An informed buyer’s guide to renewable energy tax credits in a shifting policy environment
Buyers of renewable energy tax credits in 2025 are navigating a unique opportunity-where current federal incentives remain secure, while future policy directions are still being debated. With shifting proposals from the House and a new draft from the Senate Finance Committee, many buyers are asking: which credits are safe to purchase, and what decisions are still unfolding in Washington?
At Armagh Capital, we’re actively engaged in the legislative process. Members of our team have been on Capitol Hill extensively over the last month. Here’s our current assessment of what buyers can count on versus what remains in flux.
What We Know
- Credits for 2024 and 2025 are secure The most important news: credits for 2024 and 2025 are governed by existing IRS rules and are not subject to retroactive changes. The latest Senate Finance Committee draft maintains this protection. Projects that begin construction before December 31, 2025 will retain the full 100% credit value, with phase-downs starting in 2026 and sunset provisions kicking in after 2027. Buyers can proceed confidently with current-year transactions.
- Carryback and carryforward rules remain untouched The Senate draft does not change the 3-year carryback or 20-year carryforward provisions, preserving maximum flexibility for tax planning.
- Transferability preserved While the House-passed bill proposed phasing out transferability, the Senate version fully preserves it-including for energy storage. This is a major win for market participants, allowing credits to continue circulating efficiently within the marketplace.
- Market fundamentals remain strong Transferability continues operating smoothly under the IRA framework. The market infrastructure for compliance, documentation, and risk mitigation is mature and functioning well. Credit savings remain non-taxable to buyers, keeping the core economic proposition intact. Premium credits from investment-grade sellers continue to clear rapidly.
What We’re Doing
- Monitoring phase-out structure The Senate proposal replaces the House’s 60-day construction-start deadline with a stepped reduction in credit value based on the start year. Projects starting by 12/31/2025 receive 100% of currently expected credit; those starting in 2026 receive 60%; 2027 projects receive 20%; and credits phase out entirely starting 2028. We are helping our developer partners plan accordingly to lock in full-value credits.
- Tracking FEOC restrictions The Senate version expands and delays “Foreign Entity of Concern” (FEOC) rules. Rather than outright disqualifying projects sourcing components from listed countries, it introduces a “material assistance” test that applies starting in 2026. This change adds complexity but offers more time for compliance. We continue working with developers and legal teams to clarify sourcing risks for future inventory.
- Understanding new content thresholds The Senate draft raises domestic content thresholds for projects claiming the 10% adder under Section 48E, gradually increasing required percentages through 2028. We are helping developers evaluate domestic sourcing strategies to qualify for the bonus.
What Happens Next in Washington
The Senate Finance Committee’s proposal is not final. It must first be included in the broader Senate budget reconciliation package and then passed by the full Senate. After that, the House and Senate must reconcile their two versions of the legislation-a process that typically involves negotiations in a conference committee. Once agreement is reached, both chambers must pass the final version before it goes to the President for signature. While there is political momentum to move this forward before Congress adjourns for August recess, negotiations could easily extend into the fall. In the meantime, current tax credit rules remain in effect.
The Bottom Line for Buyers
Act on current opportunities: Credits generated in 2024 and 2025 remain the most stable and attractive options. With transferability protected and full-value credits available for projects starting before the end of 2025, buyers have a compelling window to act.
Market activity remains brisk. Armagh Capital’s exclusive 2024 inventory is already fully allocated or sold. If your firm is seeking credits, we are happy to work our network to find a match.
Consider timing advantages: Buying earlier in the tax year allows for efficient use of credits across estimated payments, helping optimize cash flow and returns. Locking in now also protects buyers from potential sourcing restrictions and pricing changes expected in 2026 and beyond.
Today’s transactions operate under proven, stable rules-but those rules are beginning to change. Armagh Capital provides clarity, compliance, and strategic insight with every deal, helping you capture value while staying ahead of policy shifts.
For personalized guidance on navigating current tax credit opportunities and regulatory developments, contact Armagh Capital for a consultation.
