The Trump administration has created sweeping changes and accelerated phase-outs to energy efficiency and clean energy tax credits through the new One Big Beautiful Bill Act (OBBBA).
Key implications of the OBBBA are:
Accelerated Sunset of Major Credits: The OBBBA rapidly ends or shortens the lifespan of most major tax credits related to residential and commercial energy efficiency and clean energy, including the Section 179D deduction for commercial buildings, which now only applies to projects that begin construction before June 30, 2026. The Energy Efficient Home Improvement Credit (Section 25C) and the Residential Clean Energy Credit (Section 25D) now both expire for services placed after December 31, 2025—shortening what were intended as decade-long incentives under the IRA.
Project Deadline Urgency: Builders, owners, and designers now have only a brief window—usually until the end of 2025 or mid-2026—to commence or complete qualifying energy projects and still claim the incentives. Large commercial or multifamily projects that cannot meet these deadlines will forfeit eligibility for substantial tax savings.
Impact on Planning and Investment: The strengths and opportunities created by these federal incentives is now qualified by risk: unless projects are accelerated, the anticipated financial benefits could disappear, undermining business cases for energy retrofits, new construction, or renewable generation.
Higher Bar for Tax-Exempt Entities and Transferability: The OBBBA introduces tighter restrictions on the transferability of tax credits, especially if any involved entity is a so-called “Foreign Entity of Concern,” and narrows eligibility for direct pay/elective payment options.
Market Disruption: The abrupt phase-out and the imposition of new deadlines have been described by tax and policy experts as causing a scramble among stakeholders to fast-track projects or to reassess investment decisions, in stark contrast with the previous legislative environment that provided stable, multi-year planning horizons for energy investments.
OBBBA provisions most likely to impact the lighting industry include:
Section 30C: Farewell to EV Charging Station Credits
The Section 30C credit has fueled the growth of EV infrastructure, like EV chargers, making it easier for businesses and communities to support electric vehicles.
The OBBBA, however, sets a sunset date: the Section 30C credit will vanish for property placed in service after June 30, 2026. For businesses planning to build charging networks or property owners adding chargers to attract EV-driving tenants, this deadline is critical. The repeal could slow the expansion of EV charging infrastructure, slowing the market for EV chargers.
Section 45W: The End of Commercial Clean Vehicle Credits
Section 45W is the unsung hero for businesses transitioning to cleaner transportation, offering a tax credit for purchasing qualified commercial clean vehicles, like electric buses or fuel-cell trucks. It’s been a catalyst for companies upgrading their fleets to greener options. It also creates further demand for EV chargers.
The OBBBA, however, pulls the plug, repealing the credit for vehicles acquired after September 30, 2025. This is a tight deadline, after this date, the cost of going electric could jump, making fleet transitions pricier, and slowing demand for EV chargers.
Section 179D: The Energy-Efficient Building Deduction’s Last Horrah
Section 179D is a deduction that rewards buildings for their energy-efficient projects, like; better roofs, efficient HVAC systems, or advanced lighting.
The OBBBA ends this deduction for projects beginning construction after June 30, 2026. For developers and property owners planning a green retrofit or new construction, this deadline looms large. Projects will need to start construction before July 1, 2026, to lock in the 179D deduction. Overall, this will reduce lighting retrofits.
Section 30D: New Clean Vehicle Tax Credit
For purchasers of new, qualified EVs or fuel-cell vehicles; must fall below certain income thresholds to access this incentive. This credit was available for vehicles purchased by 2033 and is now only available for vehicles purchased before Sept. 30, 2025. The impacts could further reduce EV charger demand.
The OBBBA dramatically curtails the federal tax incentives for energy efficiency and renewables, making immediate action necessary for anyone hoping to benefit from the tax credits. It creates new urgency and the closure of most tax-saving opportunities for energy improvements and construction, as early as the end of 2025, fundamentally shifting the landscape for architects, engineers, property owners, and developers. Overall, the OBBBA will reduce lighting retrofits and demand for EV chargers.
More information is available here.
Special thanks to Mark Lien.
Image: KnowFully Learning Group
You must be logged in to post a comment.