Reunion's Market Monitor Q2 2025 Report

NOTE TO READERS: This content is current as of Friday, June 20, 2025. Given current discussions in the Senate, we will post updates here as they become available.

On June 16, the Senate Finance Committee released its much-anticipated draft of the budget reconciliation bill. The proposed Senate bill extends tax cuts from the Tax Cuts and Jobs Act of 2017, while rolling back parts of the Inflation Reduction Act to help cover the cost. This comes on the heels of the House’s version of the bill that passed the floor on May 22, 2025, by a vote of 215-214. After the Senate votes, it will return to the House, which may lead to further changes.

The proposed Senate bill provides short-term stability, which will result in a meaningful uptick in clean energy transactions throughout the rest of the 2025 and for the next several years

Since the House bill was passed, we have observed a significant uptick in interest from tax credit buyers. We expect increased activity through the rest of 2025 and for the next 3-5 years, given the proposed Senate bill provides clear guidance that near-term tax credits eligible under the IRA (and associated transfers) will be respected. Most notably:

• Tax credits will not be retroactively repealed for the 2025 tax year.
• Transferability is preserved for all credit types, with the caveat that tax credits cannot be sold to Specified Foreign Entities (SFEs).
• Legacy §45 Production Tax Credits (PTCs) and §48 Investment Tax Credits (ITCs), which began construction before 2025, are not changed.
• Many technology-neutral credits (§45Y or §48E), including energy storage, geothermal, hydropower, and nuclear, remain eligible for the full credit value, as long as construction begins by 2033.
  
  • Wind and solar projects specifically are subject to an accelerated phasedown schedule for projects that begin construction starting in 2026. Credits will be eliminated for projects that begin construction in 2028 and beyond.
  • The phasedown is based on the beginning of construction date. Wind and solar developers are rushing to start construction on projects in 2025, which should create a steady pipeline of projects for the next several years (projects have four years from beginning of construction to be placed into service for tax purposes).
• The §45X Advanced Manufacturing Production Credits (AMPCs) phase-down schedule is largely unchanged from the IRA. Components produced and sold through 2029 are eligible for the full credit, with a phase-down starting in 2030. Components produced and sold after 2032 are not eligible for credits. There are several meaningful exceptions:
  
  • The provision relating to the sale of integrated components that are produced and sold after 2026 is repealed, which may impact certain solar component manufacturers.
  • Wind components are not eligible for credits if produced and sold after 2027. Critical minerals have a longer eligibility period, with a phasedown in credits starting in 2031.
  • Critical minerals produced and sold after 2033 are not eligible.
• There are no changes in the phasedown schedule for the §45Q Credit for Carbon Oxide Sequestration and the §45U Zero-Emission Nuclear Power Production Credit.
• Complex Foreign Entity of Concern (FEOC) restrictions were introduced, which will add significant risks and compliance burdens. However, there are short-term exemptions (e.g., at the project level, FEOC restrictions are intended to apply to projects that begin construction after December 31, 2025).

Assume that the bill becomes law in September 2025, and a project begins construction by December 2025. A project that generates a tech-neutral credit (§45Y or §48E) will qualify for the full credit value, which can be transferred to a third party. We are already seeing a wave of projects rushing to establish start of construction before the end of 2025.

Unrelated to the adjustments in tax credit eligibility, many corporate taxpayers have held off on purchasing 2025 credits due to a lack of certainty regarding their 2025 tax liability. In particular, three outstanding tax policies have disrupted tax planning. The Senate bill proposes the following changes:

• §174 R&D Expenses: Reinstate immediate expensing of R&D costs for tax years from 2025 to 2029
• Bonus depreciation: Reinstate 100% bonus depreciation for property acquired after January 19, 2025, and before January 1, 2029 (a shift from the proposed House bill, which applied to property acquired through January 1, 2030)
• §163(j): Reinstate the more favorable calculation of the limit on the interest deduction under §163(j) for tax years beginning after December 31, 2024, and before January 1, 2030

The proposed changes will lower corporate tax liabilities, which will reduce the volume of credits that certain buyers can purchase. However, increased certainty on tax liabilities will have the overall impact of giving buyers confidence to move forward on tax credit purchases. In 2024, we saw a wave of buyers enter the market in the 3rd quarter of the year when they had clarity on their tax liabilities. We anticipate a similar dynamic this year, with many buyers coming into the market later in the year and competing for a dwindling number of tax credit opportunities.

However, the Senate bill creates medium to long-term uncertainty for the clean energy market, due to proposals such as FEOC restrictions and accelerated tax credit phasedowns

Major changes in the proposed bill include:

• Accelerated phasedown or reduced eligibility of clean energy tax credits, particularly tech-neutral credits (§45Y or §48E) for solar and wind
• Elimination of the credit for wind and solar leased property that would otherwise qualify for the residential credit under §25D
• The clean hydrogen production credit (§45V) is not available for facilities that begin construction after December 31, 2025
• FEOC restrictions, which will be difficult to comply with as currently written and may slow project development due to increased risk.

Summary of proposed tax credit phasedown

Solar and wind-related credits are subject to an accelerated phasedown, which will impact upcoming project development

Tech-neutral credits (§45Y and §48E) generally phase down in 2034 and are eliminated by 2036 based on when the project begins construction. However, the proposed Senate bill phases down tax credits for solar and wind on a significantly shorter timeline:

• Projects that begin construction in 2025 receive 100% of credit value
• Projects that begin construction in 2026 receive 60% of credit value
• Projects that begin construction in 2027 receive 20% of credit value
• Projects that begin construction in 2028 or later receive 0% of credit value

As a result, wind and solar developers are rushing to begin construction this year. Projects can establish start of construction through two well-established methods: the physical work test or the 5% safe harbor, after which they have four years to be placed in service. If developers don't start construction by the end of 2025, they will receive a significantly lower (or no) tax credits, which will have the impact of slowing new development from 2026 onward. Segue Sustainable Infrastructure forecasts 122 GW of project cancellations, resulting in $211 billion less investment in the grid as a result of the proposed bill.

There are several other important ways that wind and solar developer manufacturers are impacted by the proposed Senate bill:

• The credit for wind and solar leased property that would otherwise qualify for the residential credit under §25D is eliminated, which will cause developers to shift away from leases
• For §45X credits, wind components are not eligible for credits if produced and sold after 2027. Certain solar component manufacturers will also be impacted by the repeal of the provision regarding integrated components that are produced and sold after 2026, which potentially will limit the ability for manufacturers to stack credits from components that are integrated into larger products

Transferability is preserved, so long as the transferee is not a Specified Foreign Entity

There was no mention of transferability in the proposed Senate bill, meaning that tax credit transfers will be available for the same duration as tax credits. However, tax credits cannot be sold to Specified Foreign Entities (SFE), which is defined below:

• Meets any of the criteria outlined in Section 9901(6) of the William Thornberry National Defense Authorization Act (NDAA) for Fiscal Year 2021:
  
  • Is designated as a foreign terrorist organization by the U.S. Secretary of State under Section 219 of the Immigration and Nationality Act (8 U.S.C. § 1189)
  • Appears on the Treasury Department’s Office of Foreign Assets Control (OFAC) list of Specially Designated Nationals and Blocked Persons
  • Has been linked to criminal activity resulting in a conviction, as alleged by the U.S. Attorney General
• Is identified as a Chinese military company
• Is listed due to the Uyghur Forced Labor Prevention Act
• Is named under Section 154(b) of the NDAA for FY 2024 (specifically, paragraphs 1–7 on page 47 of Public Law 118-31)
• Is a foreign-controlled entity, meaning it is owned or influenced (directly or indirectly) by:
  
  • The government of a covered nation (specifically China, Iran, Russia, or North Korea)
  • Its agencies or instrumentalities
  • Citizens or nationals of a covered nation
  • Entities organized or headquartered in a covered nation
  • Or any entity controlled by the above (with “control” defined as owning 50% or more of voting shares, capital, or beneficial interest)

The bill includes complex restrictions to avoid benefiting Foreign Entities of Concern. The current draft will be difficult to comply with, potentially causing a slowdown in future clean energy projects. However, we don’t expect significant market disruption in 2025

Complex Foreign Entity of Concern (FEOC) restrictions will apply to §48E, §45Y, §45Q, §45U, §45X, and §45Z credits to ensure that the benefit of tax credits does not accrue to China, Russia, Iran, or North Korea. 

We do not expect significant disruption to the market in 2025. Most PTCs and ITCs currently in the transfer market began construction before 2025 and therefore qualify for the legacy §45 and §48 credits, which are not subject to FEOC rules.

For the newer §45Y and §48E credits, there is a transition period for complying with FEOC rules (e.g., projects that begin construction by the end of 2025 are not subject to FEOC at the project level. Rules to ensure FEOC compliance at the taxpayer level begin in 2026 and become stricter in 2028).

Most concerning for clean energy developers is the annual compliance requirement to ensure that “specified foreign entities” do not benefit from tax credits. There are also payment restrictions to ensure that prohibited foreign entities do not earn a certain amount of dividends, interest, compensation for services, rents, royalties, or similar payments. For §48E credits, these compliance requirements must be tested for 10 years, and any breach results in a full recapture of the §48E credits. A recapture period this long and this challenging to comply with will make it harder to raise financing or sell tax credits from projects that require FEOC compliance. As a result, we expect the clean energy industry to lobby for clarifications and adjustments to the FEOC restrictions.

Conclusion

We expect a strong, continued mobilization from developers, banks, utilities, and corporations to advocate against the early phasedown of tax credits, particularly related to solar and wind, and to create a workable and simplified version of FEOC regulations.

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Key takeaways from the session: 

• Short-term clarity on the ability to transfer tax credits: Repeals were not retroactive, and will give the market stability to move forward on near-term transactions. We expect an uptick in buyer activity for 2025.
• The Senate historically moderates changes proposed by the House: However, four House Republicans declined to support the bill on May 16, and have demanded additional IRA rollbacks.
• The clean energy industry will be focused on clarifying FEOC (Foreign Entity of Concern) restrictions, and extending transferability:
  • The proposed FEOC restrictions will be almost impossible to administer, and their complexity will slow clean energy deployment. The Senate is expected to simplify the rules.
  • Clean energy developers will rush to start construction to secure FEOC exemption, and preserve ability to transfer credits.

Link to the press release

ATLANTA, GA, UNITED STATES, March 27, 2025 /EINPresswire.com/ -- Dimension Energy (Dimension), a leading community solar developer, owner, and operator, today announced the close of a $128 million tax credit transfer purchase agreement with a Fortune 500 Company for a portfolio of 30 community solar projects totaling 122 MWdc. Reunion Infrastructure (Reunion) introduced the Fortune 500 buyer to Dimension and facilitated the transaction between the parties.

The projects will provide enough local solar energy to power over 17,000 households across Delaware, Illinois, Maine, New Jersey, New York, Pennsylvania, and Virginia. Dimension previously announced that First Citizens Bank, ING, National Bank of Canada, Comerica, Cadence, Denham, and Siemens provided construction financing for the 30-project portfolio.

“We’re thrilled to have this backing to quickly bring new generating capacity onto the grid and offer a low-cost energy choice to more Americans,” said Patrick Schaufelberger, SVP of Project Finance, Dimension Energy. “These are premier partners for Dimension – we look forward to working together to make clean energy work for everyone.”

“Tax credit transferability is a critical component of accelerating the deployment of clean energy projects around the country,” said Billy Lee, Co-Founder and President, Reunion. “We are proud to have supported this transaction and grateful for the opportunity to work with a top tier community solar developer such as Dimension.”

Community solar projects provide power to the nearly 50 percent of individuals who are unable to put solar on their homes or apartments. Dimension’s projects tap into existing infrastructure, generate power where it is needed, and provide low-cost clean electricity to surrounding communities.

“Dimension continues to lead the way in advancing community solar across the U.S.,” said Conor McKenna, CRC-IB Partner & Senior Managing Director. “We’re pleased to support them in navigating the unique complexities of DG solar and positioning their projects for long-term success.”

CRC-IB acted as the exclusive financial advisor to Dimension.

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About Dimension Energy

Dimension Energy is a leading community solar developer, owner, and operator. Dimension has executed more than 600 megawatts (MW) of community solar since its 2018 founding. The company plans to invest over $3 billion over the next 5 years, will have more than 800 MW in pre-construction-to-operations by the end of 2025, and 3.5 GW under development across 13 markets. In the communities where we invest, our projects deliver clean energy, local jobs, tax revenue, and savings, alongside other benefits including workforce development and educational opportunities. Dimension is making clean energy work for everyone. Learn more at www.dimension-energy.com.

About Reunion

Reunion facilitates the purchase and sale of clean energy tax credits. We have worked with major corporations to acquire over $3.5B in tax credits from solar, wind, storage, advanced manufacturing, and other clean energy projects.

Our team of clean energy finance veterans supports buyers and sellers through each step of the transaction process, with a focus on commercial negotiation, due diligence and risk mitigation. To learn more, visit www.reunioninfra.com and download our comprehensive handbook on clean energy tax credit transfers.

About CRC-IB

CRC-IB is a full-service investment bank providing industry-leading financial services across the energy transition. We leverage our capital markets and sector technology expertise to provide innovative project finance, capital raising, and M&A solutions, optimizing client outcomes in an ever-shifting energy landscape. Our belief since inception is that every transaction is a catalyst for change, every closing a step towards a cleaner future. To date, we have executed 360 project and corporate transactions for sustainable energy assets, valued at $78 billion in total. To learn more, visit www.crc-ib.com and connect with us on LinkedIn.

Reunion's Andy Moon speaks with two of the most insightful voices in clean energy — Keith Martin (Norton Rose Fulbright) and Jigar Shah (formerly of the DOE Loan Programs Office) — for an inside look at the current policy environment and market sentiment, and a big-picture discussion on what’s next.

• Introductions to Keith Martin and Jigar Shah [00:58]
• Reunion’s report on transferable tax credits in 2025, drawing from in-depth interviews with buyers [03:36]
• Policy and tax updates by Keith Martin [05:40]
• Trends in the clean energy sector, based on Jigar Shah’s experience at the DOE Loan Programs Office [14:23]
• Discussion of trends in nuclear energy [20:00]
• Impact of tariffs on the clean energy industry [22:43]
• Impact of potential changes to the IRA, with a focus on tax credits [26:00]
• Discussion of letter from 21 Republican members of Congress in support of the IRA, and legislative strategies for the clean energy industry [29:58]
• Importance of making voices heard in-district, rather than in DC [31:41]
• How stakeholders can prepare in case IRA tax credits are repealed [36:15]
• How federal agencies including DOE and IRS will be able to operate in the face of cuts from DOGE [37:58]
• Over 90% of new energy capacity in 2024 was clean; why doesn’t the clean energy industry act more dominant? [44:00]
• Most counterintuitive predictions for the next four years in clean energy [47:46]
• Wishlist requests for the Trump administration [52:36]

SAN FRANCISCO, March 11,2025 /PRNewswire/ -- A new report released today by Reunion, the leading tax credit transfer platform, shows that demand for transferable clean energy tax credits remains as strong as ever even in a fluctuating policy landscape.

Transferable Tax Credits in 2025: The Buyer Perspective, a comprehensive report based on Reunion's proprietary transaction data and an in-depth survey of senior tax executives at large corporations, shows that corporate buyer demand for high-quality clean energy tax credits remains robust, with 85% of buyers planning to purchase the same or greater volume of credits in 2025 as in the year before.

"We are seeing more active buyers in Q1 2025 than at the same time last year," said Andy Moon, CEO at Reunion. "The strength of buyer demand underscores the growing role of clean energy tax credits in corporate tax strategy and financial planning."

Key findings:

• Majority of buyers are maximizing credit purchases: A majority of surveyed buyers aim to offset the maximum amount of their tax liability allowed by law, with more than 80% targeting at least half their liability.
• Demand is helping keep prices up: At the end of 2024, market pricing for high-quality tax credits approached buyers' maximum willingness to pay. Credits from investment-grade sellers are also commanding a clear premium in the market.
• Fast-moving market: Competition for high-quality deals is fierce, with in-demand transactions often clearing in 1-2 weeks.

The report comes at a critical moment for the clean energy sector, which now employs over 3.5 million American workers and has added 400,000 jobs since 2020. As electricity demand rises — driven by factors such as AI and data center expansion — financing mechanisms like tax credit transferability created by the Inflation Reduction Act play an increasingly essential role in scaling clean energy solutions to meet the growing demand.

"Reunion is committed to helping America meet its growing energy needs by making clean energy tax credit transactions faster, simpler, and more reliable," added Moon. "We look forward to continuing to help buyers and sellers navigate a competitive market and ensure that clean energy projects can access the financing they need."

To access all the findings in the report, download Transferable Tax Credits in 2025: The Buyer Perspective. For buyers and sellers interested in tax credit transactions, visit Reunion to learn more.

About the Reunion Tax Credit Buyer Survey

Reunion surveyed active tax credit buyers with experience purchasing credits or in advanced stages of purchasing their first credits in January 2025. Respondents included senior tax executives at large corporations across multiple industries.

About Reunion

Reunion facilitates the purchase and sale of clean energy tax credits and has worked with major corporations to purchase over $3.5 billion in tax credits from solar, wind, storage, advanced manufacturing, and other clean energy projects in 2024.

Our curated marketplace features billions of dollars in high quality tax credit opportunities, and our team of clean energy finance veterans supports buyers and sellers through each step of the transaction process, with a focus on commercial negotiation, due diligence and risk mitigation. To learn more, visit Reunion.

Media contact: press@reunioninfra.com

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