Post-OBBB math: The structural shifts shaping clean tech’s next decade

Day 4 wraps up our week-long series on the One Big Beautiful Bill Act (OBBB) with a look at some of the quieter, structural shifts to clean energy and climate funding.

These changes are less likely to impact decarbonization opportunities in the next couple of years — but they may shape the affordability and momentum of emerging climate technologies over the long run. 

---

Cuts to DOE deployment programs

A number of Department of Energy (DOE) initiatives will no longer have access to unobligated Inflation Reduction Act (IRA) funding. This includes the Loan Programs Office (LPO), clean heavy-duty vehicle support, use of low-carbon materials in transportation infrastructure, and new transmission development for offshore wind. While these programs weren’t expected to deliver near-term emissions cuts, they were positioned to de-risk long-term decarbonization pathways. 

---

Tax credits for nuclear, hydrogen, and geothermal

The OBBB maintains tax credits for nuclear and geothermal power. It tightens eligibility for the nuclear credit by disqualifying projects with certain foreign ownership and accelerates the phaseout of the hydrogen production credit (45V), moving the construction deadline from January 1, 2033 to January 1, 2028. 

This likely isn’t enough time for hydrogen to gain meaningful market traction. Take hydrogen fuel cell electric vehicles (FCEVs) — even with 45V incentives, they still face significantly higher up-front costs and total costs than conventional and even battery electric alternatives (see chart below). 

Analysis based on a real-world example using the CO₂-AIM model.

The nuclear and geothermal tax credits will maintain the momentum for the revival and expansion of two existing electricity generation technologies that are experiencing renewed interest as companies, particularly AI tech players, seek firm clean power for data centers. 

---

Continued tax credit for CCUS

The 45Q carbon capture (CCUS) tax credit remains in place, and the bill eliminates the lower-tier treatment for enhanced oil recovery (EOR), granting parity with secure geological storage. Ownership restrictions are applied here as well, excluding foreign-influenced entities. These changes preserve incentives for large-scale CCUS projects and may offer clearer economics for EOR-driven development. 

While near-term CCUS costs are still prohibitive for most businesses, 45Q will continue to support investment and technology development in hopes of making carbon capture economically attractive in future decades. 

---

Phaseout of manufacturing credits for solar and wind

The bill shortens the window for clean energy manufacturing tax credits. Wind components will no longer qualify after December 31, 2027. Solar credits remain on track to sunset in 2030, as under current law. The bill also adds sourcing restrictions, excluding components with material input from certain foreign entities, and blocks additional funding for the 48C manufacturing credit. 

These moves narrow the runway for domestic clean energy manufacturing, but are unlikely to immediately affect deployment. Most near-term solar and wind projects are still drawing on existing supply chains and previous credit allocations. 

---

Takeaway: Significant long-term potential impact. Low near-term disruption.  

Many of these provisions impact the support ecosystem for emerging clean energy industries rather than directly changing their economics for businesses today. Current costs still exceed market thresholds for capital-intensive technologies like hydrogen and CCUS, and incentives alone don’t shift that calculus.

But by altering the eligibility, timing, and financing structures for new development, the OBBB sets new guidelines that will influence where and how investment flows over the next decade. 

---

 🔧 Need help navigating the post-OBBB world?  

We work with financially motivated companies to navigate decarbonization and operational excellence opportunities with specificity and affordability in mind.   

Get in touch to learn how Rappel could help your business