Post-OBBB Wind and Solar Credit Pitfalls to Avoid

Tax attorney Ryan Phelps was quoted in a Thomson Reuters article about how the One Big Beautiful Bill Act (OBBB) and recent IRS guidance are reshaping eligibility strategies for clean energy tax credits, particularly for wind and solar projects. The article summarized comments from a panel Mr. Phelps moderated during the American Bar Association's (ABA) Tax Section's 2025 Virtual Fall Meeting. It outlined accelerated termination dates for credits under Sections 45Y and 48E of the Internal Revenue Code (IRC), elimination of the 5 percent safe harbor for most projects beginning construction on or after Sept. 2, 2025, tighter continuity standards and heightened scrutiny under the physical work test. As panelists explained, these factors are pushing developers toward clearer on‑site activities and meticulous documentation, especially to establish beginning of construction (BOC). Mr. Phelps also flagged practical risks such as inadvertently starting construction, defects in binding written contracts (including with subcontractors) and navigating the new "continuous program of construction" requirement.

"I do think there's going to be more and more on‑site work being completed to establish BOC over the next year or two," he said.

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