Key Takeaways: The One Big Beautiful Bill Act (OBBBA) accelerated development timelines across the renewable energy sector by creating a limited window for developers to preserve valuable federal tax incentives. As compressed timelines increase execution risk, developers should view intellectual property diligence as part of preserving project schedules and protecting incentive eligibility.
The OBBBA changed clean energy credits and incentives that were available under the Inflation Reduction Act. For example, the OBBBA eliminated tax credits for wind and solar facilities if the facilities become operational after December 31, 2027. However, the OBBBA provided a safe-harbor to preserve the tax credits for wind and solar facilities if construction began by July 4, 2026. The IRS subsequently clarified that the safe-harbor requires both the performance of “physical work of a significant nature” and continuity of that work through project development.
The deadline imposed by the OBBBA appears to have accelerated investment and project development activity as developers sought to preserve incentive eligibility. For example, the PwC midyear report shows an increase in U.S. power and utilities deals from $146.2 billion in all of 2025 to $216 billion in the first two quarters of 2026 alone. Additionally, despite reported stalled permits accounting for approximately $121 billion in wind and solar investment, the preliminary monthly electric generator inventory data published by the U.S. Energy Information Administration shows a surge in clean energy sources at the end of 2025 and the first quarter of 2026. For example, it is reported that approximately 8,500 MW of electricity generation capacity was added in the first quarter of 2026 with 58% of the new energy capacity additions being from solar and onshore wind production.
Accordingly, developers were under significant pressure to advance projects before the July 4, 2026 deadline. Accelerated development schedules can increase pressure on procurement, vendor selection, and diligence processes, creating risks that supply chain and IP issues may be identified later in the project lifecycle.
For projects that satisfied the requirement to perform the physical work of a significant nature, maintaining continuity of construction is critical. The IRS guidance identifies several disruptions that generally will not jeopardize compliance, including weather events, governmental delays, and certain manufacturing and construction delays. Notably, the IRS guidance does not specifically identify IP disputes, licensing deficiencies, or other IP-related complications among the examples of disruptions that generally will not jeopardize continuity requirements. Accordingly, intellectual property diligence should be considered to confirm IP ownership rights, address licensing arrangements, and assess potential IP infringement risks for critical project technologies, control systems, and other proprietary engineering solutions and to reduce the risk of delays that could affect project completion schedules.
For projects that did not satisfy the July 4, 2026 deadline, clean electricity tax credits may still remain available if the projects are placed in service by December 31, 2027.
Editor: Peter Law
Subscribe for News and Updates
