Last Updated: June 4, 2025
There is never a dull day on the solar coaster, and the latest potential changes working their way through the Senate feel like an upside-down loop with a massive downhill ahead.
In late May, the U.S. House of Representatives passed what is being called the “Big Beautiful Bill,” a legislative move to severely gut the Inflation Reduction Act (IRA) and bring all solar-related tax credits to an abrupt end.
This blog highlights what we currently know. We will strive to keep it updated regularly as new developments emerge.
One thing is clear – now is the time to act if you’re considering solar and don’t want to miss out on the solar tax credits that will help save you thousands that will otherwise be paid to Uncle Sam.
What’s in the House Version of the Bill?
Here’s a breakdown of the key changes currently included in the House-passed version of the Big Beautiful Bill.
Residential Solar Tax Credit (Section 25D)
- This credit will end December 31, 2025 – You must have your solar system fully installed by the end of 2025 to claim the 30% federal tax credit.
- There’s no start of construction clause like there is for commercial projects. This means your system must be finished by December 31.
Commercial Solar Tax Credit (Section 48E)
- All projects must start construction within 60 days of the bill becoming law (calendar days, not business days). The only way to meet this is by “safe harboring,” which means investing at least 5% of the project cost in hardware.
- If you are safe-harboring a project, your system must be installed by December 31, 2028, to qualify for the tax credit.
- There is a 100% FEOC requirement. This means the materials for your system can not come from or be manufactured by a company with ownership in a foreign country of concern. Violating this requirement would eliminate your eligibility for the tax credits.
While the proposed bill cuts the solar tax credits, it reinstates 100% bonus depreciation, which will allow businesses to depreciate the entire cost of their solar investment in the first year.
Why This Bill Is So Concerning For The Solar Industry
These changes will significantly alter the solar investment landscape for both residential and commercial solar projects. Here’s how:
- The 60-day start of construction window is very challenging to meet with the long timeline of commercial projects.
- The FEOC rule could cripple the equipment supply chain.
- The loss of the tax credits will eliminate the ability for a lot of homeowners and businesses to invest in solar.
- The construction completed by residential deadline will cause installer backlogs to fill up and make it difficult for many to take advantage of the tax credit before it’s too late.
- The solar industry is going from being over-incentivized to essentially falling off a cliff with virtually no incentives. This would be a significant challenge for any industry to overcome.
What’s Next? Where the Bill Currently Stands
The timeline is somewhat uncertain, but here’s what we know as of June 4th:
- The House has passed the bill.
- The Senate is expected to begin debate in June, with pressure to decide by July 4th or the August deadline for the debt ceiling.
- The Senate could approve, revise, or reject the bill. If revisions are made, the bill would go back to the House for another vote.
What You Can Do Right Now
1. Act Fast If You’re Considering A Solar Investment
It’s crucial for you to request a quote and get started on an installation or safe harbor as soon as possible. Solar projects are not developed overnight. It takes time to design, obtain permits, procure the necessary products, and ultimately install a system. Plus, installers’ backlogs are quickly filling up. Now is the time to move forward – incentives will likely never be better.
2. Contact Your Elected Officials
Contact your senators and representatives. Encourage them to preserve the solar tax credits or phase them out responsibly.
Final Thoughts
Whether you’re a business owner, farmer, or homeowner, the time to invest in solar is right now. With incentives as good as they’ll ever be and real uncertainty ahead, the smartest move you can make is to lock in your savings before it’s too late.
