Navigating the One Big Beautiful Bill Act for renewable energy projects

The One Big Beautiful Bill Act (OBBBA) introduces significant complexities for renewable developers, particularly concerning clean electricity investment credits. Our latest article, authored by Shirley Chin of WTW and originally published in Tax Notes® Federal and Tax Notes® International on December 22, 2025, explains the intricate new Section 50(a)(4) recapture provisions and provides practical planning strategies to help your business thrive and avoid costly missteps.

This essential guide provides clarity on new tax challenges and offers actionable strategies.

Key takeaways for renewable developers:

• Understand the 100% recapture risk: Learn exactly when the punitive 100% recapture under Section 50(a)(4) is triggered, involving "specified taxpayers," "applicable payments," and "specified foreign entities" having "effective control."
• Identify your "specified taxpayer": Pinpoint which entities in your tax equity structure (project company, Class B member, etc.) are at risk of triggering recapture and understand why this distinction is crucial for compliance.
• Master strategic structuring: Discover how to structure contracts and licensing agreements to proactively avoid recapture traps by clearly separating payment responsibilities from tax credit claims.
• Navigate prohibited foreign entity rules: Get clear on restrictions related to "prohibited foreign entities" and learn how to safeguard against unintentionally granting them "effective control" over your facilities under Section 50(a)(4).
• Optimize debt arrangements: Understand the critical role of unsecured debt or carefully crafted forbearance agreements to prevent lenders from inadvertently gaining control and triggering recapture scenarios.

Empower your projects in the new year

The OBBBA presents both challenges and critical tax planning opportunities for renewable energy financing. Equipping yourself with the right knowledge is key to mitigating risks and ensuring the long-term success of your projects.

To fully grasp the nuances of interpreting Section 50(a)(4) and apply detailed planning tips for your specific circumstances, download the full article today.

Author

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Shirley Chin

U.S. Head of Tax Insurance

email Email phone +1 415 914 5016

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