Everyone thought Trump would kill the IRA, then the House took a shot

What happened

After a relatively market-friendly draft from the House Ways and Means Committee, the House passed a much stricter version today. Here are the key changes:

• Clean electricity credits (ITC 48E and PTC 45Y):
  These two tax credits are central to clean energy deployment in the U.S. The Investment Tax Credit (ITC) subsidizes the upfront cost of solar, wind, and storage projects, while the Production Tax Credit (PTC) rewards ongoing power generation.
  Under the original draft, full credits were available for projects placed in service by the end of 2028, followed by a gradual step-down through 2032 (80% in 2029, 60% in 2030, etc.).
  The new amendment removes that ramp-down and replaces it with a hard cutoff: projects must begin construction within 60 days of enactment and be fully in service by the end of 2028 to qualify at all. Any project that misses either deadline receives zero credit. 
  This change shortens visibility and is expected to trigger a near-term rush to secure eligibility.

• Transferability:
  Previously set to phase out two years after enactment, tax credit transferability is now repealed immediately.
  This mechanism allowed developers to sell unused tax credits to third parties, broadening access to capital. Without it, most developers will need to rely on traditional tax equity or direct pay (available mainly for manufacturers), adding financing friction.

• FEOC restrictions:
  Restrictions related to “foreign entities of concern,” primarily targeting Chinese content, now apply starting in 2026 instead of one year post-enactment. This accelerates the compliance timeline and puts further pressure on supply chain localization.

• Nuclear:
  Advanced nuclear projects are exempted from the credit termination if they begin construction before 2029. Additionally, commercial nuclear production credits (Section 45U) are extended through 2032.
  While this helps mature projects, tight permitting and construction timelines still make this difficult for emerging SMR developers.

• 45X advanced manufacturing credit:
  Remains unchanged. This continues to support domestic manufacturing of solar modules, trackers, inverters, and other eligible components through 2031.

Impact on our Investment Case

Where pressure is rising

The amendment hits hardest in segments that depend on flexible financing and longer timelines, especially residential solar providers using third-party leasing models, and developers not yet ready to start construction. With tax credit transferability repealed and eligibility tied to both early construction and completion by 2028, monetization becomes more difficult and execution risk rises.

We have no exposure to these segments and remain focused on areas better equipped to navigate the new framework.

Where resilience remains

Our U.S. exposure is concentrated in utility-scale solar, grid infrastructure, and domestic manufacturing. These are the segments best positioned to meet the new deadlines, maintain financing access, and benefit from reshoring trends.

About 30% of our portfolio is tied to grid buildout and modernization, where urgency around permitting and interconnection just increased.

Domestic producers of solar equipment continue to benefit from the preserved 45X credit and from accelerated FEOC rules reducing competition.

Our Takeaway

This is likely the worst-case version of IRA reform, and it is now on the table. From here, negotiations with the Senate are expected to moderate some of the sharper cuts, particularly around ITC/PTC deadlines and transferability.

The Senate begins work in June, with the reconciliation process likely extending into July or beyond.

While market sentiment has shifted abruptly, we believe this sets the floor, and everything from here should rather improve. Our strategy remains focused on the segments best equipped to navigate and benefit from this evolving policy environment.