Entrepreneur
Key Takeaways
- Recent federal tax changes are reshaping the energy landscape in ways that could materially affect how entrepreneurs plan investments and manage costs.
- With long-standing incentives shifting, business owners face a narrowing window to reassess 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 entrepreneur.
Tax incentives that helped entrepreneurs and investors embrace various types of clean energy investments are disappearing quickly. These are significant incentives that 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 credit for EV charging stations
The recently enacted One Big Beautiful Bill Act phases out these credits and many other incentives that have fueled clean energy investments over the past decade. These policy changes create a tight countdown clock for adjusting your business and tax strategies. You’ll need to act quickly to take advantage of existing benefits and create a plan for future energy-related investments.
Here’s a detailed action plan to help you navigate this transition and position your business for ongoing success.
Related: Which Candidate’s Tax Plan is Better for Small Businesses? Here’s What You Need to Know.
First, move quickly on any planned clean energy investments
If you’ve been considering installing solar panels, wind turbines or EV charging stations at your business or are interested in acquiring new property that could benefit from them, the key is to act fast. Under the newly enacted One Big Beautiful Bill Act, the investment and production tax credits are only available on projects that are placed in service after Dec. 31, 2027, if construction begins within a year of the bill’s passage and the EV charging unit tax credits end after June 30, 2026.
While they last, these tax credits can mean the government will practically pay for your investment, and your business will enjoy the benefits of lower energy costs for years to come. For example, I’ve seen clients experience significant savings from installing solar panels on their business property and multifamily real estate investments.
In addition, entrepreneurs can once again couple these tax credits with 100% bonus depreciation. The recent tax law changes reinstated this powerful business incentive, which allows businesses and real estate investors to deduct the full cost of all kinds of equipment purchases, renovations and other property improvements in the year they are made instead of spreading them out over time. Full bonus depreciation applies to qualified purchases made after Jan. 19, 2025.
This means that on a $100,000 installation, you may be eligible for a $30,000 tax credit, plus be able to fully deduct the $100,000 price of the installation.
If a clean energy investment is part of your business strategy, prioritize that project now. Work with your accountant or tax advisor to ensure construction begins within the required timeframe to lock in these benefits.
Next, 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’re often surprised to learn is that I never advocate for making a business decision solely for its tax benefit. Don’t let the tax tail wag the dog. Business strategy always, always comes first.
That means that while tax incentives for renewable energy are on the way out, the operational and reputational advantages of investing in this area may mean they are still the right move for your business. I recommend entrepreneurs work with their team to evaluate their current energy usage, future needs and the costs associated with renewable energy investments without federal incentives. If they make good business sense, then move forward as you would with any other investment.
Remember, 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, reach out to your tax advisor for a strategic conversation
The shift in American tax policy away from incentives for renewable energy will present challenges to many entrepreneurs who had been counting on the tax benefits as part of their business plans. But the change also makes this a good time to step back and reassess both your business and tax strategies. By acting quickly to take advantage of 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 renewable energy investments. They should be able to help you ensure you’re taking full advantage of all available tax benefits before they expire. Too many entrepreneurs treat their CPA as a higher-level version of a bookkeeper. Instead, consider them a valuable business advisor who can help you create permanent, tax-free wealth. The earlier you bring them in on strategic decisions, the better your results.
The tax law is always changing. The elimination of clean energy incentives just happens to be one of the changes you’ll need to watch in 2025. Stay informed and flexible, and you’ll continue to turn tax changes into valuable opportunities.
Key Takeaways
- Recent federal tax changes are reshaping the energy landscape in ways that could materially affect how entrepreneurs plan investments and manage costs.
- With long-standing incentives shifting, business owners face a narrowing window to reassess 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 entrepreneur.
Tax incentives that helped entrepreneurs and investors embrace various types of clean energy investments are disappearing quickly. These are significant incentives that include:
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