The “Big Beautiful Bill” passed by Congress and signed into law by President Trump on July 4 contains provisions relevant to energy production. This comprehensive legislation includes several energy tax provisions that may impact electric cooperatives.

Notably, the bill leaves elective pay unchanged, ensuring that co-ops maintain access to tax credit benefits in the form of direct payments instead of credits because co-ops do not carry tax liabilities. Nuclear, carbon capture, battery storage, and hydropower projects will continue to qualify for existing tax incentives beyond 2030, providing long-term planning certainty. For wind and solar projects, however, the legislation phases out tax credit eligibility at a faster pace. Wind and solar projects that are already underway or begin construction within twelve months of the bill’s enactment will still qualify for the full value of current tax credits, regardless of when they are placed in service.

If projects do not begin construction by July 4, 2026, they must be placed in service by the end of 2027 to be eligible, which imposes a stricter timeline for development. Additionally, new requirements will apply to wind and solar developments concerning the sourcing of materials. To qualify for tax credits, these projects must avoid the use of components produced by “foreign entities of concern,” a category that includes countries such as China. This requirement reflects a growing national emphasis on domestic supply chains and energy security.

Protecting elective pay has been a key provision we have advocated for, and we are pleased to see it remain.  Additionally, gaining certainty on the timeline for the energy-related tax credits is a needed provision so the industry can make appropriate long-term decisions for the future.