California Attorney General Rob Bonta has joined a coalition of 17 attorneys general in filing an amicus brief in the U.S. District Court for the District of Columbia opposing Internal Revenue Service Notice 2025‑42, which narrows eligibility for certain wind and solar tax credits.
The notice changes the criteria for when projects are considered to have begun construction, a requirement for claiming the Clean Electricity Production and Investment Tax Credits. The coalition argues that this policy will reduce clean energy supply, increase electricity costs, and hinder efforts to address climate change.
The Clean Electricity tax credits, introduced under the 2022 Inflation Reduction Act, were designed to support all zero‑emission facilities and were projected to save consumers $16 to $34 billion annually by 2035, cut air pollutants by 20 per cent, and reduce greenhouse gas emissions by 300 to 400 million tons. In July 2025, the One Big Beautiful Bill Act phased out these credits for facilities placed in service after 31 December 2027, except for projects that begin construction by 4 July 2026. Notice 2025‑42, issued by the IRS in August 2025, tightened the definition of “beginning construction,” making the prior 5 per cent cost safe harbour insufficient to qualify. This change threatens many wind and solar projects, the jobs they would create, and could raise costs for electricity consumers.
Attorney General Bonta and the coalition state that Notice 2025‑42: decreases long‑term clean energy supply and raises electricity costs; harms prior investments and planning for reliable, affordable energy; and is arbitrary and capricious without reasonable justification.
In addition to California, the amicus brief is joined by the attorneys general of Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New Jersey, Rhode Island, Washington, and the District of Columbia.
