Big Bill, Bigger Deals

How the BBB turbo‐charges energy M&A—and why private credit is first in line to fund it

Author

James Howl-Newton
July 18, 2025

Good morning, dealmakers.

Two weeks after the One Big Beautiful Bill (“BBB”) cleared Congress on 4 July 2025, the energy‑transition deal machine is whirring back to life. Tax credits of up to 70 % of capex, a 2025 “start‑construction” cliff and fresh FEOC restrictions are pushing developers toward the exit—and drawing a wall of private credit to the entrance. Here is your Friday briefing on why BBB could be this cycle’s most powerful M&A accelerant.

🧠 Deep Dive — BBB Sparks a Four‑Alarm Deal Rush

🔑 Trigger

🏃‍♂️ What it means on the ground

💸 Cash gap created

⚡ How private‑credit wins

70 % tech‑neutral tax credits (45Y/48E)

Any solar or wind that breaks ground by 31 Dec 2025 (storage by 2033) locks in a supersized credit.

Developers want to sell part‑built portfolios yesterday to monetise the upside.

Speedy, 2–3‑year bridge loans and delayed‑draw term loans to fund the buy.

FEOC rules start 2026

Use too much Chinese kit after the cutoff and you lose the credit.

Sponsors rushing to re‑tool factories and swap suppliers.

Asset‑based lines secured on new “Made‑in‑USA/EU” equipment and inventory.

45‑day Treasury clamp‑down on “substantial completion”

The old 5 % soft‑cost safe harbour is toast; real cash must hit the ground fast.

Projects need up‑front working capital for EPC milestones.

Revolvers and milestone‑based term loans that drip cash as blades, trackers and batteries leave the yard.

Start by 4 July 2026, skip the in‑service deadline

Finish later, keep the credit—so flippers can sell well before NTP.

Holdco buyers seek flexible capital to scoop up half‑built assets.

PIK notes and pref‑equity that let strategics lever future tax‑credit flows.

Bottom line: Deadlines, domestic‑content rules and tax‑credit maths are forcing developers to move (and sell) quickly. Private credit’s fast draws and creative structures are the grease in the gears.

Deal flow already building: Energy‑transition M&A hit US $497 bn in 2024—13.4 % of global activity—and is forecast to rise further in 2025 as strategics seek scale before the FEOC window shuts. DLA Piper DLA Piper’s February survey flags private equity and private credit as the capital pools best placed to monetise the new tax‑credit regime. DLA Piper

Dry‑powder backdrop: Private‑credit AUM reached US $1.5 trn at the start of 2024 and could climb to US $2.6 trn by 2029, according to Morgan Stanley IM. Morgan Stanley With banks still nursing balance‑sheet scars, direct‑lending desks see BBB‑linked construction and acquisition financings as the next $100 bn subsector.

📘 Career Tactic — Riding the BBB Boom

  1. Get fluent in 45Y/48E. Build tax‑credit waterfalls into your models; lenders now price step‑downs and FEOC haircuts.

  2. Front‑load diligence. Treasury’s forthcoming guidance could move “substantial completion” goalposts overnight—stress‑test schedules early.

  3. Follow the equipment. Deals that pivot supply chains away from China will need incremental capex; sourcing teams who can map Tier‑2 vendors are gold.

  4. Think platform, not project. Consolidators will pay up for teams that can replicate a BBB template across multiple states and technologies.

🧭 TL;DR

✅ BBB’s 70 % tax credits and 2025 construction cliff have turned energy developers into motivated sellers.
✅ Energy‑transition M&A already running at a US $500 bn clip and set to accelerate.
✅ Private credit’s dry powder, speed and structuring flexibility make it the natural bridge between tax‑credit value and strategic demand.
✅ Level‑up on 45Y/48E modelling and supply‑chain diligence now—the talent run‑up starts before the Treasury guidance drops in late August.

Big bill, bigger opportunities. Catch them while they’re beautiful.