With the recent passing of the “One Big Beautiful Bill” (OBBB), the outlook for renewable energy incentives has become cloudy. Portions of the bill took aim at federal tax credits designed to spur renewable infrastructure investment, and some in the commercial real estate industry fear for their viability in future projects. Those fears are likely overblown, says Blair Herbert, CEO of Coast Energy.
"There is a little bit of a misconception within the commercial real estate industry that all of the renewable energy credits were removed," says Herbert. "The headlines are a little bit more draconian than the bill itself."
In fact, commercial real estate owners still have significant opportunities to deploy clean energy solutions, he insists. Commercial solar installed 2.1 gigawatts direct current (GWdc) of capacity last year, an 8% increase from the year before, setting a new record.
Clean energy incentives available through 2028 and beyond
The OBBB, officially known as H.R. 1, does eliminate solar tax credits in July 2026, but the law allows for projects to safe harbor the 30% federal tax credit through 2028."There's still almost a year for real estate owners to make decisions to move forward with a solar project and still receive the federal tax credit for years to come," Herbert said.
More significantly, energy storage systems and other renewable energy products including some generators, retain full federal tax credits through 2033. This extended timeline provides the long-term certainty needed for major capital investments, fueling interest among property owners seeking backup power and cost savings.
"What we're seeing is a lot of real estate owners—whether for more reliable energy or because of their utility rate schedule and the benefits gained through battery storage—wanting to deploy energy storage," Herbert observes.
Rising power demand continues to make solar attractive
Tax credits are just one incentive. The electrification of transportation and power-hungry AI data centers is straining the national grid and raising electricity rates, which have climbed by 6.8% per year, outpacing inflation. A single data center can use as much power as 80,000 homes and utilities are having a difficult time keeping up with demand.
Rapid solar deployment is a direct response. In 2024 alone, solar accounted for 66% of all new electricity-generated capacity added to the US grid. Herbert underscores the urgency of adding more capacity, citing Department of Energy forecasts warning that blackouts could increase 100-fold if retired power sources aren’t replaced.
Microgrids gain importance for reliability
Grid reliability concerns are also fueling interest in microgrids that combine solar, energy storage, and generator capacity, which can operate in parallel with the main grid. Herbert sees critical infrastructure, grocery stores, healthcare, life sciences and senior living facilities as key sectors that can benefit from these integrated systems.
"We think the largest area of growth will be microgrids," Herbert said, noting their ability to maintain building operations during grid outages.
Meanwhile, state and local programs are stepping up. California and New Jersey, for example, are considering new incentives to support renewable energy and storage deployment. Other states like Hawaii and Maryland are maintaining their renewable energy targets.
Decarbonization goals still in place
Despite policy headwinds, Herbert believes most institutional real estate owners will stick to their published decarbonization goals, since investors and tenants continue to favor these energy sources. "We think these goals will persist and continue to drive the growth of renewables for commercial real estate owners," he says.
For commercial property owners weighing renewable energy investments, the message is clear: opportunities remain robust, but timing is everything. And having a trusted and knowledgeable partner like Coast Energy is paramount.
For more insights and thought leadership from Coast Energy, click here.
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