Federal Energy Incentives in 2026: What Expired, What Survived, What It Means

For most of the last three years, the working assumption in commercial real estate was that federal energy incentives were generous, broad, and durable through the early 2030s. The One Big Beautiful Bill Act, signed on 4 July 2025, changed that. Some provisions were repealed outright, some had their runway cut sharply, and some survived largely intact. The net effect for a CRE sponsor is that project sequencing now matters much more than it did — the difference between starting construction in June and starting in August can be the difference between a four-year window and an eighteen-month one.

What terminated around 30 June 2026

Three provisions that showed up regularly in commercial real estate underwriting reached their statutory end in mid-2026.

• Section 179D — the energy-efficient commercial buildings deduction. Terminates for property whose construction begins after 30 June 2026. This was a workhorse deduction for efficiency scopes in new construction and major retrofit, and its loss changes the after-tax maths on those scopes.
• Section 45L — the new energy-efficient home credit. Terminates for qualifying dwelling units acquired or initially leased after 30 June 2026. This mattered most to multifamily and build-to-rent developers who had underwritten the per-unit credit into their pro formas.
• Section 30C — the alternative fuel vehicle refuelling property credit, in practice the EV charging credit. Expired for property placed in service after 30 June 2026. Sponsors who were underwriting charging infrastructure against a credit of up to $100,000 per item of qualifying business property need to re-run those numbers without it.

If you have projects that were relying on any of these, the first task is a documentation exercise, not a modelling exercise: establish precisely when construction began, or when units were acquired or leased, and whether that timing puts you inside or outside the statutory line. That determination is fact-specific and worth getting professional sign-off on now rather than at filing.

What survived: the clean electricity credits, with a much shorter fuse

The technology-neutral clean electricity credits — the investment credit under Section 48E and the production credit under Section 45Y — survive. This is the pair that matters for solar and storage projects. But the timing rules for wind and solar tightened significantly, and the pivot date has now passed.

The rule as it stands: for wind and solar facilities that began construction on or before 4 July 2026, the ordinary continuity framework applies, giving a multi-year runway to reach placed-in-service. For wind and solar facilities beginning construction after that date, the facility must be placed in service by 31 December 2027 to qualify at all.

Begin-construction is a term of art. It is generally established either by starting physical work of a significant nature or by incurring a defined percentage of total project cost — the familiar physical-work and five-percent safe harbours — combined with a continuity requirement thereafter. The documentation standard is real: contemporaneous records, executed contracts, evidence of payment, and delivery records. If you believe you have a qualifying begin-construction date, make sure the evidence file exists and is organised, because you will be asked to produce it.

Note also that the legislation layered on sourcing and foreign-entity restrictions that were not part of the original Inflation Reduction Act framework. These affect both eligibility and who may hold or buy credits, and they are a live diligence item in any transfer transaction.

What survived cleanly: transferability

The single most consequential survival for mid-market projects is Section 6418 credit transferability. Earlier drafts of the 2025 legislation proposed sunsetting or repealing it. The final law preserved the framework, subject to restrictions including a prohibition on transfers to prohibited foreign entities.

That matters enormously for real estate sponsors, because it is the mechanism that makes an energy credit useful to a partnership that cannot absorb it. Instead of building a tax-equity partnership — expensive, complex, and generally uneconomic below a certain project size — a project can sell the credit for cash. The transfer market is active and reasonably well-developed, with established diligence norms, indemnity structures, and insurance products.

What this changes in practice

1. 01Timing is now a capital-structure input, not a construction detail. Where a project sits relative to the 4 July 2026 line changes its credit profile, which changes what a credit buyer will pay, which changes how much capital the credit contributes to your stack.
2. 02Documentation has become a financeability issue. Begin-construction evidence is now diligenced with the same rigour as title. Build the file as you go.
3. 03The non-federal incentives got relatively more important. C-PACE, state and utility programmes, and the green agency lending products did not change with the federal tax law, and they carry more of the weight now.
4. 04Re-underwrite anything that assumed 179D, 45L, or 30C. If those credits were in the pro forma and the project falls the wrong side of the deadline, the equity requirement changed and you need to know by how much.
5. 05For projects that can still qualify, monetisation planning should start earlier. A credit you intend to transfer is a source of closing capital, and buyers, insurers, and indemnity terms take time to line up.

Getting the sequencing right

The practical work here is unglamorous. Establish where each project sits relative to each deadline. Document the begin-construction position with contemporaneous evidence. Re-run the after-tax economics without the expired provisions. Then decide whether the remaining incentive value is best captured by using the credits, transferring them, or handing the whole generation asset to a third-party owner who can use them.

That last decision is a capital-structure decision, and it is worth making deliberately rather than defaulting to whatever your installer proposed.