President Donald Trump issued an executive order (EO) on July 7, 2025, regarding "Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Sources." The EO follows the signing into law of the One Big Beautiful Bill Act (OBBB). (A summary of the energy tax provisions in the law can be found in Holland & Knight's previous alert, "One Big Beautiful Bill Act to Scale Back Clean Energy Tax Credits Under Inflation Reduction Act," June 30, 2025.)
Among other things, the EO requires the U.S. Department of the Treasury secretary – within 45 days following enactment of the OBBB – to:
- issue new and revised guidance for wind and solar facilities under Section 45Y and Section 48E as deemed appropriate and consistent with applicable law to ensure that "policies concerning 'beginning of construction' are not circumvented, including by preventing the artificial acceleration or manipulation of eligibility and by restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built"
- take action as deemed appropriate and consistent with applicable law to implement the enhanced Foreign Entity of Concern (FEOC) restrictions in the OBBB
The initial U.S. House of Representatives version of the OBBB included provisions that terminated the Section 45Y and Section 48E tax credits for wind and solar facilities that were not placed in service by the end of 2027. The version of the OBBB passed by the U.S. Senate and House and signed into law by the president phased down and out the Section 45Y and Section 48E tax credits for wind and solar based on a beginning-of-construction standard. This EO follows news reports that the president promised such an order to secure the final votes needed in the House.
Holland & Knight Insight
The law around beginning of construction has been well
established across many technologies through several notices issued
by the IRS, and taxpayers have relied on such notices for more than
a decade. Although this EO states that the Treasury secretary will
issue guidance "consistent with applicable law," it is
unclear whether and to what extent the long-standing applicable law
for beginning of construction will be modified. Also unclear is how
the beginning-of-construction requirements for wind and solar
projects can materially differ from those for other technologies,
given that Congress used the same beginning-of-construction
language in the OBBB (and prior legislation) across
technologies.
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