October 2025 Newsletter

Federal and Wyoming Clean Energy Incentives:

What Investors Need to Know

Following this summer’s One Big Beautiful Bill (OBBB) legislation, prospective wind, solar and clean hydrogen projects in Wyoming have a narrower avenue to qualify for federal tax credits, due to both shorter time windows and more stringent supply chain requirements. Under IRA sections 48E (Investment Tax Credit) and 45Y (Production Tax Credit), large wind and solar projects will have to be either placed in service by year end 2027 or substantial and continuous work needs to be started by July 4, 2026. This is well shorter than the prior IRA provision of year end 2032 for full credits with a phaseout after. Projects under 1.5 MW in size including residential solar will adhere to the same dates but have a less onerous proof of work for the start date. Foreign Entities of Concern (FEOC) limitations were introduced for projects starting in 2026 and beyond. Clean hydrogen 45V tax credit window was similarly shortened to conclude in 2027 though FEOC limitations were not placed.

     Meanwhile, other technology specific tax credits were maintained or strengthened. Carbon sequestration and nuclear projects will both maintain the same timelines as specified in the Inflation Reduction Act (IRA). Meanwhile, carbon sequestration credit levels were increased for enhanced oil recovery processes, putting them on par with geological sequestration. Advanced manufacturing credit timelines were unchanged except that for wind components which was shortened substantially, while metallurgical coal gained eligibility through 2029. The Clean fuel production credit date was extended by two years to end in 2029 though the credits are now subject to domestic production requirements.  Across the provisions, increased restrictions were placed for foreign companies to claim tax credits and/or for how projects can source components from foreign soil.

     In state incentives, the Wyoming Energy Authority (WEA) continues to offer Energy Matching Funds for select projects directly related to Wyoming’s energy needs that advance research or commercial deployment. The most recent awards were offered in July to Big Blue Technologies for magnesium production and Relevant Gold for critical mineral exploration. According to the WEA (as of May 14th), 88% of funds have gone to fossil fuels and extraction while 9% and 4% have gone to nuclear and renewables respectively. The Wyoming legislature has appropriated a total of $205MM for the program in 2022 and 2023. With more than 75% of the funding now awarded, the future of the program is unclear.

     In summary, there remain significant opportunities for tax credits and matching funds for transformational energy projects though the landscape and timetables have shifted. The direction of travel for incentives has generally been away from wind, solar and hydrogen towards nuclear, clean fuels, and carbon capture applications.