proposed End to 30% Federal Residential Solar Tax Credit: Countdown to 2025

In May, the U.S. House of Representatives passed what’s being called the “Big Beautiful Bill”—a sweeping proposal to dismantle many clean energy provisions of the Inflation Reduction Act, including the 30% Residential Clean Energy Credit (Section 25D). If passed by the Senate, this credit would expire on December 31, 2025, years ahead of the original 2034 sunset date.

What This Means for Homeowners

The 30% tax credit has been a cornerstone of solar affordability, allowing homeowners to deduct nearly a third of the cost of installing solar panels, batteries, and inverters. Under the proposed change:

• The credit will end Dec. 31, 2025—your system must be fully installed and operational by that date.

• There is no “start of construction” clause for residential systems—partial installs won’t qualify.

This shift could significantly impact out-of-pocket costs and long-term savings. For example, a 15 kW system currently costing $43,890 would be reduced to $30,723 after the credit, with an estimated 11-year payback. Without the credit, the full $43,890 cost would apply, stretching the payback to 16 years and reducing ROI.

What Homeowners Should Do

• Act early: Permitting, scheduling, and installation can take months. Begin planning at least 90–120 days in advance of the deadline.

• Talk to a solar installer: Ensure your project can be completed before the credit expires.

• Stay informed: The Senate is expected to debate the bill by mid- to late summer. If changes are made, it may return to the House for another vote.

Why This Matters

The end of the tax credit could lead to:

• Increased upfront costs for homeowners

• Reduced return on solar investments

• Project backlogs and installation delays as the deadline approaches

If you’re considering solar, the current 30% tax credit may not be around much longer. Taking action now could mean thousands in savings that may soon disappear.