The Solar Tax Credit May Be Gone Soon: What Now?
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July 22, 2025The Federal Solar Tax Credit Is Gone. Here’s What Comes Next
Less than six months into his term, President Donald Trump continues to pursue massive policy overhauls. Now, he has managed to push through a historic piece of legislation. After months of back and forth, the One Big Beautiful Bill Act passed in the Senate on a narrow 51-50 vote and was signed into law by President Trump on July 4th. The bill covers a wide range of budgetary issues, including cutting funding for clean energy initiatives. Despite some small positive changes in the final version, this bill will set the solar industry back for the time being.
And through it all, the solar industry will continue moving forward. As long as clean energy continues to be a wise investment, both financially and environmentally, it will persist. Let’s take a closer look at what will be changing, how we’ll adapt, and why now is the best time to go solar.
What is the “One Big Beautiful Bill Act”?
H.R. 1, known as the “One Big Beautiful Bill Act,” is a sweeping piece of legislation aimed at cutting government spending, and passed into law on July 4th, 2025. While it targets a wide range of issues from tax relief to health care, we’ll focus mainly on how it affects the solar industry. The legislation slashes funding and eliminates tax incentives that made going solar more affordable and accessible for homeowners and businesses across the country.
What is the Federal Solar Tax Incentive Credit?
The Inflation Reduction Act (IRA), passed in 2022, included federal tax incentives to encourage the adoption of clean energy. Among them was the Residential Clean Energy Credit, which provided homeowners with a 30% federal tax credit on the cost of installing a solar system. This is a significant amount of money that homeowners can save when they go solar; if a system costs $40,000 to install, a 30% credit would be $12,000. Unfortunately, with the passage of the One Big Beautiful Bill Act, this tax credit will no longer be available after 2025.
What Are the Effects on Going Solar?
With the bill passing into law, the 30% federal solar tax credit will officially disappear at the end of this year. Here’s what it means if you’re considering clean energy:
- The residential 30% tax credit, first introduced in 1978 and most recently modified in the 2022 Inflation Reduction Act, was set to last until the end of 2032, with a gradual phase down until it would expire at the end of 2034. It will now expire at the end of this year on December 31, 2025.
- The 30% solar tax credit for leases and PPAs remains available for commercial projects that begin construction before July 4, 2026, or are placed in service before the end of 2027. With these arrangements, solar installation companies receive the 30% tax credit and pass the savings on to homeowners
- The solar tax credit is still available for commercial projects that are completed by the end of 2027 or begin construction by July 4, 2026.
- Battery storage is still eligible for tax credits, whether a battery is installed on its own or with a solar system, under the same deadline as solar: by the end of 2025 for residential, and by the end of 2027 for commercial.
- Additionally, this bill will also affect the EV market. Currently, new electric vehicles that meet specific domestic manufacturing requirements are eligible for a tax credit of up to $7500. This tax credit will expire on September 30th of this year.
Am I Still Eligible for the Solar Tax Credit?
Yes. The solar tax credit is still available for projects that are installed before December 31, 2025. Any homeowner who wants to go solar and receive the tax credit still has some time to act, but that time is running out. Given that installations can take time, it’s best to decide as soon as possible to ensure that you can still qualify for the tax credit if you do decide to go solar. Potential tariffs causing price hikes and supply chain disruptions are another reason to act sooner rather than later and to start looking into going solar before the end of the year.
Go Solar with Solar Discovery
With the passing of the Big Beautiful Bill Act, there is now an official end date for the 30% federal tax credit. While going solar will continue to be a wise choice even after the tax credit disappears, the best course of action at this point would be to try to do so as soon as possible, or at the very least, before the end of the year. Getting a system installed this year will help you secure the 30% tax credit and put thousands of dollars back in your pocket.
Between the unresolved tariff questions and the looming end of the tax credit, the solar market remains unpredictable. With the added deadline to get your solar system installed by the end of the year, it’s more important than ever that you work with a reliable solar company. Solar Discovery takes pride in the fact that we work more efficiently than any competitor on the market, finishing projects that take others months to complete in a matter of weeks. We’re your best bet for getting your project done in time to qualify for the solar tax credit. Contact us today to learn more and get started on your solar journey.
