The One Big Beautiful Bill (OBBB), signed into law on July 4, 2025, will have very serious impact on the renewable energy industry moving forward. This act repeals or reduces many clean energy incentives from the 2022 Inflation Reduction Act while expanding fossil fuel subsidies. But it isn’t just the renewable energy industry that will be impacted, everyday Americans will see and feel the negative ripple effect caused by this bill.
Key Rollbacks:
- Ends investment tax credits (ITC) for wind and solar unless construction begins by mid-2026. (Residential projects must be installed and commissioned by Dec. 31, 2025. Commercial projects must begin construction to safe harbor by Dec. 31, 2026.)
- Phases out residential clean energy tax credits (solar, EVs, heat pumps) after Dec 31, 2025.
- Terminates EV tax credits by Sept 30, 2025, and charger credits by mid-2026.
- Removes wind component credits post-2028 and tightens domestic content rules
- Imposes significant restrictions on projects relying on Foreign Entities of Concern. (SEIA unpacks this in more detail here.)
An executive order on July 8 added stricter construction definitions and promised further guidance within 45 days.
Impacts:
- Estimated 300 giga-watt loss in new energy capacity.
- Electricity costs may rise by $50 billion/year by 2035, hitting low-income families hardest.
- Up to 840,000 clean tech jobs could be lost by 2030, affecting sectors like residential solar installation.
Arkansas-Specific Effects:
- Loses key federal incentives that previously drove solar and battery projects.
- Local businesses (installers, EPCs) face demand drops.
- May lose competitiveness without state-level policy support.
What Arkansas Can Do:
- Launch state incentives, grants, and renewable standards.
- Support workforce training for solar and clean tech.
- Back low-income efficiency programs to replace federal aid.
The OBBB creates significant challenges for the renewable energy industry which will directly affect Arkansans’ bottom line in the months and years ahead. But through all this uncertainly one thing remains, renewable energy will play a key role in filling the ever-growing energy demands of our great country in the long-term.
