With the passing of the budget reconciliation bill, the 30% federal tax credit for residential solar projects will end after December 31, 2025, and begin phasing out for commercial projects starting July 4, 2026.
Here’s what that means for you, and why now is the time to make the switch to solar.
What Homeowners and Businesses Need to Know
Based on the language in the most recent version of the bill, the 30% federal tax credit terminates for “expenditures made” on systems after December 31, 2025. This is potentially more lenient language versus the previous version of the bill, where the tax credit was terminated for systems “placed in service” after December 31, 2025.
Current understandings suggest that homeowners who have paid for their solar systems by December 31, 2025, would qualify for the 30% federal tax credit. However, due to limited guidance and ongoing revisions, there’s been some uncertainty around how eligibility will ultimately be defined. To ensure you qualify for the full credit, we strongly recommend having your system fully installed and running by the end of 2025.
For commercial projects, the 30% tax credit remains available, but there are some changes to the timeline. If construction on your project has started by July 4, 2026 and is completed within four years under the standard IRS safe harbor guidelines, you can qualify for the credit.
Businesses that start construction on projects after the July 2026 deadline can still qualify for the credit if the systems are in service by December 31, 2027.
Whether you’re getting solar for your home or your business you should get started on your project as soon as you can. Switching to solar can take several weeks or months, depending on the permitting process, whether parts are backordered, and when installation crews are available.
The Future of Solar
Even without incentives, solar is a smart investment for homeowners and businesses. By going solar, you generate your own electricity from the sun, which shields you from unpredictable energy costs, and contributes to a more sustainable future.
Next Steps
If you’re thinking about going solar and want to take advantage of the available savings, now is the time to get started on your project. Schedule a free consultation with one of our expert Solar Advisors to determine if solar is right for your home or business. If you decide to move forward, we’ll guide you through every step of the process, from design to installation.
Demand is expected to be high in the coming months, so contact us today to ensure your installation is completed before the end of the year so you can qualify for the credit.
