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Working with Wipfli’s tribal energy advisory at the earliest stages of your project gives you greater support and guidance in maximizing your potential energy incentives. With a team including CPA tax professionals, tax attorneys, architects and engineers, we can examine all aspects of your energy project to help you maximize eligible costs.
We offer support for:
- Feasibility studies: Gain a clearer view of the scope and cost of your project.
- Estimating credits: Our engineers and tax professionals can help you estimate the minimum and maximum tax credits available.
- Identifying obstacles: We work with your team to identify potential hurdles impacting your credits, including tax-exempt financing, so that you can maintain regulatory compliance for tribal energy projects.
Wipfli’s team of architects and engineers can help you dissect costs and maximize the qualifying components of your energy project. We’re ready to provide regulatory assistance for tribal energy projects and help you prepare for certification with support including:
- Qualification and evaluation of costs for the investment tax credit (ITC).
- Technology-neutral ITC adders and the necessary support, including prevailing wage and apprenticeship, domestic content requirements, energy community requirements and low-income community requirements.
- Computation of the estimated value of credit, including any required reductions (if applicable).
- Preparing all the necessary tax forms to claim your credits.
Wipfli’s tribal energy project consulting brings extensive tax experience to help you prepare for tax credit filing with the IRS. In addition to navigating Form 990, we can support you in:
- Documentation and study form certification.
- Preparing the necessary tax forms.
- Navigating direct pay.
- Navigating the IRS pre-registration portal system.
Insights and resources
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Energy tax credits are not dead: Understanding the new reality for investment incentives
Following the One Big Beautiful Bill Act (OBBBA) and changes to federal energy tax incentives, many building owners, developers, contractors and renewable energy investors were concerned that solar and wind tax credits expired on July 4, 2026. Their concerns are understandable but not entirely accurate. Federal Investment Tax Credits (ITCs) didn’t disappear overnight. Instead, Congress accelerated the phase-out timeline for certain technologies while preserving credits for projects that meet specific construction and timing requirements. Several renewable energy technologies remain eligible for credits well beyond 2026. How energy tax credits changed The OBBBA significantly modified the Clean Electricity Investment Tax Credit and Production Tax Credit established under the Inflation Reduction Act. For solar and wind projects, the law introduced a new beginning-of-construction deadline of July 4, 2026. Under the revised rules: Solar and wind projects that begin construction before July 4, 2026, can generally preserve eligibility for the federal tax credit. Solar and wind projects that begin construction after July 4, 2026, generally must be placed in service by December 31, 2027, to remain eligible. Projects that fail to meet these requirements may lose access to the federal ITC. July 4, 2026, was a critical deadline for establishing project eligibility through recognized IRS beginning-of-construction methods, but not a universal expiration date. How should contractors manage the new deadlines? Projects that meet the construction deadlines can still claim valuable federal incentives after 2026, subject to IRS continuity requirements. In many cases, developers are using safe harbor strategies, equipment procurement, or physical work tests to secure eligibility before the deadline. For developers with projects in planning, there may still be a substantial window to capture credits if the project is structured correctly. Credits continue for geothermal, energy storage, and other technologies Several technologies beyond solar and wind remain eligible for credits, including: Geothermal systems Stand-alone battery energy storage systems Fuel cells Combined heat and power systems Biogas projects Waste energy recovery property Certain thermal energy storage technologies For these technologies, the law generally provides a longer phase-out schedule that extends into the next decade. Projects beginning construction before 2034 can still qualify for the full credit, with gradual reductions after 2034. This is particularly significant for schools, healthcare systems, manufacturers, tribal organizations and commercial building owners considering geothermal heating and cooling systems. While much of the market has focused on solar and wind deadlines, geothermal projects may continue to qualify for significant federal incentives well into the next decade, making them an attractive option for organizations planning major capital improvements. The opportunity is shifting, not disappearing The market is transitioning from a period of abundant incentives to one that requires more planning and documentation. Organizations should also evaluate how tax credit monetization strategies, including transferability and applicable direct-pay opportunities, may affect overall project economics and financing. Successfully securing tax credits in the future will depend on: Early project evaluation Proper beginning-of-construction documentation Domestic content analysis Supply chain compliance reviews Tax credit modeling Prevailing wage and apprenticeship compliance Strategic project timing The incentive landscape is becoming more technical, not necessarily less valuable. Organizations that wait until construction is complete to evaluate incentives may miss opportunities. Those that address tax credit requirements early in project development can often preserve significant financial benefits. Read more American energy dominance: Restoring certainty for energy policy Manufacturing CFOs: Do you know your business may already qualify for energy tax incentives? Clean electricity ITC updates: New bonus credits for low-income areas
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Don’t let tribal energy grants jeopardize your energy tax credits
The Department of Energy’s Unleashing Tribal Energy Development grant provides opportunities for tribes to improve energy reliability and independence on their reservations. These grants offer the potential for significant windfalls for tribes. But there’s a catch many organizations overlook: Using the grants to pay for energy products could reduce the energy tax credits they receive. Keep reading to learn some strategies for using grant money on energy projects without increasing your tribes tax liability. What is the Unleashing Tribal Energy Development grant? DOE’s Office of Indian Energy created the $50 million Unleashing Tribal Energy Development grant to help tribal communities develop affordable, reliable and secure energy resources while advancing tribal sovereignty and economic development. Awards will range from $250,000 to $7.5 million, depending on project type. The funding supports three primary categories: Construction and installation of community-scale tribal energy projects. Predevelopment activities that move projects from concept to implementation-ready. Planning, assessment and feasibility work for larger-scale energy projects designed to create future economic development opportunities. Some examples of projects supported by this grant money include solar installations, battery storage, microgrids and geothermal systems. Energy tax credits available to tribes Federal clean energy incentives have dramatically expanded opportunities for tribal governments to save money. Tax credits your tribe could be eligible for include: Clean Electricity Investment Tax Credit: This credit generally begins at 30% of qualified investment costs for eligible clean electricity projects, including solar, wind, geothermal, battery storage and certain microgrid equipment. Bonus credits may increase the total benefit when projects satisfy additional requirements. Certain qualifying solar and wind facilities located on tribal land or serving eligible low-income communities may qualify for additional investment credit percentages. Clean Electricity Production Tax Credit: Instead of claiming a credit based on project cost, qualifying projects may receive production-based credits for electricity generated during the first 10 years of operation. This can be especially valuable for larger facilities that produce electricity for tribal operations or for sale to utilities. How can using grant money reduce energy tax credits for tribes? Tax credits are generally tied to qualified project costs, and government grants can affect the final credit amount. For tribes using elective pay, grant funding does not automatically reduce the cost basis used to calculate an investment tax credit. If a grant is specifically restricted to buying or building the credit-eligible energy property, the credit may be reduced. The restricted grant funding plus the credit cannot exceed the property’s cost. A practical way to think about the limitation is: Maximum credit = Property cost - restricted grant funding Actual credit = Lesser of: 1. Property cost × credit percentage, or 2. Property cost - restricted grant funding For example, assume a tribe installs a $1 million solar energy system that qualifies for a 30% investment tax credit and uses a $500,000 grant restricted to that system. The credit calculated before applying the grant limitation is $300,000. Because the $500,000 grant plus the $300,000 credit equals $800,000, which does not exceed the $1 million project cost, the credit would not be reduced. On the other hand, if the same $1 million project received an $800,000 restricted grant, the 30% credit would initially be $300,000. Because the $800,000 grant plus the $300,000 credit would total $1.1 million, exceeding the project cost by $100,000, the credit would be reduced by $100,000, from $300,000 to $200,000. How can tribes use grant money without losing tax credits? Energy grant money can be used without jeopardizing tax credits. It just needs to be analyzed strategically. Unrestricted or non-property-specific grants generally avoid the restricted-tax-exempt-amount limitation. You determine whether it is restricted when the grant is awarded. Review the award terms, budget categories, application and grant agreement to determine whether funds are specifically restricted to credit property. Your tribe should consider directing grant dollars to eligible project costs that are less likely to drive tax credit value, such as planning, assessment, feasibility, predevelopment or other non-credit costs. Because Unleashing Tribal Energy Development funds may support a range of activities — from early-stage planning to construction and installation — the funding plan should identify which costs generate tax credits and, where possible, reserve non-grant funds for those costs. Four strategies to help preserve tax credit value when using grant funds: 1. Use grant funds for predevelopment and readiness activities Grant funds can be used to pay for engineering studies, feasibility assessments, site analyses, environmental reviews, grid modeling and other project-readiness tasks. Many of these activities do not have a tax credit. Using grant dollars for predevelopment may help your tribe preserve general funds for credit-eligible equipment and systems. 2. Use general funds for credit-eligible energy property Prioritize using your own funds or other non-grant sources to pay for the portions of the project that generate tax credits, such as solar panels, battery storage, microgrid controllers, geothermal equipment or other qualifying energy systems. This can help preserve the full eligible cost basis for the tax credit. 3. Separate the energy system from the surrounding project costs You may have projects that include both credit-eligible energy equipment and broader infrastructure or construction costs. Where permitted by the grant terms, grant funds may be better suited for non-credit or less credit-sensitive costs, while other funding sources may be reserved for credit-eligible energy property. For instance, a tribe might be building a new community facility that includes a solar system, battery storage and supporting site infrastructure. In this case, identify which costs are directly tied to the energy system and which are related to broader construction. Using grant money to cover the costs of building a structure to protect the solar system and general funds for the actual system could preserve the tax credit value. Your tribe will need to review what construction costs grant money can be applied to. 4. Document funding sources and project costs carefully Tribes should avoid treating the project as one large pool of costs. Instead, they should itemize costs to show: Which costs are grant-funded. Whether the grant funds are restricted or unrestricted. Which costs are paid by general funds or other sources. Which costs are included in the tax credit calculation. Which costs are excluded from the tax credit calculation. How the allocation aligns with grant requirements and tax rules. Whether bonus credits, prevailing wage, domestic content or beginning-of-construction requirements apply. This documentation is not just helpful for tax credit calculations. It can also support grant compliance, board reporting, audit readiness and long-term financial stewardship. What planning needs to be done to maximize grants and tax credits? A plan to protect tax incentives needs to be in place before signing contracts or finalizing the project budget. After payment decisions have already been made, it may be too late to avoid a reduction in the credit. When developing a strategy to leverage grant money and incentives, be sure all stakeholders are involved, including: Tribal leadership Finance and accounting teams Project engineers Construction partners Tax advisors Legal counsel These are the questions you need to answer when crafting a strategy: Which project costs are eligible under the grant? The tribe needs to understand what the grant can cover within the selected topic area. Which project costs are eligible for tax credits? The tribe should identify the specific assets or systems that generate ITC, PTC, bonus credit or other incentive value. Which funding source should pay for each cost category? The funding plan should be designed to preserve tax credit value where possible. Are there deadlines or beginning-of-construction requirements? Wind, solar, direct-pay filings, and bonus credit opportunities may require timely action and documentation. What documentation will be needed later? Tribes should collect contracts, invoices, proof of payment, cost allocations, engineering documents and other records throughout the project. Read more A new era of tax sovereignty: GWE and tribal corporation tax exemption rules Your tribal organization just implemented a new ERP. How do you maximize the success of your investment? Is it time to replace your legacy accounting system? 8 signs tribal CFOs should watch for.
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Opportunity Zone updates: New proposed regulations clarify transition rules
Opportunity Zones are entering a major transition period. Recent law changes, including the One Big Beautiful Bill Act (OBBB), have adjusted how the program will work going forward. Now, IRS Notice 2026-40 has provided the IRS’s “roadmap” for the handoff between the old system and the new system. The guidance not only clarifies how existing investments will be treated during the transition but also highlights key planning considerations for investors preparing for the next phase of the Opportunity Zone program. What is the current status of Opportunity Zones? Opportunity Zones are currently in a transition period as the original program approaches key deadlines and a revised framework is set to take effect on January 1, 2027. Investors with existing Opportunity Zone investments usually remain subject to the original rules, including the upcoming recognition of deferred gains, while a new set of tax-deferral, Opportunity Zone tracts and basis-adjustment provisions will govern future investments. What Notice 2026-40 means for Opportunity Zone investments Notice 2026-40 outlines transitional guidance for investments made under the original program before the new Opportunity Zone rules take effect. Note that this is a notice to the proposed regulations and additional guidance will follow once those are released. Here are three key areas the notice addresses: Investments made on or before December 31, 2026. Under the old rules, investors could reinvest eligible profits into a qualified opportunity fund and delay tax — but only up to a point. The notice reiterates that, for many investors, the deferred profit must typically be reported as taxable income no later than the year that includes December 31, 2026. The notice also reiterates that this cannot be deferred any further. However, Opportunity Zone gains recognized by an inclusion event may be eligible for deferral. Investments made on or after January 1, 2027. Starting January 1, 2027, the program continues but works differently. Instead of one shared end date, the new rules generally make the deferred gain taxable at the earlier of when the investment is sold or five years after the investment was made. If the investment is held for at least five years, the rules can provide an additional benefit by increasing the investor’s basis for the investment, typically 10% or 30% for certain qualified rural opportunity fund investments. Property acquired after December 31, 2026, in previously designated Opportunity Zone tracts. The notice signals that forthcoming proposed regulations will include safe harbors permitting Qualified Opportunity Funds (QOF) and QOZBs to keep satisfying location-based tests after a previously designated qualified Opportunity Zone’s (QOZ) designation expires. Projects already operating under a written working-capital plan adopted by December 31, 2026, may be able to treat certain post-2026 purchases as still qualifying if they are made under that plan and meet the notice’s conditions. Generally, the notice requires that 10% be funded to the Qualified Opportunity Zone Business (QOZB) and 5% spent by December 31, 2026. Ordinary business course replacement or modernization may still qualify, but this may not extend to expansion into a new business line or new product line. If tangible property is acquired by the end of the QOZ designation period or qualifies under the working capital or ordinary course replacement transition rules, the QOF or QOZB can keep treating the expired QOZ as a QOZ for the substantial use test through December 31, 2047. What the changes mean for your Opportunity Zone investment As Opportunity Zones transition into this next phase, the rules clearly shift from a one-time deferral incentive to a more measured, rolling framework. For investors, this means 2026 serves as a hard reset on existing deferrals, while shorter, investment-specific timelines will govern new investments. At the same time, the guidance preserves value for ongoing projects by allowing certain pipeline developments and operational replacements to continue qualifying, even as legacy zones phase out. How you can prepare for Opportunity Zone changes Now is the time to start thinking about how these transition rules affect your current QOF and QOZB investments. Whether you’re managing an existing investment, overseeing an active development project or evaluating future opportunities, the transition guidance introduces several planning considerations: Know your potential tax liability: Investors with gains deferred under the original Opportunity Zone program should begin planning for the tax implications of the December 31, 2026, inclusion date. Understanding the potential tax liability now can help avoid cash-flow surprises and provide time to evaluate strategies for funding the resulting tax obligation. Review current projects: Organizations with active Opportunity Zone projects should review existing working capital plans, development timelines and planned property acquisitions. Projects that may rely on the transition relief provisions should confirm they meet the notice’s requirements and maintain documentation supporting continued eligibility. Reassess new investments: For those considering new Opportunity Zone investments after January 1, 2027, it will be important to reassess investment horizons and expected returns under the revised five-year deferral framework. The new rules may create different planning opportunities than the original program, particularly for investors evaluating long-term appreciation and basis step-up benefits. Leverage experienced tax support: Because the transition guidance introduces new compliance requirements and planning considerations, investors, fund managers and project sponsors should work closely with their tax advisors to evaluate how the evolving regulations affect their specific circumstances. Read more: Opportunity Zone tax benefits under OZ 2.0 How the OBBB just changed taxes for real estate investors OBBB Opportunity Zone updates signal major change in 2026
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Tribal energy advisory FAQ
Wipfli takes a comprehensive approach to tribal energy advisory, with a multidisciplinary team of consultants who can fulfill roles including:
- Architects and engineers: Provide support at the earliest planning stages, maximize qualifying components and plan for the scope and costs of your project.
- CPA tax professionals and tax attorneys: Identify potential hurdles, prepare the necessary tax documents, prepare a final report and documentation, navigate direct pay and assist with the IRS pre-registration portal system.
Wipfli supports a wide range of credit and incentive opportunities, with focus areas including:
- Geothermal
- Battery storage
- Microgrids for tribes
- Investment tax credit
- Prevailing wage and apprenticeship
- Low-income community requirements
- Domestic content requirements
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