01 | Introduction and Background

Enacted on July 4, 2025, the One Big Beautiful Bill Act (“OB3 Act”) is the central driver of the recent shift in US energy policy. Although the legislation addresses a broad range of priorities, its revisions to clean energy tax incentives introduced under the Inflation Reduction Act (“IRA”) have drawn particular attention. While the new technology- neutral tax credits, § 45Y (production tax credit, or “PTC”) and § 48E (investment tax credit, or “ITC”), continue to support a wide range of low-carbon technologies such as geothermal, hydropower, nuclear, carbon capture, and energy storage, the OB3 Act introduces a faster step-down, often termed an accelerated “sunset” period, specifically for solar and wind. This adjustment is paired with updated timing and “Continuity Requirements,” which set the standards for how long and how steadily a project must progress from the start of construction to being Placed in Service (“PIS”), the point at which it is fully operational and ready for its intended use. Since enactment, developers and investors have focused on how these updated statutory provisions interact with existing IRS guidance and project-level timelines, as they recalibrate expectations under the revised framework.

Beyond these adjustments, the OB3 Act also adds stronger compliance obligations. These include tighter rules on materials sourcing (expanded foreign entity restrictions), stronger domestic- content verification, and more rigorous disclosure requirements. Executive Order 14315 and the IRS Notice 2025-42 formalize how these rules work in practice.

Taken together, it is important for investors to note that these changes do not eliminate clean energy incentives but reshape them, moving from broad, open-ended support toward more targeted, time- sensitive measures focused on reliability, domestic manufacturing, and competitive technologies. Investors should also continue to read such changes alongside the impact of increased tariff activity imposed on certain import activities in the US. While headline tariff impacts have eased, they continue to influence project economics, though market uncertainty is being moderated by supply chain absorption, strategic import substitution and onshoring, exchange rate movements, and corporate investment in markets outside the US.