One, Big, Beautiful Bill’s Impact on Electricity & Solar Industries
By: Mike Troupos
The One, Big, Beautiful Bill (OBBB) was signed into law on July 4, 2025, ushering in major impacts on both electricity and solar industries. These changes can be complex and nuanced, especially for companies with diverse energy portfolios. Here’s a break down of the changes in two buckets:
Details of the changes to Investment Tax Credit (ITC) under Section 48E of the Internal Revenue Code
Predictions how this impacts electricity price inflation over the coming years
Immediate Changes to the ITC:
The major change was the timeline of funding 48E. Under the Inflation Reduction Act (IRA), 48E was fully funded through 2032 before initiating its phaseout. With the OBBB, the following timelines are now in effect:
Project must be started by July 4, 2026 (Following the four-year community safe harbor issued by the Treasury Department)
OR if project is started after July 4, 2026, it must be placed into service by December 31, 2027
All projects started after July 4, 2026 AND completed after on January 1, 2028 do not qualify for the ITC
Congress may amend the above at any time including after the ITC expires in 2028
While there were major changes to the timeline, no changes have been made to the percentage of the tax credit (30%) or the bonuses for domestic content (10%) and energy communities (10%).
If you are interested in investing in onsite solar at your facilities, we suggest you begin your project before July 4, 2026. Foresight can assist in performing solar feasibility across the county and connect you with reputable solar developers that specialize in industrial manufacturing businesses. We believe there will be increased demand for onsite solar over the next two and a half years as companies rush to deploy before the ITC expires.
Predictions on Electricity Price Inflation:
In the first half of 2024, the US added approximately 20 GW of new electricity generation. Of this addition, 92% was comprised of solar (59%), battery storage (21%), and wind (12%). Natural gas was the only hydrocarbon generation added, comprising only 2% of the new generation. The present market infrastructure is oriented towards solar and storage because they are low cost (even without subsidies) and quick to deploy.
Even if the ITC is allowed to expire in 2028, the ratio of generation being added to the grid will, at worst, remain the same as 2024 and more likely skew even heavier toward solar and storage. Electricity prices have been increasing faster than inflation for many years, and the expiration of the ITC in 2028 will ensure that they continue to increase more quickly over the years to come. This law will not resurrect hydrocarbon energy generation because it is not economically advantageous or deployable quickly enough for hungry data centers. This change will simply push electricity prices higher.
Energy is only getting more expensive and complex for manufacturing companies to manage. It is critical that companies take a holistic, proactive approach to purchasing energy. Please connect with me if you are looking for an energy management partner that will help you understand market changes and keep electricity costs low in an inflating market.
