The renewable energy industry has been waiting for clarity and now it has arrived. On August 15, 2025, the IRS released Notice 2025-42, which provides long-awaited guidance on what qualifies as the “beginning of construction” for renewable energy projects under the One Big Beautiful Bill Act of 2023.
This notice is pivotal for developers, tax professionals, and investors seeking to secure tax credits under IRC §§45Y (Clean Electricity Production Credit) and 48E (Clean Electricity Investment Credit).
For developers and tax advisors, the impact is immediate:
Tax professionals working with renewable clients should immediately:
Notice 2025-42 is expected to become the defining reference for renewable energy tax compliance over the next decade. More guidance may follow, especially on transferability and prevailing wage/apprenticeship rules under the same credits.
Tax professionals advising energy developers, private equity, or infrastructure funds should treat this notice as required reading.
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