A new amendment added to a House-passed budget bill is raising urgent concerns within the renewable energy sector. The bill, which includes significant cuts to Inflation Reduction Act (IRA) funding, also introduces a critical new requirement: projects must break ground within 60 days of the bill’s signing to remain eligible for clean electricity production (Section 45Y) and investment (Section 48E) tax credits.

If this provision is upheld in the Senate and ultimately signed into law, experts say the rule would create a race against the clock for developers.

“It’s going to strain the renewable energy development community and the supply chain,” said Brian Murphy, EY Americas Power, Utilities and Renewables Tax Leader. “It’s going to trigger a scramble to undertake as much as possible in that 60-day window.”

While developers have long anticipated changes to IRA provisions, few expected such a tight timeline. According to Greg Matlock, EY Americas Tax Leader for Oil & Gas and Chemicals and Metals & Mining, the proposed changes—particularly the construction deadline—were not widely anticipated by industry players.

“From a commercial perspective, it’s not a unilateral decision most of the time on whether you can begin construction,” Matlock said.

Developers Blindsided by Speed of Proposed Changes

The surprise move by House Republicans reflects a more aggressive approach to dismantling portions of the IRA. The legislation, passed Thursday morning, adds urgency to already complex financing and development processes in the clean energy sector.

“I think there was a general expectation in the sector that the House bill was kind of the bookend of negotiations, and I think that amendment has clearly taken that and moved that goal post a bit,” Murphy said.

“That 60 days start-of-construction requirement, if that were to stay, is going to have a significant impact on projects that go forward … That’s a very tight timeline for any developer to try to move the needle and qualify.”

New Phaseout Timelines and Implications

If the bill clears the Senate and is signed by President Donald Trump, the 60-day eligibility deadline would go into effect immediately. Projects that begin construction within that period would then need to be placed in service by the end of 2028 to remain eligible for tax credits.

While the legislation largely preserves nuclear energy and carbon capture provisions, the picture is more complicated for clean fuels and advanced manufacturing. The House voted to end transferability of the 45Z clean fuel production tax credit and 45X advanced manufacturing PTC after 2027—creating another hurdle for developers reliant on credit markets to fund projects.

“It’s not just that a developer can unilaterally go out and provide proof of concept on their project, generate a credit and sell it in the open market to a willing buyer,” Matlock said. “You’re going to have to get a little more creative … It’s definitely going to put pressure on financing of projects, no doubt, and it probably changes the mix of development and the speed of development on electron versus decarbonization type projects.”

Limited Wins Amid Mounting Challenges

Murphy noted that one minor bright spot is that the bill maintains tax credit transferability for 45Y and 48E through 2032. But he cautioned against overstating the benefit.

“The preservation of tax credit transferability through 2032 for 45Y and 48E is somewhat of a small victory,” Murphy said. “But I put it in the small victory column because that 60-day clock combined with having to have projects in service by the end of 2028 – those are fairly significant limitations on how many projects are ultimately going to qualify for the credit.”

Matlock added that the proposed changes would likely reshape investment trends in the sector.

“If these changes to the IRA remain, I expect capital to be redirected, and a slightly different growth curve for different technologies that are treated differently under this revised framework,” he said. “It’s also going to change the mix of who can invest in these projects.”

“If those projects can’t sell credits after 2027, that changes the investor mix,” Matlock said.

What’s Next: All Eyes on the Senate

Now that the bill has been sent to the Senate, developers, investors, and supply chain partners are entering a period of uncertainty.

“It’s a little bit of wait and see,” Matlock said. “You’ve had public expectations that some things may get softened a little bit. But the House has been, I think, publicly fairly stern in saying, ‘We don’t want a whole lot of changes here.’ … Our expectation is there will be some level of change, just the depth and breadth of those changes is unknown at the moment.”

As the Senate prepares to deliberate, clean energy stakeholders are left scrambling to evaluate how quickly they can mobilize—and whether current projects can survive the tightening window.

Originally reported by Diana DiGangi in Construction Dive.