Renewable energy developers are moving forward for now, but cautiously, with projects despite unanswered questions about recently enacted restrictions on foreign investment, McGuireWoods San Francisco partner Marc Nickel told Infralogic in a Sept. 3, 2026, story.
Investors and developers are grappling with new restrictions on clean energy tax credits enacted as part of the “One Big Beautiful Bill Act” (OBBBA), which create risk disqualifying projects associated with so-called “prohibited foreign entities” linked to Chinese sponsors, suppliers, or developers. While earlier Biden-era restrictions focused primarily on supply chain exposure in critical minerals mining, battery processing, and electric vehicle purchases, OBBBA significantly broadened both the universe of foreign entities covered and the range of relationships that could disqualify a project from eligibility for tech-neutral investment and production tax credits, Infralogic reported. The IRS has yet to issue guidance on key questions — including how regulators will determine whether a project is subject to “effective control” by a prohibited entity — creating significant barriers to the next wave of renewables investment.
Nickel, who advises clients on clean energy tax credits and incentives, said he hasn’t seen a slowdown in transactions. Developers are willing, for now, to absorb some risk while they wait for federal regulators to issue clear guidelines, he said.
“But I can tell you right now that law firms like ours and many of our competitors out there are writing tax memos and tax opinions telling people how to be the most conservative and comply with these rules,” Nickel said. “And I think that commercially, folks are getting comfortable that law firms can do the right analogizing through other parts of the tax code that are oftentimes directly referenced in [OBBBA].”