2026 Renewable Energy Industry Outlook

Tope Alake, “US renewable investments fell 36% on Trump’s policies, BNEF says,” Bloomberg, Aug. 26, 2025.

Deloitte analysis of S&P Global Capital IQ Pro, “Power plant units screener,” accessed Oct. 15, 2025

Diana DiGangi, “Clean energy developers hope for clarity in upcoming FEOC guidance,” Utility Dive, Sept. 8, 2025; FEOC (Foreign Entity of Concern)—entities tied to “covered nations” (China, Russia, Iran, and North Korea) via ownership, control, or jurisdiction per DOE guidance. Newly expanded sourcing thresholds generally apply to projects that begin construction in 2026 or later; ownership or influence-related FEOC screens can still affect who claims or transfers credits, depending on structure and timing.

Internal Revenue Service, Sections 45Y and 48E Beginning of Construction Notice, Aug. 15, 2025. 

Wind and solar are deemed the most impacted with the expedited phaseout of 45Y and 48E tax credits for projects beginning construction after July 4, 2026. Residential solar loses the 25D credit after 2025. Battery storage retains tax credits for projects beginning construction by 2035 but faces higher supply chain risks from aggressive FEOC restrictions and ongoing tariffs. The OBBBA also accelerates the phaseout of 45x advanced manufacturing production credits, covering facilities from critical minerals to renewables. Low-carbon hydrogen may still qualify for 10-year production credits under 45V if construction begins before 2028—two years longer than the House bill but five years shorter than the Inflation Reduction Act. Over 75% of green hydrogen projects under development are now at risk. Hydro retains the 45Y and 48E credits through 2033, as well as the elective pay provision for public utilities and co-ops. It was recognized as a firm baseload source along with nuclear and geothermal. Geothermal receives strong federal support with intact tax credits. The bill also accelerates the federal lease sales from a biennial schedule. Electric vehicle loses comprehensive subsidies, including 25E, 30D, 45W, and 30C, by late 2025 and mid-2026, on top of the elimination of corporate average fuel economy penalties and Environmental Protection Agency’s (EPAs) US$1 billion heavy-duty EV program. Carbon capture utilization and storage received an expanded 45Q, raising credit value up to US$180 per metric ton of carbon dioxide for enhanced oil recovery destinations. Nuclear receives full policy support, retaining most IRA credits with the original phase out of 2032, adding only the FEOC restrictions. It also received expanded transferability, bonus depreciation, and additional funding for small modular reactors for defense use. FEOC rules now apply across multiple credits for different technologies. See: Deloitte, “A closer look: Inside the new tax law,” July 8, 2025; David Brown, Christopher Seiple, Sylvia Leyva Martinez,…