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Is the 30% Solar Tax Credit for Homeowners Going Away?
With new legislation shifting the landscape for solar incentives - especially under the recently passed “One Big Beautiful Bill” - many homeowners are asking the same question: Is the 30% solar tax credit still available? And if so, for how much longer?
The short answer: yes, the credit is still here - but not for long.
For years, the Residential Renewable Energy Tax Credit (often called the “solar tax credit”) has allowed homeowners to claim 30% of the cost of a solar installation (and batteries if included) as a federal tax credit. That means if you spent $20,000 on a solar system, you could reduce your tax bill by $6,000. This policy helped millions of Americans go solar and fueled a clean energy boom.
But the OBBB just changed the game.
What You Need to Know
- Hard deadline: Under the current understanding of the bill’s language, your solar system must be installed, inspected, and activated before January 1, 2026 in order to claim the 30% tax credit.
- No phase-out: Despite the original Inflation Reduction Act language, there's no longer a phase down of the credit. Once 2026 begins, residential homeowners receive zero federal tax credit.
- Other residential clean energy credits:
- Third-Party Owned (leased, Power Purchase Agreement [PPA], Solar Energy Procurement Agreement [SEPA]) systems still have leeway until the end of 2027, following “commence construction” and “safe harbor” rules that still apply under commercial rules. But these routes tend to be more expensive, since the third-party needs to make money.
Who Still Qualifies?
- Homeowners who own or finance their systems (not leased).
- Systems fully installed and operational by 12/31/2025.
- U.S. taxpayers with sufficient tax liability
What Homeowners Should Do Now
- Get a quote ASAP: We are booking up fast and very soon will not be able to guarantee completion of construction in time for the tax credit.
- Get ahead of Permitting Requirements: Permitting delays can push you past the deadline. If you live in a neighborhood with an HOA, begin the process of getting permission to install solar ASAP. Your local permit office and/or power company may have solar policies that cause long delays.
- Talk to your tax advisor: You’ll need sufficient tax liability to absorb the credit. If the tax credit exceeds your tax liability, the excess amount may be carried forward to the succeeding taxable year.
- Lock in financing or cash: Be prepared to pay a sizable deposit to secure your position in the installation queue.
Final Word
Going solar has never made more sense, and the 30% tax credit makes it even smarter. But this federal support won’t last forever. Make your move now, and invest in a future powered by clean, affordable energy.
If you’re not in a position to act before the deadline, that’s okay. Residential solar will still offer a strong return on investment - especially when compared to paying a utility bill, which offers zero return-on-investment. With or without the tax credit, solar remains one of the most impactful upgrades a homeowner can make.