OBBB Highlights and Impacts: FSLR, ENPH, SEDG, and TSLA

After considerable turmoil on the policy front, we might have reached at least temporary stability with the passage of the One Big Beautiful Bill Act or OBBB or OBBBA. Tariffs remain an open issue although a reasonable and widespread expectation is that we are headed for a period of relative stability even on that front. This article is being written with an assumption that Country specific tariffs maybe stabilizing at about 30% for China, 20% for Vietnam, and at about 10% for all other countries. Any meaningful deviation from this assumption will make the article less useful.

With OBBBA, the solar and battery landscape in the US changes as follows:

1. Residential Solar and Battery ITC (§ 25D)

This applies to residential solar and battery systems purchased by homeowners with cash or loans, not leases or PPAs. The 30% residential solar tax credit expires on December 31, 2025. Homeowners must have systems installed or incurred expenditures by this date to claim the credit. This is almost a decade ahead of its previously scheduled phase-out.

Impact: This change will lead to a surge in installations this year but then there will be a cliff in demand after the rush. Customer owned system sales may plummet by some large percentage in 2026. More detail on the drop later in the article.

2. Residential Leased Systems & PPAs (§ 48E)

The final OBBB text restores credit eligibility for residential leases and PPAs through 2027. It is ironic that parasitic PPA companies benefit from an extended runway but not the homeowners.

Impact: Solar companies offering leased systems retain investment tax credit through 2027 but a demand cliff in 2028 is near certain unless the credit is restored by then.

3. Solar Tax Credit Phase‑Out (§ 45Y & § 48E)

100% PTC & ITC will be available only for projects that begin construction in 2025. This benefit mainly applies to commercial and utility scale projects which need to be completed in 4 years.

After that, 60 % credit for projects starting 2026, 20% for 2027 starts, and 0% thereafter. Another key is that projects not placed in service by the end of 2027 lose eligibility entirely.

Impact: Many current and planned projects are likely to be cancelled due to the inability to meet the deadlines. Projects could be revived if customers are willing to purchase energy at significantly higher prices.

4. Battery Storage ITC (§ 48E)

100 % clean energy ITC remains intact for energy storage projects starting until the end of 2033. After 2033, credits step down to 75% in 2034, 50% in 2035, and 0% in 2036.

Impact: Battery storage retains long-term support – this is terrific for battery projects. It is also a saving grace for combined solar and battery projects which will retain partial credit.

5. Changes to Advanced Manufacturing Credits (§ 45X)

The Advanced Manufacturing Production Credit benefits US-based solar component manufacturers will be phased out one year earlier than allowed by Biden administration’s IRA. This is done by removing the 25% phase-out step in 2032.

Impact: The change is minor but will require companies to adjust their long-term financial models. Marginal projects may get pushed out to 2029 as companies await the policies of the next administration.

6. Domestic Content Bonus

Domestic content restriction threshold jumps from 40% to 45% retroactive to June 16th. This bonus is only eligible for leased or PPA systems claiming the § 48E tax credit.

Impact: Developers need to source a higher percentage of components (panels, inverters, etc.) from the US. This makes it tougher for Chinese panels and inverters to qualify. Developers would have to find ways to increase domestic content.

7. Foreign Entity of Concern (FEOC) Restrictions

Projects that use components from FEOC-controlled or influenced companies lose access to the tax credit (under § 48E) retroactive to June 16, 2025. A new “material assistance” clause kicks-in beginning in 2026 which require compliance on various aspects of projects including ownership, financing, and supply chain thresholds.

Impact: Developers must monitor supply chains and financing as violations risk loss of credit. The impact could be severe with batteries which are largely build using components and minerals from China.

8. Federal Lands Fees

New rents and capacity fees imposed on solar and wind projects on federal lands.

Impact: Raises utility-scale project costs on federal land.

9. MACRS Depreciation Rules

The bonus depreciation (100%) remains in place, but MACRS (traditional accelerated depreciation) for clean electricity and storage placed in service is eliminated effective from the date the bill passed.

Impact: Removes a depreciation benefit and slightly increases the economic cost of projects.

10. Accelerated Repeal of Electric Vehicle (EV) Tax Credits

The bill ends the tax credits for new and used electric vehicles. The $7500 credit for new EVs (§ 30D and § 25E) will end for vehicles purchased after September 30, 2025.

Impact: This removal of incentives is likely to increase EV prices after September 30 and is likely to significantly slow the adoption of EVs in the United States. EV demand may spike temporarily in the current quarter ahead of the deadline.

OBBB Impact Summary

The language of the "One Big Beautiful Bill" represents a minor policy shift away from domestic manufacturing but a major policy shift in terms of demand generation. The faster phase out of the manufacturing credits makes new capacity additions slightly less likely than in the previous regime. The impact will be severe with demand-side incentives that in the past have fueled the growth of the solar and battery industries. While the new credit deadlines provide a temporary runway for developers, the industry now faces significant headwinds, particularly in the residential and EV sectors, starting in 2026.

The next section looks at the company specific details.