OB3 Is Here—Why 2025‑26 Could Be the Best Two Years Ever for Clean‑Energy Tax Credit Deals

The Senate’s “One Big Beautiful Bill Act” (OB3) is finally through Congress, and the headlines say it all: no repeal, no retroactive claw‑backs, and credit transferability survives intact. Below is a quick primer on what matters most for developers, investors, and anyone chasing clean‑energy tax credits.

 

Transferability Lives On

The IRA’s game‑changing feature—the ability to sell tax credits for cash—is untouched. Buying and selling ITCs, PTCs, 45X, 45Q or 45Z credits remains fully legal and mechanically identical to 2024. If you’ve been waiting for clarity before entering the transfer market, you have it.

 

A Giant Safe‑Harbor Pipeline

  • Wind & solar projects that start construction by mid‑2026 (12 months after enactment) lock in a four‑year construction window and aren’t subject to the 2027 placed‑in‑service cliff.
  • Projects already under construction before December 31, 2025, are exempt from the new foreign‑entity (FEOC) supply‑chain test.
  • Foss has worked with developer partners to identify a multi‑GW backlog of “grandfathered” projects which can provide years of closings with minimal new compliance friction—prime assets for tax‑equity and credit buyers.

 

Foreign‑Entity Rules—Strict but Delayed

OB3 bars projects from claiming credits if too much equipment or control comes from “foreign entities of concern” (chiefly China). Key points:

  • Gradual content thresholds (≥37.5 % non‑FEOC at first, ramping to 60 %).
  • Supplier certificates and IRS tables will simplify compliance.
  • Existing equipment orders made before June 16, 2025, are grandfathered. Projects that begin construction before December 31, 2025, are also grandfathered.

Big picture: pick trusted, well qualified advisors and prioritize projects that are grandfathered in without FEOC restrictions.

 

ITC vs. PTC: Mind the 10‑Year Recapture

Starting with 2028 placed‑in‑service dates, ITCs face a 10‑year claw‑back risk if a project later gives control to an FEOC party. PTCs do not carry that retroactive recapture risk. Expect some sponsors to pivot toward PTCs after 2028; savvy investors may work around the FEOC risk, but others may opt to purchased PTCs only after 2028.

 

Sweeteners & Extensions

  • 45Q CCS credit improved at $85 / metric ton for all storage or utilization pathways.
  • 45Z clean‑fuel credit extended two years (through 2029).
  • MLP status opens to CCS, hydrogen storage, geothermal and selected nukes.
  • Fuel‑cell ITC hurdles lowered through 2028; geothermal heat‑pump ownership issue fixed.

 

What to Do Now

  1. Lock in 2025 starts. Projects that break ground in the next 5 months capture full credits and avoid most new rules.
  2. Evaluate PTC structures. For 2028+ COD, PTC tax equity may become favored over ITCs. Foss & Company has a new PTC platform designed to be attractive for traditional ITC investors.
  3. Capitalize on new sectors. Many technologies outside of solar and wind have benefited from the changes—consider diversifying your pipeline.

 

Bottom line: OB3 closes the book on legislative uncertainty and opens a two‑year gold‑rush window for well‑structured, FEOC‑clean projects. Investors who move quickly can lock in peak‑value tax credits before the phase‑out clock starts ticking. Let’s get building.

Foss & Company is actively deploying capital and structuring deals across solar, storage, CCS, clean fuels and beyond—if you're a developer with qualifying projects or an investor looking to enter the clean-energy tax credit market, now is the time to connect with us. Reach out today to learn how we can help you capitalize on the OB3 opportunity.