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The Solar Tax Credit Is Gone. Here’s What Comes Next
July 11, 2025The Federal Solar Investment Tax Credit May Be Gone Soon: What Now?
Still just months into his term, President Donald Trump continues to attempt massive policy overhauls. As with his proposed tariffs, these changes are once again having a major effect on the solar industry. A major piece of legislation dubbed the “One Big Beautiful Bill Act” covers a wide range of budgetary issues, including cutting funding for clean energy initiatives. It already passed in the House of Representatives on May 22, 2025, and now moves to the Senate for consideration, where it may pass as soon as early July.
If the bill passes in its current form, it would mark a significant setback for clean energy investments made during the Biden administration, particularly in the Inflation Reduction Act (IRA). Among the many investments in the IRA was the 30% Federal Solar Investment Tax credit (ITC) for homeowners investing in solar. This would obviously impact the amount of money potential solar customers would save, so the message is clear: if you’re considering going solar, the time to act is now.
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. It has already passed in the House, and now moves to the Senate where its supporters hope it passes in the next few weeks. While it targets a wide range of budget issues, we’ll focus mainly on how it affects the solar industry, where the bill slashes funding for clean energy incentives, including the tax credits that made going solar more affordable and accessible for millions of homeowners across the country.
What is the Federal Solar Tax Incentive Credit?
The IRA includes federal tax incentives to encourage the adoption of clean energy projects. Among them is the Residential Clean Energy Credit, which offers homeowners a 30% federal tax credit on the cost of installing a solar system. This covers the costs of the panels themselves, inverters, batteries, labor, and more. For reference, if a system costs $40,000 to install, a 30% tax credit would be $12,000. This is a significant amount of money that will likely no longer be available to homeowners after 2025. While the IRA originally had this incentive lasting until 2032, the One Big Beautiful Bill Act would end it 7 years prematurely.
What Happens if the Bill Passes?
If passed, the bill would end the 30% federal solar tax credit earlier than its current expiration date of 2032. While the exact date isn’t set, it’s likely it would expire on December 31, 2025. This means that any residential solar system installed after 2025 would not be eligible for the federal tax credit, resulting in the loss of thousands of dollars of potential savings. To make matters worse, utility prices are expected to rise by 9% once the tax credit expires. Ironically, this would make solar power even more important going forward as a way to avoid the rising costs of electricity.
Can I Still Get the Tax Credit if I Go Solar Now?
Yes. As of now, the bill has still not yet passed in the Senate. If and when it passes, it will take time until it goes into effect. The most likely timeline would have the tax credit expiring at the end of 2025, meaning that any system installed before December 31, 2025, would still be eligible. This should give any homeowner considering going solar some reassurance that there’s still time to act—but that time is quickly running out. 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.
What You Can Do
There are many reasons to oppose the One Big Beautiful Bill Act, especially if you’re concerned about the future of clean energy.
- Contact Your Senator. The bill has moved to the Senate now, where it will likely be voted on in the coming weeks. Until then, you still have time to make your voice heard. Call your senator and let them know you oppose the cuts to clean energy initiatives, and encourage them to protect the solar tax credit from the IRA.
- Educate Your Community. Many are unaware of the potential damage that the bill could cause to the solar industry. Talk to your family, friends, and neighbors about it so they can act before it’s too late.
- Consider Going Solar. Even if you’re not sure solar is right for your home, it’s best to get started early if you’re even considering it. We’re already halfway through 2025, and the future of solar is uncertain beyond the end of the year.
Go Solar with Solar Discovery
Regardless of what happens over the coming weeks and months, solar energy will remain a wise investment, both financially and environmentally. Going solar can significantly reduce your monthly utility bills, increase your home value, and reduce carbon emissions. However, with the potential rollback of the 30% federal tax credit, the economics of going solar will shift. If you’ve been on the fence, the time to act and go solar is now. Getting your system installed as soon as possible can help you secure the 30% tax credit and put thousands of dollars back in your pocket. Contact us today to learn more and to get started on your solar journey.
