Tax Credits for Cleantech Companies in 2026: What Survived the One Big Beautiful Bill Act

Many clean energy credits survive, but with earlier end dates and new sourcing rules. The One Big Beautiful Bill Act (OBBBA, P.L. 119-21, signed July 4, 2025) rolled back much of the 2022 Inflation Reduction Act. Here is where the credits cleantech startups ask about most stood when we checked in October 2026:

If your financial model was built in 2023 or 2024 around IRA credits, rebuild it. Several revenue lines that investors underwrote no longer exist for new projects.

Since 2025, the technology-neutral clean electricity investment credit (§48E) and production credit (§45Y) replaced the old §48 ITC and §45 PTC for most new electricity facilities. The §48E base rate is 6% of the qualified investment, rising to 30% if the project meets prevailing wage and apprenticeship requirements or has a maximum net output under 1 megawatt. Bonus credits of 10 percentage points each are available for domestic content and for projects in energy communities.

For wind and solar, the OBBBA added a hard stop. A wind or solar facility placed in service after December 31, 2027 gets no §48E or §45Y credit unless construction began by July 4, 2026. Notice 2025-42 tightened what "beginning construction" means for facilities that had not started before September 2, 2025: only the physical work test counts, and the 5% safe harbor is kept only for solar facilities of 1.5 MW or less. Since the July 4, 2026 date has passed, a new wind or solar project that did not start construction in time needs to be in service by the end of 2027.

Energy storage and other zero-emission technologies keep the credit longer, with a phase-down in the 2030s. They face "prohibited foreign entity" rules: facilities that begin construction after December 31, 2025 lose the credit if they include material assistance from a prohibited foreign entity, and specified foreign entities cannot claim it at all.

A labelled example: a startup places a $2,000,000 battery storage project in service that meets prevailing wage and apprenticeship rules (30%), sits in an energy community (+10 points) and meets domestic content (+10 points). The §48E credit would be 50%, or $1,000,000, if every requirement is documented and the foreign-entity rules are met.

§45X still pays a per-unit credit for clean energy components produced in the United States and sold to unrelated buyers. Statutory amounts include 4 cents per DC watt for solar cells, 7 cents per DC watt for solar modules, $12 per square meter for PV wafers, $35 per kWh for battery cells and $10 per kWh for battery modules ($45 per kWh for modules that do not use battery cells).

The OBBBA changed it in three ways that matter to startups:

• Wind energy components produced and sold after December 31, 2027 no longer qualify.
• Components that include material assistance from a prohibited foreign entity are excluded for tax years beginning after July 4, 2025, and specified foreign entities cannot claim the credit.
• Critical minerals now phase down from 2031 and end after 2033, and metallurgical coal was added at a lower rate through 2029.

Other components keep the original phase-down: 75% of the credit for components sold in 2030, 50% in 2031, 25% in 2032, and nothing after 2032. Because §45X is claimed on units produced and sold each year, supply chain documentation for the foreign-entity rules is now as important as production records.

Several credits that consumer-facing cleantech companies relied on are gone or nearly gone:

• New, used and commercial clean vehicle credits (§30D, §25E, §45W) ended for vehicles acquired after September 30, 2025.
• The alternative fuel vehicle refueling property credit (§30C), which covered EV chargers, ended for property placed in service after June 30, 2026.
• The energy efficient home improvement credit (§25C) ended for property placed in service after December 31, 2025, and the residential clean energy credit (§25D) ended for expenditures made after December 31, 2025.
• The new energy efficient home credit (§45L) ended for homes acquired after June 30, 2026, and the §179D deduction ended for buildings whose construction begins after June 30, 2026.

If your product pitch to customers leaned on any of these, update the sales materials. A homeowner or fleet buyer in late 2026 will not get them.

Transferability survived. Under §6418, a company that earns an eligible credit such as §48E, §45Y or §45X but has no tax liability can sell it for cash to an unrelated taxpayer. The OBBBA bars transfers to specified foreign entities, so buyer diligence now includes that check.

Credits sell at a discount to face value, and the discount depends on credit type, size, buyer demand and recapture risk, so get quotes rather than assuming a price. Buyers will ask for prevailing wage records, domestic content support, energy community analysis and, now, foreign-entity sourcing documentation.

Elective (direct) pay under §6417 is mostly limited to tax-exempt and government entities. For-profit companies can elect it for §45X, §45V and §45Q credits for a limited number of years, which can matter for a pre-revenue manufacturer. Confirm current availability for your credit before planning around it.

Cleantech startups can claim the §41 research credit alongside clean energy credits, as long as the same costs are not counted twice. Lab work, engineering salaries, prototype materials and testing for a new battery chemistry or grid control system can be qualified research expenses. Costs that go into the basis of energy property for §48E belong to that credit instead.

Timing usually keeps them apart: R&D happens before the product or plant exists, and §48E, §45Y and §45X apply to deployed assets or production. Map each cost category to one credit and keep the mapping in your workpapers.

Two OBBBA changes help here. Domestic research costs paid in tax years beginning after December 31, 2024 are deductible right away under §174A, and §280C(c) reduces that deduction by the R&D credit unless you elect a reduced credit. Startups with under $5 million in gross receipts and no receipts before the last five years can also apply up to $500,000 a year of R&D credit against payroll taxes.

We work with climate tech startups on the federal and state credits they can still use: R&D credit studies, the payroll tax election, §174A treatment of research costs, and the documentation behind §48E, §45Y and §45X claims (prevailing wage, domestic content, energy community and foreign-entity support). When selling a credit is the right move, we prepare the transfer election and the package buyers expect.

The value of these credits depends heavily on the project and the timeline, so we model them company by company rather than quoting a typical figure. Rules in this area moved quickly in 2025 and 2026; we checked the dates in this article in October 2026. This is general information, not tax advice for your specific facts.