The One Big Beautiful Bill:
What It Means for Commercial & Utility-Scale Solar
The recently passed One Big Beautiful Bill Act (OBBBA) introduces significant changes to the federal tax credit landscape for renewable energy projects. For developers, property owners, and businesses considering solar, battery storage, or hybrid systems, understanding the new rules is critical to maximizing financial returns and ensuring compliance.
Key Provisions of the OBBBA
Here’s how OBBB impacts commercial solar projects:
Investment Tax Credit (ITC) Eligibility
The OBBBA outlines strict timelines for projects to qualify for the full 30 percent ITC:
- Projects that begin construction by July 4, 2026, and are placed in service by the end of the fourth calendar year are eligible for the full credit.
- Projects that begin after July 4, 2026, must be placed in service by the end of 2027 to qualify.
- There is no phase-out or partial credit. Projects that miss these deadlines receive zero percent ITC.
Battery Energy Storage Systems (BESS)
Standalone battery storage projects remain eligible for the 30 percent ITC through 2033. However, beginning in 2026, these projects must comply with Foreign Entity of Concern (FEOC) restrictions, which limit the use of components sourced from certain countries.
Construction Commencement Requirements
To qualify for the ITC, projects must meet the IRS’s construction commencement rules:
- The Physical Work Test is the primary method for proving construction has started, particularly for systems over 1.5 MWAC.
- Smaller projects may also use the Five Percent Safe Harbor rule.
- Projects must maintain continuous physical work to satisfy the Continuity Requirement, with allowances for certain delays such as permitting or weather.
Bonus Depreciation
The return of 100 percent bonus depreciation provides an additional financial incentive, allowing businesses to accelerate the recovery of project costs.
FEOC Compliance and Domestic Content
-
Starting in 2026, projects must avoid using materials from countries designated as Foreign Entities of Concern, including China, Russia, Iran, and North Korea. The thresholds for domestic content will increase annually through 2030, making early planning and sourcing strategies essential.
Planning Ahead: Three Scenarios to Consider for Solar
Timing matters. Here are three common starting points and how they affect ITC eligibility under the OBBBA:
Scenario 1: Before January 1, 2026
Projects that begin construction now have the most flexibility. They qualify for the full ITC and have until the end of the fourth calendar year to be placed in service. This window allows for thoughtful planning, permitting, and procurement.
Scenario 2: Starting January 1, 2026
These projects still have the same flexible construction window as Scenario 1 (until the end of the fourth calendar year to be placed in service). However, FEOC restrictions will now be in effect, so sourcing must be compliant.
Scenario 3: Starting July 4, 2026
Projects starting on or after July 4, 2026 must be placed in service by December 31, 2027 to receive the ITC and FEOC will be required. There is no grace period beyond this deadline. These projects will require accelerated schedules and strict adherence to compliance standards.
Best-in-class solar, microgrid, and storage projects delivered through the multi-trade strength of One Baker.
Baker Electric’s Commercial Solar Group helps businesses take control of their energy future with turnkey solar, microgrid, and storage solutions designed for long-term savings and sustainability. Leveraging the full capability of the One Baker multi-trade approach, we integrate engineering, construction, and project management to deliver high-performing systems on time and within budget. From rooftop to ground mount to canopy installations, we provide complete EPC services, permitting, utility coordination, and financial guidance. Our team’s proven expertise, deep industry knowledge, make us the trusted partner for organizations seeking reliable, cost-effective, and future-ready energy solutions.
WHAT THIS MEANS FOR OWNERS & DEVELOPERS
Sunsetting the Solar ITC: What You Need to Know Before the Window Closes
The Clock Is Ticking
You now have a limited window to break ground on solar projects before ITC benefits vanish. Delays in permitting, financing, or procurement could jeopardize eligibility.
Compliance Complexity Is Growing
From FEOC certification to evolving domestic content calculations, tax credit compliance is more complex than ever. Inaccurate reporting could trigger IRS penalties.
Storage is the New Opportunity
Battery projects remain a viable path for clean energy investments—with or without solar. Baker Electric can help design and deliver compliant, future-proof BESS installations.
How Baker Electric Helps You Stay Ahead
As a trusted electrical and renewable energy partner since 1938, Baker Electric offers unmatched experience in:
-
Commercial and utility-scale solar EPC services
-
Battery energy storage design and deployment
-
Tax credit safe harbor planning and documentation
-
Supply chain sourcing to meet domestic content and FEOC rules
-
Turnkey project execution under tight regulatory timelines
We work with developers, owners, EPCs, and institutional investors to protect project ROI and compliance under the new rules.
Act Now to Maximize Your Energy Investment
There is still time to secure the full 30 percent tax benefits — but the window is closing fast. Delays in permitting, sourcing, or breaking ground could mean losing access to critical incentives that directly impact your ROI.
Now more than ever, it’s essential to have a partner who understands the evolving policy landscape and can move quickly, decisively, and in full compliance.
Schedule a Consultation with Baker Electric’s Renewable Energy team today. We’ll help you evaluate your project timeline, optimize your procurement strategy, and ensure you're aligned with all current tax credit and FEOC requirements — before it’s too late.
TRUSTED PARTNER FROM ROUTINE TO COMPLEX
Baker Electric Supports Your Project End-to-end
Baker Electric is uniquely positioned to help clients navigate the complexities of the OBBBA. Our team brings deep expertise in renewable energy policy, project development, and compliance. We provide:
- End-to-End Project Delivery: From feasibility studies and engineering to procurement and construction, we manage every phase with precision and transparency.
- Strategic Planning: We help clients model construction timelines and financial scenarios to optimize ITC eligibility and bonus depreciation benefits.
- Sourcing and Compliance Support: We assist in selecting materials that meet domestic content and FEOC requirements, reducing risk and ensuring long-term viability.
- Schedule Management: Our experienced project managers work to align construction milestones with IRS requirements, helping you meet critical deadlines.
Partnering for a Clean Energy Future
The OBBBA represents a pivotal moment for clean energy investment. With the right partner, businesses can take full advantage of the incentives while avoiding costly missteps. Baker Electric is committed to helping clients build smarter, cleaner, and more resilient energy systems.
Ready to move forward? Contact Baker Electric today to discuss your project and ensure it’s positioned for success under the OBBBA framework.
It’s official: Southern California businesses & organizations are paying more for electricity than anywhere else in the country.
How can you make a meaningful difference to lower your electric bill? The most obvious answer is utilizing solar power. If getting solar has ever been in the conversation for your business or organization, there are two very important changes coming that you must know about before it’s too late.
