Signed into federal law on July 4, 2025, the One Big Beautiful Bill Act (OBBBA) marks a significant shift in the energy landscape, introducing tighter timelines for clean energy tax credits, stricter sourcing requirements, and a general policy tilt away from renewables.1 Demand for data center infrastructure will remain strong as AI-related growth continues, with a July 23, 2025, executive order promising streamlined federal permitting for large-scale AI data centers.2 However, the fact that a recent analysis by the International Energy Agency (IEA) projects electricity demand from AI-optimized data centers will more than quadruple by 2030 raises concerns surrounding cost and viability.3 For operators, these combined pressures will shape the economics, scheduling, and compliance requirements of future builds, something we are adapting to accordingly.
The most pressing implications of the One Big Beautiful Bill Act (OBBBA)
Likely the biggest concern surrounding the OBBBA and data centers is the rollback of the production (Section 45Y) and investment (Section 48E) clean energy tax credits introduced by the Inflation Reduction Act. Wind and solar facilities not under construction by July 4, 2026, will now need to be in service by December 31, 2027, to access these credits. If developers do start construction by that July 4, 2026, deadline, they avoid the 2027 placed-in-service cutoff and will typically have up to four years to finish. However, any project that misses the mid-2026 start date faces an absolute 2027 deadline to be in full operation, leaving little room for permitting delays and procurement complexities.4
Even with tax credits remaining in place for long-duration storage, geothermal, and nuclear projects through 2033, Energy Innovation still projects that the loss of low-cost renewables and higher induced gas prices will lead to significant electricity price increases.5 Similarly, the permanent extension of full expensing for short-lived assets, such as expensive AI GPUs and the after-tax cost of new servers, correctly noted by Avison Young, is unlikely to offset higher operating costs tied to power.6 With wholesale electricity prices forecast to climb 25% by 2030 and 74% by 2035 as a result of the OBBBA, and AI driving demand even higher, waiting will likely mean paying more for power and facing tougher power purchase agreement (PPA) terms.7 In contrast, starting sooner will likely allow operators to lock in cheaper PPAs or build their renewable supply while tax credits are still available.
What the OBBBA means for infrastructure delivery timelines
In any case, even if full expensing for short-lived assets could offset the lack of access to clean energy tax credits, nothing explicitly precludes benefiting from both should circumstances allow, providing yet more of an incentive to get shovels in the ground as quickly as possible. Measures introduced by the OBBBA to speed up project approvals may be of benefit here, having introduced a means to conduct assessments per the National Environmental Policy Act (NEPA) within 180 days and impact statements within a year for an upfront fee. The fact that regulators are also examining Clean Water Act rules, potentially creating a nationwide general permit for data center construction to simplify wetlands and water-impact permitting, could also potentially shorten development timelines, albeit in a manner that may prove regionally contentious.8
However, the revised sourcing restrictions tied to Foreign Entities of Concern (FEOCs) add a clear layer of complexity here; although precise requirements have yet to be outlined, we do know that, unless projects start construction before December 31, 2025, even operators able to do so before July 4, 2026, will face new FEOC demands. Namely, they will have to prove that components, particularly solar panels, wind turbines, or battery cells, have not been sourced from or processed by entities with ties to countries like China, a significant expansion on restrictions put in place by the Inflation Reduction Act (IRA).9 Given the inherent complexity of supply lines, this could add a significant amount of red tape.
Adding to this is that a proposed federal moratorium on state and local regulation of AI systems (including AI-focused data centers) was removed from the final bill after Senate review. With local governments still retaining the power to apply zoning, environmental, and permitting rules to data center projects, developers will still need to navigate local regulations for AI infrastructure, rather than benefitting from a blanket federal override. Again, this could significantly impact site selection and approval timelines, placing additional pressure on already tight development schedules.10
The need for greater strategic guidance and operational foresight
In light of this, operators looking to make use of clean energy tax incentives will need the expertise necessary to avoid any other setbacks that can lead to delays. As noted by Bryan Cave Leighton Paisner (BCLP), if a large-scale clean energy project hasn’t begun construction by mid-2026, finishing by the end of 2027 “will likely be difficult”.11 For that reason, identifying permitting risks early, sequencing procurement to avoid lead-time bottlenecks, and ensuring that agreements, zoning approvals, and construction timelines, as well as any PPAs dependent on those milestones, all remain aligned with federal deadlines, will be of crucial importance. In practice, this will mean working with teams who can interpret evolving guidance, flag issues before they escalate, and coordinate across stakeholders to ensure compliance and keep development on track.
Meanwhile, operators looking to develop data centers in line with the impetus of the July 23, 2025, executive order and other OBBBA provisions, but unable to make use of clean energy tax credits, will need to explore every viable option for reducing energy costs. Expertly installed software-based energy optimization tools, fast becoming a core part of data center strategy, could prove crucial post-OBBBA in this respect. By automating decisions around when and how energy is drawn, stored, or dispatched, AI-driven tools that enable predictive load shifting, intelligent cooling, and real-time energy procurement will offer invaluable cost savings, all while simultaneously helping operators remain aligned with increased ESG scrutiny.
How Salute can help accelerate project viability across the full project lifecycle
As OBBBA-driven timelines compress and compliance hurdles grow, Salute is focusing on strategies that keep projects moving without sacrificing quality or compliance. Our Advise-to-Refresh lifecycle model enables us to engage at every stage, validating site feasibility and sequencing construction in a manner adaptable to meeting tax credit deadlines and FEOC requirements, and integrating cost-control measures from the outset.
Through on-the-ground execution with coordinated program management, we are uniquely positioned to bridge the gap between planning and operations, namely by aligning procurement with sourcing restrictions, coordinating vendor schedules to mitigate lead-time risk, and embedding energy-optimization measures during commissioning. This allows us to work alongside operators and general contractors to bring forward the technical, regulatory, and operational inputs needed to make informed decisions early and avoid downstream delays. All of this means, regardless of objectives, we can provide the expertise and structure needed to bring capacity online in step with OBBBA-oriented expectations.
Why integration now matters more than ever
The OBBBA has condensed project windows, layered in new sourcing and compliance checks, and raised the stakes on energy cost control, all against the backdrop of rapidly growing AI-related demand. In this environment, success will depend on treating policy awareness, procurement discipline, and operational execution as parts of a single, continuous process rather than separate workstreams. Operators who take this integrated approach from the outset will be far better placed to move at the speed required, thereby maintaining eligibility for 45Y and 48E incentives and avoiding unnecessary downstream costs. We at Salute are well-placed to do that through our design–build–operate–refresh lifecycle, which combines precision and scalability in ways that enable operators to navigate both today’s and tomorrow’s constraints.
Advisory Support That Moves Projects Forward
Delivering OBBBA-era projects on time and on budget means aligning policy interpretation, procurement, and operations from day one. Salute’s integrated lifecycle services are designed to do exactly that, helping operators maintain compliance, control costs, and keep development moving at speed.
Contact our team to discuss how we can help you plan, build, and optimize infrastructure that meets today’s compliance and cost challenges.
Footnotes
- See Jack Andreasen Cavanaugh et al., “Assessing the Energy Impacts of the One Big Beautiful Bill Act,” (New York: Center on Global Energy Policy, Columbia University, July 14, 2025), https://www.energypolicy.columbia.edu/assessing-the-energy-impacts-of-the-one-big-beautiful-bill-act/. ↩︎
- “[A] July 23, 2025, executive order [promises] streamlined federal permitting for large-scale AI data centers,” Fact Sheet: President Donald J. Trump Accelerates Federal Permitting of Data Center Infrastructure, The White House, July 23, 2025, https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-accelerates-federal-permitting-of-data-center-infrastructure/ ↩︎
- “[A] recent analysis by the International Energy Agency (IEA) projects electricity demand from AI-optimized data centers will more than quadruple by 2030,” AI Is Set to Drive Surging Electricity Demand from Data Centres While Offering the Potential to Transform How the Energy Sector Works, International Energy Agency, April 10, 2025, https://www.iea.org/news/ai-is-set-to-drive-surging-electricity-demand-from-data-centres-while-offering-the-potential-to-transform-how-the-energy-sector-works. ↩︎
- “Wind and solar facilities not under construction by July 4, 2026, will now need to be in service by December 31st, 2027, to access these credits. If developers do start construction by that July 4, 2026, deadline, they avoid the 2027 placed-in-service cutoff and will typically have up to four years to finish. However, any project that misses the mid-2026 start date faces an absolute 2027 deadline to be in full operation, leaving little room for permitting delays and procurement complexities.” See Keith Martin et al., “Effects of ‘One Big Beautiful Bill’ on Projects,” Norton Rose Fulbright, July 7, 2025, https://www.projectfinance.law/publications/2025/july/effects-of-one-big-beautiful-bill-on-projects/#:~:text=Under%20the%20bill%2C%20solar%20and,of%202030%20to%20be%20completed. ↩︎
- “Energy Innovation still projects that the loss of low-cost renewables and higher induced gas prices would lead to significant electricity price increases.” Energy Innovation, “Economic Impacts of U.S. Senate ‘One Big Beautiful Bill Act’ Energy Provisions,” July 2025, 2, https://energyinnovation.org/wp-content/uploads/One-Big-Beautiful-Bill-Senate-Reconciliation-Analysis_July-2025.pdf. ↩︎
- Avison Young, “U.S. Data Center Update | Q2 2025,” August 6, 2025, 16, accessed August 8, 2025, https://www.avisonyoung.us/us-data-center-market-overview. ↩︎
- “Wholesale electricity prices [are] forecast to climb 25% by 2030 and 74% by 2035 as a result of the OBBBA.” Ibid .above. ↩︎
- “Measures introduced by the OBBBA to speed up project approvals may be of benefit here, having introduced a means to conduct assessments per the National Environmental Policy Act (NEPA) within 180 days and impact statements within a year for an upfront fee. The fact that regulators are also examining Clean Water Act rules, potentially creating a nationwide general permit for data center construction to simplify wetlands and water-impact permitting, could also potentially shorten development timelines…” Avison Young, “U.S. Data Center Update | Q2 2025,” August 6, 2025, 16, accessed August 8, 2025, https://www.avisonyoung.us/us-data-center-market-overview. ↩︎
- “[T]hey will have to prove that components, particularly solar panels, wind turbines, or battery cells, have not been sourced from or processed by entities with ties to countries like China, a significant expansion on restrictions put in place by the Inflation Reduction Act (IRA).” Energy Ventures Analysis, “The One Big, Beautiful Repeal: How OBBBA Resets Clean Energy Policy,” June 2, 2025, https://www.evainc.com/energy-blog/the-one-big-beautiful-repeal-obbba-resets-clean-energy-policy/#:~:text=Beginning%20January%201%2C%202026%2C%20the,challenges%20for%20many%20clean%20energy. ↩︎
- “[A] proposed federal moratorium on state and local regulation of AI systems (including AI-focused data centers) was removed from the final bill after Senate review. With local governments still retaining the power to apply zoning, environmental, and permitting rules to data center projects, developers will still need to navigate local regulations for AI infrastructure, rather than benefitting from a blanket federal override. Again, this could significantly impact site selection and approval timelines, placing additional pressure on already tight development schedules.” Avison Young, “U.S. Data Center Update | Q2 2025,” August 6, 2025, 16, accessed August 8, 2025, https://www.avisonyoung.us/us-data-center-market-overview. ↩︎
- Bryan Cave Leighton Paisner LLP, “What the ‘One Big Beautiful Bill’ Act Means for the Renewable Energy Industry — and How It Can Adapt,” July 2025, https://www.bclplaw.com/en-US/events-insights-news/what-the-one-big-beautiful-bill-act-means-for-the-renewable-energy-industry-and-how-it-can-adapt.html#:~:text=In%20practice%2C%20completing%20large,must%20be%20placed%20in%20service. ↩︎