Clean Power Alliance Board of Directors
July 10, 2025

Clean Energy Impact of 2025 Federal
Tax and Spending Bill: First Look
July 10, 2025
Background
House passed Senate Version of 2025 Tax and Spending Bill – Signed by President on July 4 Clean energy provisions were highly contentious
For clean energy, Senate version was a slight improvement on the House bill – but only because House bill was unworkable in many respects
California Impacts (CPA specific impacts will vary)
• Electricity Costs: 5-10% increase over the medium term • Jobs: ~ 40,000 jobs lost or not created though 2030
• GHG Impacts: Emissions projected to stay flat nationwide, compared to ~45% reduction by 2030 – in tandem with other federal policies, may have state impact on reaching clean energy goals CPA Impacts
Tech and Project Type Winners/Losers
PPAs/ESAs
Customer Programs
Federal/State Direct Customer Incentives (could impact load growth, EV adoption rates, etc) 2 Winners/Losers
3 “Winners” Losers
Energy Storage, Geothermal, Hydropower, Nuclear, Carbon Capture Solar, Wind (“Unreliable, Foreign-Controlled Energy Sources”) Fossil Fuels (“Known or forecastable energy supply”) Green Hydrogen (and potentially all forms of hydrogen depending on other federal government action regarding Hydrogen Hubs) Leasing, Tax Credit Transferability, Direct Pay Anything with China-dependent supply chains and/or Foreign Entities of Concern (FEOC) issues
Projects that are under construction
Projects not completed by end of 2027
Projects that start construction within the next 6-12 months (subject to new administrative guidance on “Construction Start” and “FEOC”) Electric Vehicles (and Fuel Economy Standards in General) Direct to Consumer Federal Incentives for Electrification and Efficiency Tariffs remain a significant wildcard, both for manufacturing inputs (i.e. steel, aluminum, copper, critical minerals) and finished products (i.e. solar panels, battery cells, HVAC equipment) Tax Credits and CPA Project Impact
For wind and solar, a new layered set of eligibility requirements for Tax Credits (48E & 45Y) based on when a project starts construction and when it is placed in service • Key Dates: 12/31/2025 construction start (no FEOC), 7/3/2026 construction start (new FEOC rules), After 7/3/2026 construction start (new FEOC rules and must be placed in service by 12/31/2027) For energy storage, geothermal, biomass and large hydro, full tax credits are available for projects that begin construction by 12/31/2033
• Projects are exempt from FEOC rules only if they begin construction by 12/31/2025 Definition of “Construction Start” is subject to July 7 Executive Order that seeks to tighten existing rules; Treasury guidance is expected in August All CPA’s current utility-scale wind and solar + storage projects are operational or have started construction and are generally deemed to be safe Half of CPA’s current utility-scale unbuilt stand-alone storage projects could meet the 7/3/2026 construction start date deadline; others are in earlier stages of development CPA has two new unbuilt geothermal contracts; one has started construction, other may be subject to FEOC
4 Customer and Programs Impacts
Some of CPA’s customer programs will be impacted; still evaluating the extent of impact • Power Ready: Round 1 relies on 48E Tax Credits and could be impacted depending on construction start dates; Round 2 is likely to be impacted
• Power Share: Existing projects rely on 48E Tax Credits, have already begun construction and are generally deemed safe; future project pricing could be impacted by FEOC/sunsetting of 48E/CPUC cost cap • Solar and Battery Access: No immediate impact but faces FEOC risk if projects are delayed • Workforce Development: Fewer future PPAs could impact program funding (3-5 years out) Many direct federal customer incentives will rapidly sunset • 30D/25E – Electric Vehicle Tax Credit ends 9/30/2025
• 25D - Residential Clean Energy Tax Credit (solar, batteries) ends 12/31/2025 • 25C - Residential Energy Efficiency Tax Credit (insulation, windows, HVAC) ends 12/31/2025 • 30C – EV Charging Infrastructure Property Tax Credit ends 7/4/2026 • 179D - Commercial Building Energy Efficiency Tax Deduction ends 7/4/2026 • CPA’s Sun Storage, Building Electrification, EV Programs: Could face reduced demand due to higher consumer costs
Working to ensure Energy Team will be a valuable resource to help customers navigate these changes
5 Questions