The ‘One Big Beautiful Bill’ Arrives
What It Means for Your Capital Projects and Why You Need to Act Expeditiously on Clean Energy
“The only thing more expensive than education is ignorance,” a sentiment often attributed to Benjamin Franklin, holds profound resonance today as the “One Big Beautiful Bill Act” officially became law on July 4, 2025. This isn’t merely another piece of legislation; it’s a monumental recalibration of the tax landscape, poised to directly influence every future capital project for institutions spanning healthcare, higher education, and advanced manufacturing. While the Act does offer some welcome stability by extending or making certain permanent provisions from the 2017 Tax Cuts and Jobs Act (TCJA) and incorporating other anticipated business incentives, one of its most critical and immediate impacts lies in the profound alterations it introduces to several pivotal clean energy tax incentives. A comprehensive grasp of these significant shifts is not merely beneficial, but absolutely imperative for strategic planning, often demanding swift and decisive project acceleration.
Key Impacts and Essential Considerations
Bonus Depreciation Extended: A Strategic Advantage for Capital Investments
The Act amends the bonus depreciation phaseout (which is currently at 40%) and reestablishes and extends 100% bonus depreciation until January 1, 2030, for qualified property acquired and placed in service after January 19, 2025. This provision allows businesses to immediately deduct the entire cost of eligible assets in the year they are placed in service. This extension presents a substantial financial advantage for organizations planning investments in new equipment, facilities, or technology, potentially influencing the funding structure of projects on either a taxable or tax-exempt basis. Importantly, there are no retroactive changes to bonus depreciation for the 2023 and 2024 tax years.
Section 179D – Tax Deduction for Energy-Efficient Commercial Buildings: A Call for Immediate Action
A critical development to note is the termination of the Section 179D tax deduction for properties commencing construction after June 30, 2026. This deduction incentivizes energy-efficient improvements to commercial buildings’ interior lighting, HVAC, hot water systems, and building envelopes. This change will significantly impact projects scheduled for commencement after June 30, 2026. Organizations seeking to leverage these deductions—which can increase with higher energy savings and if prevailing wage and apprenticeship requirements are met —should prioritize advancing their construction timelines to begin before June 30, 2026. For illustrative purposes, in 2025, the deduction amounts range from $2.90-$5.81 per square foot (depending on prevailing wage and apprenticeship requirements). This deduction can be utilized by the designer and passed onto to the impacted institution.
Clean Electricity Investment Tax Credit (Section 48E) and Production Tax Credit (Section 45Y) Expedite Solar and Wind Projects
The Act sunsets both the Section 48E ITC and Section 45Y PTC for solar and wind facilities, with eligibility dependent on when construction commences or when the facility is placed in service. To remain eligible for these essential credits, projects must be placed in service on or before December 31, 2027, unless construction began by July 4, 2026. After December 31, 2027, solar and wind facilities will generally no longer qualify for these tax credits. This modification will notably impact solar projects closing after 2027. Furthermore, tax-exempt entities can utilize elective pay (direct pay) to receive a payment equivalent to the full value of the 48E ITC and eligible bonus credits until expiration.
What is the Section 48E ITC?
This “technology-neutral” credit applies to clean energy facilities achieving net-zero greenhouse gas emissions, placed in service on or after January 1, 2025. Eligible technologies include wind, solar, energy storage (such as batteries), and geothermal. The base credit is 6% of the qualified investment, with potential increases for meeting other requirements, such as prevailing wage and apprenticeship (up to 30%).
What is the Section 45Y PTC?
This technology-neutral tax credit for clean electricity production offers a 10-year credit period that commences when the facility is placed in service after December 31, 2024. The credit begins at a base rate of 0.3 cents per kilowatt-hour of electricity produced and sold to an unrelated person, with a higher base rate (1.5 cents) applicable to small facilities (maximum output less than 1 megawatt) that meet certain prevailing wage and registered apprenticeship requirements. The rate will be adjusted for inflation, and increases are available for domestic content or if located in an energy community. It is important to note that both Section 48E ITC and Section 45Y PTC cannot be claimed for the same property.
Note on Section 48E and 45Y: The credits remain viable for fuel cell, battery, and geothermal projects through 2033, with a gradual phase-out beginning in 2034 and full phase-out in 2036.
Section 30C – Electric Vehicle Tax Credits: Strategic Planning for EV Charging Infrastructure is Essential
The Section 30C credit for alternative fuel vehicle refueling property, including Electric Vehicle charging equipment, will terminate with respect to property placed in service after June 30, 2026. This means that following this date, EV charging stations will no longer be considered a scope savings incentive. Organizations planning to install EV charging infrastructure should consider accelerating these projects to be placed in service before July 1, 2026, to take advantage of the existing credit.
Our Recommended Actions for Clients:
- Leverage Bonus Depreciation: Fully capitalize on the extended 100% bonus depreciation for eligible capital expenditures in the coming years.
- Accelerate Energy-Efficient Building Projects: If your organization has plans for significant energy-efficient upgrades or new construction that could benefit from Section 179D, prioritize initiating construction before June 30, 2026, to secure the tax deduction.
- Expedite Solar and Wind Initiatives: For any planned solar and wind projects, aim for construction to begin by July 4, 2026, or ensure they are placed in service by December 31, 2027, to retain eligibility for the Section 48E ITC and Section 45Y PTC.
- Review EV Charging Infrastructure Plans: Advance any projects involving the installation of EV charging stations to be placed in service before June 30, 2026, to utilize the Section 30C credit.
The “One Big Beautiful Bill Act” undeniably reshapes the fiscal environment, presenting a complex interplay of both strategic opportunities and pressing deadlines. Unlike past legislative changes, the precise and immediate implications of this Act demand a proactive and informed response. By comprehensively understanding these pivotal shifts and acting with decisive strategic agility, organizations across healthcare, higher education, and advanced manufacturing are not merely adapting, but critically positioning themselves to optimize project planning, maximize financial outcomes, and maintain a competitive edge in a rapidly evolving economic landscape. The time for analysis alone has passed; the moment for accelerated informed action is now.
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