domestic manufacturing: The bill’s goal is to boost manufacturing in the US, but the sudden and sharp drop in US demand for solar and wind parts because of the end of the tax credit is likely to put a lot of economic stress on new American factories that were built because of the IRA.
3. A change in strategy to use other technologies
The OBBBA does not completely get rid of all IRA clean energy policy. It keeps or phases out incentives for technologies that are generally seen as “baseload” or supportive of domestic fossil fuel interests in a planned way:
• Who won: Nuclear, geothermal, and energy storage (batteries) mostly still qualify for the IRA’s original, longer timeline for technology-neutral tax credits (which will end around 2032). This shows that technologies that provide stable power output are a top priority.
• Support for fossil fuels: The bill also changes the Section 45Q tax credit so that projects that use captured carbon dioxide for Enhanced Oil Recovery (EOR) are on the same level as permanent geologic storage. This is a clear boost for the oil and gas industry.
4. How it affects people and the grid
People are already feeling the effects of politics. Democrats say that the OBBBA and other stop-work orders are directly responsible for the high utility bills.
• More expensive: The OBBBA raises the average cost of adding new power generation to the grid by making it harder for the cheapest and fastest-to-deploy energy sources (wind and solar) to work. What happened? Analysts say that the law will raise the average energy bills for households across the country.
• Uncertainty and instability: The policy change happened quickly and retroactively, which has caused a lot of instability in the market. This has led to companies canceling projects and job losses in the clean energy sector.
Looking Ahead
The One Big Beautiful Bill Act is a big change from the IRA’s plan for full decarbonisation. It creates a new framework that puts certain energy technologies and domestic sourcing first, but this comes at the expense of quickly deploying the most cost-effective renewables.
For developers and investors, the next few years will be a frantic race to meet the new, tighter deadlines for wind and solar projects. At the same time, the rest of the clean energy industry will be trying to figure out how to deal with the new foreign entity restrictions. In the end, the OBBBA will probably slow down the US energy transition and keep a close eye on the economic and geopolitical risks that are part of the global energy supply chain.
Tim Hall is the Co-Founder of OXBO and Headhunter and Recruitment Partner for Renewables.
October 8, 2025
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