The passage of the One Big Beautiful Bill Act (OBBB) marks a significant shift in U.S. fiscal, tax, and energy policy focus. With sweeping changes to clean energy incentives, tax structures, tax credit timelines, and capital investment rules, the bill presents both challenges and opportunities for businesses, investors, and advisors in the clean energy sector.

As policy and market dynamics change under OBBB, valuation advisory services (VAS) play a critical role in helping clean energy businesses assess asset value, support transactions, and plan strategically. These services provide clarity and defensibility across evolving tax credit structures, investment incentives, and regulatory requirements.

Here, we’ll review OBBB policy changes and how VAS can help clean energy businesses with the transition.

Key provisions and industry impacts

1. Clean energy credit restructuring

• Wind and solar credits (Sections 45Y/48E) are now limited to projects that commence construction as of July 4, 2026 or are otherwise placed in service by December 31, 2027. This creates a near-term rush for developers to break ground on projects, accelerating investment timelines and potentially straining supply chains and permitting processes. The July 7 Executive Order directed Treasury to update guidance on beginning of construction for tax credits, which was issued under Notice 2025-42. Find our analysis of this new guidance here.
• Energy storage, geothermal, and hydro projects retain eligibility through 2033, with phased reductions thereafter. This extended runway provides more certainty for non-solar or wind projects, encouraging broader diversification in clean energy portfolios.

• Material Assistance sourcing restrictions (in addition to the two other “foreign entity of concern” (or FEOC) requirements), apply to foreign components, with thresholds tightening. Projects that anticipated relying on a significant portion of their component costs from “prohibited foreign entities” may face potentially increasing costs  as they pursue alternative suppliers in order to remain eligible for tax credits.

2. Tax changes and depreciation

• 100% bonus depreciation is restored permanently for qualifying property placed in service after Jan 19, 2025. This significantly improves after-tax cash flow for capital-intensive industries, incentivizing new investment in equipment, infrastructure, and clean energy assets.
• MACRS 5-year depreciation is preserved for Sections 48E and 45Y-eligible renewable projects, reversing earlier Senate proposals. This maintains a favorable tax treatment for clean energy developers, preserving project economics and investor appetite.

3. Transferability and market liquidity

• Tax credit transferability remains intact, with expanded eligibility (e.g., Section 40A agri-biodiesel credits). This opens new liquidity options for project sponsors and provides access to a growing secondary market for tax credits, attracting more nontraditional investors.
• Restrictions on foreign entities limit who can buy or benefit from credits. This could reduce the pool of eligible credit buyers, impacting pricing in the tax equity market. 

4. Opportunity Zones and New Markets Tax Credits 

• Opportunity Zones and New Markets Tax Credits are made permanent, with enhanced rural incentives. This stability encourages long-term investment in underserved areas, supporting real estate, retail, and industrial development in both urban and rural communities.

Clean energy valuation strategies

Valuation advisory services (VAS) offer critical support for navigating financial and regulatory complexity, especially amid policy shifts like the passage of OBBB.

1. Valuation for assets that generate tax credits

• With expanded transferability and new credit types, VAS will be critical in:
  • Fair market valuation of assets that generate tax equity and transferable tax credits.
  • Structuring and pricing related to tax credit sales and flexing different 
  • Audit defensibility and compliance documentation. 
  • Cost segregations to support depreciation and ITC classifications
• As the market for transferable credits grows, clients will need defensible valuations to support transactions, financial reporting, all to withstand IRS scrutiny, especially for credits with variable eligibility.
• Assist in evaluating structures utilizing fair market values in nuclear, geothermal, battery, RNG, and hydropower (and still solar and wind in the short term).

2. M&A and transaction advisory

• Expect increased deal activity in clean energy, infrastructure, and manufacturing sectors and sponsors sell projects to well capitalized developers who can accelerate development timelines.
• VAS will support:
  • Due diligence
  • Purchase price allocations (PPAs) for tax and GAAP
  • Goodwill impairment testing
• Buyers and sellers will need valuation support to quantify the impact of tax credit eligibility on deal pricing, especially in sectors where credits represent a material portion of enterprise value.

3. Valuations and cost segregation for 80/20 repowering

• Repowering projects are on the uptick as they have the advantage of not having to wait for permission to interconnect.
  • Valuation of the reused equipment
  • Assistance with the 80/20 computation
  • Cost segregation of the new build capex

4. Strategic advisory and scenario planning

• Businesses will need help navigating:
  • Credit phaseouts and safe harbor deadlines 
  • Capital planning under new depreciation and bonus rules. Bonus depreciation makes cost segregation studies more critical than ever, as certain MACRS property will qualify for 100% bonus depreciation 
  • Valuations and sensitivity analyses related to long-term tax equity structures

• As policy shifts accelerate, VAS will be instrumental in helping businesses model multiple scenarios and make informed investment and financing decisions.

To take advantage of beneficial OBBB changes and effectively deal with challenges, investors and sponsors should consult with advisors during this critical transition in U.S. energy policy. CohnReznick Valuation Advisory Services can help the clean energy sector navigate a transformed landscape of incentives, restrictions, and opportunities.