Major Tax Credit Changes Now in Effect: What Buyers Need to Know

How the One Big Beautiful Bill Act reshapes the renewable energy tax credit market

Signed into law on July 4, 2025, the One Big Beautiful Bill Act marks the most significant shift in clean energy tax credit policy since the IRA, and it carries immediate implications for buyers. This legislation brings new compliance requirements, compressed project timelines, and significantly different market dynamics starting immediately.

At Armagh Capital, we’ve analyzed the final legislation and are helping clients understand exactly what changed and how it affects their tax credit strategies. Here’s the complete picture for buyers.

What the New Law Changes

The legislation affects both the supply of credits and who can buy them. Here’s what changed:

• Shortened credit timelines – Solar and wind projects now have just one year to begin construction (by July 4, 2026) or must be operational by December 31, 2027 to qualify for credits. This represents a massive acceleration from previous rules. Energy storage, geothermal, and other technologies maintain longer windows – construction through 2033 for full credits – but will see gradual phase-downs starting in 2034 (75% rate) and 2035 (50% rate).

Bottom line: Future credit supply will be more constrained, affecting availability and pricing.

• Buyers face new FEOC compliance requirements – Starting in 2026, buyers of transferable renewable energy tax credits must prove they are not classified as Foreign Entities of Concern (FEOCs) This includes confirming that neither your company nor any of its controlling owners, board members, or major lenders are tied to countries like China, Russia, Iran, or North Korea. The test includes specific thresholds:

• 25% or more owned by a single entity (or ≥40% combined) from China, Russia, Iran, or North Korea
• Board seats or operational control held by prohibited foreign entities
• Financed with significant foreign debt (≥15%) from prohibited entities
• Long-term contracts that grant effective control to prohibited entities

Armagh Capital helps buyers understand and navigate FEOC-related considerations as part of the transaction process.

What Remains Unchanged for Buyers

1. 1. All 2024 & 2025 credits are unchanged – Existing credits generated under previous rules remain fully valid and transferable. The new law includes explicit grandfathering language protecting existing transactions and credits already earned.

• Fundamental market mechanics continue – 

1. 1. • Credits can still be carried back 3 years or forward 20 years
      • Transferability between unrelated parties remains legal and operational
      • Credit discounts remain non-taxable to buyers

• Market infrastructure stays functional – The compliance, documentation, and risk management systems built around IRA transferability continue operating normally. No changes to registration requirements, transfer procedures, or IRS filing processes.

Strategic Recommendations for Buyers

1. Act on current-year credits while regulations remain stable. The 2024-2026 window operates under established rules with proven compliance frameworks. With future supply more limited, these credits represent the final large pool available under stable, proven rules. Market participants are responding accordingly – premium credits continue clearing at an accelerated pace.
2. Prepare for 2026 FEOC compliance requirements early. Companies planning future purchases should assess FEOC compliance status well before 2026 to ensure smooth transactions. 
3. Evaluate multi-year credit strategies. With regulatory changes affecting future availability, buyers should consider securing multiple years of credits while current inventory remains accessible under grandfathered rules. Reduced supply from shortened timelines, combined with new buyer restrictions, will affect market liquidity and increase competition for available credits.

Armagh Capital provides market insight and compliance expertise with every transaction, helping you secure valuable credits while confidently navigating this shifting landscape.

For personalized assistance with current credit opportunities contact Armagh Capital.