As of May 29, 2025, the U.S. House of Representatives has passed the “One Big, Beautiful Bill,” which proposes significant changes to clean energy tax credits, including the potential termination of the 30% Residential Clean Energy Credit (also known as the solar Investment Tax Credit or ITC) at the end of 2025.
Under the current law, homeowners who install qualifying solar energy systems can claim a 30% federal tax credit through 2032, with a planned reduction to 26% in 2033 and 22% in 2034. However, if the proposed legislation is enacted without amendments, the residential solar tax credit would expire on December 31, 2025, nearly a decade ahead of schedule.
The bill also includes provisions that would affect third-party-owned residential solar systems, such as those leased through companies like Sunrun. Specifically, it proposes eliminating the commercial solar ITC under Section 48 for leased systems, which could impact financing options for homeowners who prefer leasing over purchasing.
It’s important to note that the bill has passed the House but still requires approval from the Senate. Some Republican senators have expressed concerns about the abrupt elimination of clean energy tax credits, suggesting that the final legislation may undergo changes.
Given the current legislative developments, homeowners considering solar installations may want to be aware of the potential changes to federal tax incentives. If the bill is enacted as currently written, only systems installed and placed in service (i.e., installed and passed inspection) by December 31, 2025, would qualify for the 30% federal tax credit.
For the most accurate and personalized advice, it’s recommended to consult with a tax professional or a certified solar installer who can provide guidance based on the latest legislative updates and individual circumstances.
Analysis: Why Now Is the Time to Act on Solar
Recent developments in Washington signal a potential shift in the landscape of clean energy incentives—most notably, the future of the 30% federal solar tax credit is now uncertain.
The House of Representatives has passed a bill backed by former President Trump that, if enacted, would eliminate the Residential Clean Energy Credit after 2025, cutting short a program originally scheduled to run through 2032. While this bill is not yet law—it still requires Senate approval—its momentum is a clear warning for homeowners considering solar: waiting may cost you thousands in lost incentives.
What This Means for You
- Guaranteed 30% Tax Credit: Systems that are installed and operational before December 31, 2025 will still qualify for the full 30% federal tax credit, even if the law changes afterward.
- Possible Elimination of Leased Solar Incentives: If you’re planning to use third-party financing (e.g., leasing or power purchase agreements), the bill proposes removing tax benefits for those systems entirely.
- Project Timelines Matter: Permitting, engineering, and installation can take weeks or even months—starting now is essential to ensure your system is complete before any legislative deadlines.
Our Recommendation
At Original Energy, we strongly advise all homeowners considering solar to begin the process immediately. The potential rollback of federal incentives means that every week of delay increases the risk of missing out on these valuable savings.
Whether you are a homeowner looking to reduce your energy bill or want to increase your energy independence, acting before the end of 2025 may be your best—and last—chance to lock in the full benefits.
Let us help you take control of your energy future while the window of opportunity is still wide open.
