Overview
The recently passed One Big Beautiful Bill Act (H.R.1) significantly shortens the timeline for federal clean energy tax credits, creating uncertainty for Illinois’ clean energy businesses and workers. These credits have been central to lowering project costs and rewarding projects that pay prevailing wages and provide apprenticeship opportunities.
The Climate Jobs Institute conducted listening sessions and interviews with 169 clean energy employers, workers, government officials, workforce training providers, advocates, and stakeholders to understand how these federal changes will impact Illinois — and to identify ways the state can support affected businesses and workers.
Watch the Webinar
Federal Rollbacks, Local Impacts: Solutions to Support the Illinois Clean Energy Workforce
During a webinar hosted on December 10, 2025, the Climate Jobs Institute shared findings from the report on how federal tax credits are impacting Illinois and how Illinois is responding.
We were joined by an extremely knowledgeable panel that features Bob Hattier from IBEW Local 134, Hilary Scott-Ogurinde from DCEO, Kavi Chintam from Vote Solar, Ky Ajayi from Straight Up Solar and Rebeccah Sanders from the Clean Energy Jobs and Justice Fund.
Key Federal Changes
H.R.1 significantly shortens the timeline for federal clean energy tax credits, impacting clean energy development and workforce growth in Illinois.
- Clean Energy Investment and Production Tax Credits (48E and 45Y) for solar and wind will phase out early.
- Projects must begin construction by July 2026 or be completed by the end of 2027 to qualify.
- Credits remain for battery storage, nuclear, and geothermal projects.
- Consumer tax credits for solar systems, battery storage, electric vehicles, and other clean technologies end in 2025.
- Foreign Entity of Concern (FEOC) restrictions and new tariffs further complicate project development.
Project Impacts
Businesses are racing to meet construction and energization deadlines to access expiring credits. However, they face major barriers in meeting these deadlines, including:
- Project complexity
- Permitting and interconnection delays
- Slow state grant disbursement
- Financing difficulties
- Competition to bulk-purchase materials and “safe harbor” projects
- General uncertainty over shifting federal rules and FEOC restrictions
- Limited labor pool and consumer awareness
These barriers and administrative hurdles could delay or disqualify projects from meeting federal deadlines. For small firms and Equity Eligible Contractors, even minor administrative hurdles could be the difference between survival and closure.
Mixed Views on the Future
Participants expressed mixed views about the future of Illinois’ clean energy growth. Some participants believe renewable development will continue due to strong state incentives, rising electricity costs, and load growth. Others fear a boom-and-bust cycle—a surge of projects before deadlines followed by a sharp drop-off.
Solar for All and community solar projects were seen as most vulnerable, particularly for small businesses and low-income customers relying on incentives.
Business and Worker Impacts
While many businesses are racing to complete projects before tax credits expire, others have already started scaling back. Participants described a widening divide between larger firms with access to capital and smaller, locally owned companies struggling to stay afloat.
Layoffs and Uncertainty
Many firms reported they had already laid off workers, frozen hiring, or expected layoffs when federal credits expire. Participants consistently identified small businesses, Equity Eligible Contractors (EECs), and recent CEJA workforce program graduates as the most vulnerable.
- Participants predicted a wave of consolidation across the clean energy sector. Smaller firms, squeezed by shrinking margins and financing
- EECs and small contractors were more likely to be laying off workers already or planning to downsize.
- CEJA workforce graduates, especially those facing barriers to employment, were viewed as most at risk of layoffs or hiring freezes.
These losses threaten to erode recent progress toward equity in clean energy employment.
Business Resilience
Despite these headwinds, clean energy businesses are adapting:
- Pivoting to sectors with longer-lasting federal incentives (battery storage, solar leases)
- Diversifying services into energy efficiency, retrofits, or general construction
- Forming partnerships to bulk-purchase materials and “Safe Harbor” projects
- Helping each other navigate new federal and state requirements
- Leveraging state-level funding and grant opportunities
But resilience, participants noted, depends heavily on access to capital and administrative capacity — advantages that small businesses and Equity Eligible Contractors often lack.
“The sky’s not falling. We’ll get through this low and get back to where we need to be because of the necessity of clean renewable energy.”
Solar Contractor Participant
Policy Solutions for Illinois
Participants identified four areas where Illinois can act to sustain clean energy momentum and protect workers:
1. Accelerate Project Development
- Streamline and simplify siting and permitting across jurisdictions.
- Expedite utility interconnection studies; incentivize performance.
- Accelerate CEJA pre-development grants and allow funding for Safe Harbor materials.
- Temporarily increase Illinois Shines block capacity to maximize expiring credits.
2. Fill Funding Gaps
- Adjust Renewable Energy Credit (REC) values to offset lost federal incentives.
- Expand bridge loans, revolving funds, and capitalize the Clean Energy Jobs and Justice Fund and Illinois Climate Bank.
- Increase CEJA grant funding to sustain at-risk projects, especially for Equity Eligible Contractors.
3. Support Workers and Contractors
- Strengthen regional engagement between employers and workforce organizations.
- Focus training on cross-cutting skills.
- Align curricula with employer needs and emerging technologies.
- Broaden success metrics for CEJA workforce outcomes.
- Provide capital and planning support for contractors to sustain hiring pipelines.
4. Improve Information Sharing and Coordination
- Continue technical assistance for small businesses and nonprofits seeking grants.
- Consolidate clean energy program guidance into one accessible hub.
- Coordinate across agencies (DCEO, IPA, EPA, IDES, IDHS).
- Clarify and communicate evolving FEOC rules.
- Match workforce programs with employers through centralized outreach.
- Track and share progress via regional and statewide strategies.
Acknowledgements
Special thanks to the Illinois Department of Commerce and Economic Opportunity, Climate Jobs Illinois, and the Illinois Clean Jobs Coalition for their assistance with hosting the listening sessions.
More CJI Commentary on Federal Policy Changes
Fewer Jobs & Higher Energy Bills
What H.R. 1 Means for Illinois