The landscape for energy-related tax credits is changing and if your company is in clean energy, manufacturing, or transportation, you’re going to want to pay close attention.

In late May 2025, the House narrowly passed a major reconciliation package that aims to make the 2017 Tax Cuts and Jobs Act permanent. But tucked into that package were sweeping rollbacks to many of the clean energy tax incentives originally expanded under the Inflation Reduction Act (IRA). While the bill still needs to clear the Senate, it’s already raising serious questions about which credits will survive, how long they’ll last, and what hoops companies will need to jump through to stay compliant.

Let’s break down what’s on the table and what it means for your business.

What’s Changes Could Take Place?

1. Shorter Timelines for Clean Electricity Credits (ITC & PTC)
Projects hoping to qualify for the Clean Electricity Production Tax Credit (45Y) and Investment Tax Credit (48E) must now begin construction within 60 days of the bill’s passage—and be placed in service by December 31, 2028. That’s three years earlier than previously planned.

2. Major Cuts to EV and Energy Efficiency Credits
Several popular credits are on the chopping block for projects starting after December 31, 2025, including:

  • The Clean Vehicle Credit (30D)
  • Used EV Credit (25E)
  • Alternative Fuel Refueling Property Credit (30C)
  • Commercial Clean Vehicle Credit (45W)
  • Home energy efficiency and solar credits (25C, 25D, 45L)

3. Clean Hydrogen Credit Eliminated (45V)
New hydrogen projects starting after 2025 will no longer qualify for this credit—delivering a blow to one of the fastest-growing segments of clean energy.

4. Nuclear Power Gets a Pass
Advanced and expanded nuclear facilities are spared from the accelerated construction timeline. Instead, they just need to be up and running by the end of 2028. The Nuclear Power Production Credit (45U) sticks around until 2031.

5. Advanced Manufacturing Credit Timeline Shrinks (45X)
Wind component manufacturing loses eligibility after 2027, and other production incentives under 45X end in 2031—a year earlier than under current law.

6. Clean Fuel Credit Extended—With Strings (45Z)
There’s a bit of good news here: The Clean Fuel Production Credit gets an extension through 2031. But there are tighter sourcing rules—feedstocks must come exclusively from the U.S., Canada, or Mexico. Companies with ties to certain foreign entities could be barred from claiming it.

7. Carbon Capture Credit Survives (45Q)
This one remains untouched. Projects can still claim the carbon sequestration credit through 2032.

Increased Scrutiny on Foreign Ties

Across the board, companies applying for many of these credits will now face tougher restrictions on foreign ownership and influence. New rules bar tax credit eligibility for:

  • Entities owned 10% or more by certain foreign groups
  • Companies with board seats controlled by foreign entities
  • Businesses making large payments (25%+ annually) to foreign-owned interests

These “foreign entity of concern” rules are complex—and they could knock out eligibility for a wide swath of companies that don’t even realize they’re affected.

What This Means for You

These changes, if passed by the Senate, could reshape how clean energy and manufacturing businesses plan their projects, and their tax strategies, for the rest of the decade. The message is clear: act fast, stay informed, and be ready to pivot.

Whether you’re building new facilities, investing in clean tech, or planning major upgrades, now is the time to reassess your tax strategy. If you wait until these rules are finalized, you may find yourself locked out of significant savings.

How KE Andrews Can Help

Navigating tax credit programs is tricky business and with these new layers of regulation and deadlines, it’s only getting trickier.

That’s where KE Andrews comes in. Our Credits & Incentives team specializes in helping companies tap into available credits, meet complex compliance requirements, and avoid pitfalls that could result in denied claims or costly delays. We stay on top of every tax code update, so you don’t have to.

Let’s talk about how we can help you build a forward-thinking strategy before the rules shift again.
Contact our Credits & Incentives team today to schedule a consultation.