Since the Inflation Reduction Act (IRA) passed in 2022, renewable energy developers enjoyed a period of long-term certainty with tax credits for wind, solar, and storage. That stability shifted in mid-2025, when the One Big Beautiful Bill Act (OBBBA) rolled back or shortened many of those incentives. Now, developers are re-evaluating how they plan, finance, and build projects in a far more compressed timeline.
Capitalizing on Tax Credits Before They Expire
Prior to the passing of the OBBBA, developers planned their projects with the assumption that tax credits for the investment and production of wind, solar, energy storage technologies, and other forms of renewable energy would be available into the 2030s. That deadline has been moved up significantly. Projects now must be placed in service by December 31, 2027, or have begun construction by July 5, 2026, to be eligible for the tax credits. This tightened timeline has sparked a construction race as developers are prioritizing permitting, locking in procurement contracts, and accelerating timelines to qualify before the deadline. At the same time, projects unlikely to meet the cutoff are being backlogged. Developers are still securing land and permits for these projects, but construction has been paused until the policy environment becomes favorable again.
The Pivot to Energy Storage
Wind and solar were the primary beneficiaries of the IRA, but under OBBBA, their future is less secure. By contrast, standalone Battery Energy Storage Systems (BESS) remain eligible for incentives, giving them a strategic advantage. Storage projects often require less land, face simpler permitting, and can interconnect more quickly than large wind or solar farms. Developers increasingly see storage as a reliable revenue stream through ancillary services, peak shaving, and energy arbitrage, even in a volatile policy environment.
Increasing Power Prices
One of the clearest ripple effects of losing long-term credits has been the rise in power purchase agreement (PPA) prices. A PPA is the contract in which a utility or a corporate buyer agrees to purchase electricity from a wind, solar, or storage project for a set price over many years. These contracts are critical for developers, because they guarantee revenue and make it easier to secure financing. When the IRA was in full force, tax credits lowered a project’s effective cost, which allowed developers to offer PPAs at more competitive prices. With fewer incentives to offset costs, developers must pass more expenses onto utilities and corporate buyers. As a result, PPA prices have moved upward across the board and will likely continue to increase as the 2027 deadline approaches.
Effects on Farmland Leases
Policy changes are expected to create volatility in the market for farmland leases tied to renewable energy, with varying impacts depending on project stage and location. Some lease rates may decline as incentives shrink, while others could remain steady or even rise in the short term as developers race to lock in land before key deadlines expire.
In the near term (2025-2027), developers face a compressed timeline for eligibility, which is pushing them to secure sites quickly. This urgency could temporarily drive up lease rates for landowners whose property is well suited to projects that can be completed before the end of 2027. Additionally, the OBBBA significantly reduces funding for new transmission line projects. Parcels located close to existing transmission lines have become especially valuable, further boosting their leasing potential. That being said, developers are also entering negotiations with tighter margins due to reduced tax credits, which may lead them to push for more favorable lease terms.
Looking to the long term (2028 and beyond), the early termination of tax credits for new utility-scale solar and wind projects will likely dampen overall demand for farmland leases. With less competition for prime parcels, per-acre lease payments for utility-scale solar may stabilize or fall compared to the peak rates seen during the IRA-driven boom.
Large-scale wind and solar development may slow, but landowners can expect increased interest in their land for battery storage projects, as those incentives remain intact. Storage typically requires less land than solar or wind, allowing landowners to retain more farmland acres and generate additional revenue through leasing.
Persistent Market Challenges
Even with tax incentives, developers still face the same permitting hurdles that slowed progress under the IRA. Federal, state, and local approvals can stretch for years, making it difficult to expedite projects ahead of the OBBBA’s compressed timeline. Interconnection queues are also long and costly, forcing developers to reconsider whether a project can realistically connect before credits expire.
Looking Ahead – The Post 2027 Landscape
The renewable energy sector now finds itself in a period of urgency and uncertainty. The long-term incentives of the IRA fueled steady growth, but the OBBBA has shortened timelines, raised costs, and forced developers to rethink their strategies. Some are accelerating construction to capture tax credits before they expire, while others are pivoting to battery storage or shelving projects until conditions improve. Farmland owners, utilities, and corporate buyers all feel the ripple effects, from shifting lease values to higher PPA prices. At the same time, familiar bottlenecks in permitting and interconnection remain unresolved. Whether clean energy momentum continues beyond 2027 will depend on developers’ ability to adapt and how future policy frameworks evolve.
To better understand how these changes may impact your property, please contact Peoples Company’s Energy Management team.
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