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Key Takeaways
- Recent federal tax changes are reshaping the energy landscape in ways that could materially impact how entrepreneurs plan investments and manage costs.
- As existing incentives shift, business owners face a shrinking window to reassess their strategies and adapt to a new policy environment.
Recent changes in U.S. tax policy include a significant shift in energy policy that has the potential to impact every business owner.
Tax incentives that helped entrepreneurs and investors embrace different types of clean energy investments are quickly disappearing. These are significant incentives which include:
- a 30% investment tax credit for solar, wind and other renewable energy systems
- a production tax credit for energy produced by the systems
- a 6% tax benefit for EV charging stations
The recently passed One Big Beautiful Bill Act ends these credits and many other incentives that have driven clean energy investments over the past decade. These policy changes create a tight countdown for adjusting your business and tax strategies. You must act quickly to take advantage of existing benefits and create a plan for future energy-related investments.
Here you will find a detailed action plan to help you with this transition and position your business for continued success.
Related: Which Candidate Tax Plan Is Better for Small Businesses? Here’s what you need to know.
First, move quickly on planned investments in clean energy
If you are considering installing solar panels, wind turbines or EV charging stations in your business or are interested in acquiring a new property that could benefit from them, the key is to act quickly. Under the recently passed One Big Beautiful Bill Act, the investment and production tax credits are only available for projects placed into service after December 31, 2027, if construction begins within one year of the bill’s enactment and the tax credits for EV charging units end after June 30, 2026.
While they last, these tax credits can ensure that the government will virtually pay for your investment, and your business will enjoy the benefits of lower energy costs for years to come. For example, I have seen customers experience significant savings by installing solar panels on their commercial properties and investing in multifamily properties.
In addition, entrepreneurs can link these tax credits again 100% bonus depreciation. Recent changes to the tax code have reinstated this powerful business incentive, allowing companies and real estate investors to deduct the full costs of all kinds of equipment purchases, renovations and other real estate improvements in the year in which they are made, rather than spreading them out over time. Full bonus depreciation applies to qualified purchases made after January 19, 2025.
This means that on a $100,000 installation, you may be eligible for a $30,000 tax credit, plus you can fully deduct the $100,000 price of the installation.
If an investment in clean energy is part of your business strategy, prioritize that project now. Work with your accountant or tax advisor to ensure construction begins within the required time frame to capture these benefits.
Then reevaluate your long-term energy strategy
Entrepreneurs and investors come to me and my tax education company, WealthAbility®, because they want to reduce or eliminate their taxes. But what they are often surprised about is that I never advocate making a business decision solely because of the tax benefit. Don’t let the tax tail wag the dog. Business strategy always comes first.
This means that while tax incentives for renewable energy are disappearing, the operational and reputational benefits of investing in this area could still make it the right move for your business. I encourage business owners to work with their team to evaluate their current energy use, future needs, and the costs associated with investing in renewable energy without federal incentives. If they make business sense, proceed as you would with any other investment.
Please note that the 100% bonus depreciation still applies. You may also find state or local tax incentives or even incentives from your utility company to further offset the investment.
Related: 6 tips to invest in renewable energy now
Finally, contact your tax advisor for a strategic discussion
The shift in U.S. tax policy away from renewable energy incentives will pose challenges for many entrepreneurs who had counted on the tax breaks as part of their business plans. But the change also makes this a good time to take a step back and reassess both your business and tax strategies. By acting quickly to capitalize on existing benefits and focusing on long-term business goals, you can position yourself for success in this new landscape.
Schedule a meeting with your accountant or tax advisor to review your current and planned investments in renewable energy. They should be able to help you ensure that you take full advantage of all available tax breaks before they expire. Too many business owners view their CPA as a higher version of an accountant. Instead, think of them as a valuable business advisor who can help you create permanent, tax-free wealth. The sooner you involve them in strategic decisions, the better your results.
Tax law is constantly changing. The elimination of clean energy incentives happens to be one of the changes to watch in 2025. Stay informed and flexible, and you’ll continue to turn tax changes into valuable opportunities.