Over the past several months, Utah Clean Energy and countless others have been sounding the alarm over the tax and spending bill and its threat to America’s clean energy future. First and foremost, we want to thank the incredible chorus of voices that joined the call to stop this harmful legislation.
Despite our collective efforts, the bill passed last week. It delivers devastating cuts to healthcare, nutrition support for kids, and countless other services that millions of Americans count on. The bill also undercuts America’s clean energy progress by slashing vital tax credits for clean energy, home energy efficiency, and electric vehicles. At a time when we need to ramp up our clean energy momentum, this is a hard blow.
But let’s make one thing clear: even without federal tax credits, solar energy, wind energy, and energy storage remain the most cost-effective new energy to build! While a setback, this bill cannot stop the transition to a clean energy future. Utah Clean Energy is already looking forward, identifying new pathways to unleash Utah’s clean energy potential.
As the dust settles, our experts have taken a deep dive and outlined exactly what clean energy, energy efficiency, and EV programs are affected and when. Read on for a breakdown of where things stand. Note, some tax credits are expiring this year, but you still have time to get an electric vehicle or make efficiency upgrades to your home.
Provisions of Note in the Budget Reconciliation Bill passed July 3, 2025
Tax Credits:
Transportation
| Provision | Description | Final Bill Impacts |
| Clean Vehicle Credit (30D) | $7,500 tax credit for purchase of American made electric vehicles | Repeals credit after September, 2025 |
| Credit for Previously Owned Clean Vehicles (25E) | $4,000 point of sale tax credit for used electric vehicles for lower-income residents | Repeals credit after September, 2025 |
| Credit for commercial clean vehicles (45W) | Businesses and tax-exempt organizations can qualify for a $40,000 tax credit for electric vehicles | Repeals credit after September, 2025 |
| Alternative fuel refueling property credit (30C) | 30% of the cost of the refueling property up to $1,000 | Repeals credit at end of June, 2026(placed in service) |
Homes and Buildings
| Provision | Description | Final Bill Impacts |
| Energy Efficient Home Credit (25C) | Tax credit for up to 30% of energy efficient qualifying home improvements, up to certain annual limits | Repeals credit at the end of 2025 |
| Residential Clean Energy Credit (25D) | 30% tax credit for installation of clean energy resources such as solar, wind and battery storage | Repeals credit at the end of 2025 |
| Energy Efficient Commercial Buildings Deduction (179D) | Up to $5.00 per sq foot of commercial buildings with energy efficiency upgrades | Repeals credit at the end of June, 2026 (begins construction) |
| New Energy Efficient Home Credit (45L) | Tax credit of up to $5,000 per home for contractors who construct new energy efficient homes | Repeals credit at the end of June, 2026 |
Commercial Power Generation
Most notable is that tax credits for solar, wind, and clean hydrogen are rapidly phased out, impacting large renewable energy developers as well as the businesses, municipalities, and non-profits interested in procuring large-scale renewable energy.
In addition to the tax credit phase-out, the provision about foreign entities of concern (FEOC) is a significant hindrance to clean energy because the language is so broad that it could make it impossible to purchase equipment for any clean energy projects. The new bill raises the bar on these provisions and takes away exceptions for entities in rural areas who are not able to comply with these rules. Final guidance on FEOC restrictions will be issued by the treasury department in the coming months. UCE will provide updates on any new developments.
Please note that tax credits for nuclear, geothermal, and storage still extend out to 2033 and then phase out (which is not so different from what it was previously).
| Provision | Description | Final Bill Impacts |
| Clean Electricity Production Credit (45Y) | Up to 1.5¢ per kWh for electricity generated by zero-emitting facilities for 10 years after placed in service | Phase out on wind and solar tax credit: facilities beginning construction before end of 2027 are eligible for the credit. Strict FEOC restrictions apply for projects beginning construction after 2025. Phase out on other technologies: 75% in 2032, 50% in 2033, 0% in 2034 |
| Clean Electricity Investment Credit (48E) | Up to 30% credit for expenditures on zero-emissions electricity of standalone energy-storage facilities | Phase out on wind and solar tax credit: 60% for facilities beginning construction in 2026, 20% in 2027, 0% in 2028 Phase out on other technologies: 75% in 2034, 50% in 2035, 0% in 2036 |
| Credit for Production of Clean Hydrogen (45V) | Qualified clean hydrogen produced by the taxpayer is eligible for a per kilogram credit percentage of $0.60 | Repeals credit at end of 2025 (begins construction) |
| Advanced Manufacturing Credit (45X) | Tax credits for manufacturing certain eligible components and critical minerals within the United States. Credit amounts differ by component type. | Ends credit for wind components after 2027 |
| Advanced energy project credit (48C) | 30% investment credit for certified “advanced energy” projects that comes from a $10 billion pool. | Restricts unobligated funds from being issued and retires unused funds from pool. Projects with unused funds within 2-years will not be reallocated. Learn more here. |
We would like to clarify that Utah Clean Energy is not a solar company. We are a nonprofit organization that advocates for solar and other clean energy technologies, but we do not install or sell solar in any way.