{"id":12039,"date":"2025-05-22T05:32:04","date_gmt":"2025-05-22T05:32:04","guid":{"rendered":"https:\/\/www.solar.com\/learn\/?p=12039"},"modified":"2025-12-04T20:55:15","modified_gmt":"2025-12-04T20:55:15","slug":"breaking-congress-proposes-to-end-residential-solar-tax-credit","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/breaking-congress-proposes-to-end-residential-solar-tax-credit\/","title":{"rendered":"House Approves Terminating the Residential Solar Tax Credit"},"content":{"rendered":"<p><em><strong><span style=\"text-decoration: underline;\">July 4 Update:<\/span>\u00a0<\/strong>The &#8220;One Big Beautiful Bill&#8221; (OBBB) was signed into law by President Trump and includes a December 31, 2025 <a href=\"https:\/\/www.solar.com\/learn\/trump-and-the-fate-of-the-30-solar-tax-credit\/\" target=\"_blank\" rel=\"noopener\">end date for the 30% solar tax credit.<\/a> Homeowner-owned solar systems need to be installed by the end of 2025 to qualify for the 25D tax credit before it&#8217;s gone.<\/em><\/p>\n<p>For more information about the OBBB&#8217;s impact on residential solar, check out Solar.com&#8217;s OBBB Resource Center:<\/p>\n<ul>\n<li aria-level=\"1\"><a href=\"https:\/\/www.solar.com\/learn\/trumps-one-big-beautiful-bill-is-now-law-how-it-impacts-solar\/\" target=\"_blank\" rel=\"noopener\">The OBBB is Now Law: Here&#8217;s How It Impacts Solar<\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.solar.com\/learn\/faqs-about-solar-and-trumps-one-big-beautiful-bill\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Frequently Asked Questions About Solar and the OBBB<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.solar.com\/learn\/consumer-guide-to-going-solar-with-trumps-megabill-signed-into-law\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Homeowner&#8217;s Guide to Going Solar in the OBBB Rush<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.solar.com\/learn\/solar-leases-after-one-big-beautiful-bill\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">What You Need to Know About Leasing Solar post-OBBB<\/span><\/a><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<gs-injectable background = 'true' border='true' primary_color = '#8b72d3' secondary_color='#f98d7e' utm_campaign = 'get_started_injectable' utm_medium='ITC_ending_2025' content_texts = 'true' upper_text='See your savings potential' upper_text_span = 'with solar' lower_text='Get custom proposals from' lower_text_span = 'vetted local installers' get_started_text='Get started' only_community_solar='false'><\/gs-injectable>\n<p>&nbsp;<\/p>\n<p><span style=\"text-decoration: underline;\"><strong>June 30 Update: <\/strong><\/span>The <a href=\"https:\/\/www.solar.com\/learn\/senate-releases-updated-one-big-beautiful-bill-text-what-it-means-for-solar\/\" target=\"_blank\" rel=\"noopener\">Senate released its bill text<\/a> that keeps the end date of the 25D residential solar tax credit at December 31, 2025. In order to claim this 30% tax credit before it&#8217;s gone, homeowners will need to have their systems\u00a0<em>installed\u00a0<\/em>by the end of 2025.<\/p>\n<p>This latest, and likely final, version of the &#8220;One Big Beautiful Bill&#8221; also\u00a0<em>allows\u00a0<\/em>for lease and PPA companies to continue claiming the 48E tax credit for several more years, after previous versions of the bill had blocked companies from claiming this credit and passing the savings onto homeowners.<\/p>\n<p><span style=\"text-decoration: underline;\"><strong>Original article as follows: <\/strong><\/span>The House of Representatives voted on May 22 to approve the Budget Reconciliation Bill, including the measure to terminate the 30% Residential Clean Energy Credit for solar and battery storage on December 31, 2025. Residential projects placed in service (installed &amp; inspected) by this date will still be eligible for the 30% tax credit. The bill will now head to the Senate, where it is expected to pass in some form before the August recess.<\/p>\n<p><span style=\"font-weight: 400;\">The federal solar tax credit or &#8220;Investment Tax Credit (ITC)&#8221;<\/span> is, in many cases, the most valuable solar and battery incentive available to residential solar owners. Claiming the credit can reduce your federal tax liability by 30% of the total cost of installing solar and\/or battery storage. For instance, investing $30,000 in solar would allow you to claim a $9,000 credit on your federal tax return for the year it is installed and inspected.<\/p>\n<p>As part of the Inflation Reduction Act (IRA), the federal solar tax credit is currently scheduled to remain at 30% through 2032 before gradually phasing out by 2035. The Budget Reconciliation Bill measure to eliminate this credit almost 10 years early is not set in stone, as it still needs approval from the Senate before heading to President Trump for a signature.<\/p>\n<p>Let&#8217;s take a look at what&#8217;s next for the &#8220;Big, Beautiful&#8221; Budget Bill and the fate of the 30% residential solar tax credit.<\/p>\n<p><iframe loading=\"lazy\" title=\"Congress Moves to Terminate the Residential Solar Tax Credit\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/_6rUSU_6-So?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2><b>What happens next for the residential solar tax credit<\/b><span style=\"font-weight: 400;\">?<\/span><\/h2>\n<p>With approval from the House of Representatives, the Budget Reconciliation Bill heads to the Senate.<\/p>\n<p><span style=\"font-weight: 400;\">Most pundits think the Senate will pass the budget reconciliation bill before the summer recess in early August, but it&#8217;s unclear if an abrupt end to the residential solar tax credit will still be included as currently proposed. <\/span>The budget reconciliation bill includes cuts to several clean energy tax incentives created by the Inflation Reduction Act\u2014both for businesses and homeowners\u2014many of which have bipartisan support and have boosted manufacturing in Republican-held districts.<\/p>\n<p><img loading=\"lazy\" class=\"size-medium aligncenter\" src=\"https:\/\/assets.solar.com\/wp-content\/uploads\/2025\/06\/Budget-Reconciliation-process-6.png\" width=\"800\" height=\"400\" \/><\/p>\n<p>There will almost certainly be resistance to IRA cuts from swing-state Senators and changes to the reconciliation bill before it is signed into law. However, homeowners don&#8217;t have the luxury to wait and find out if the residential solar tax credit survives. Solar projects typically take several months from design to installation, and <em>starting<\/em> the process in August puts their project at risk of not being installed by December 31 and losing their tax credit eligibility.<\/p>\n<p><span style=\"font-weight: 400;\">Over the summer, the solar industry and everyone who cares about a consumer\u2019s choice to save money with solar should reach out to their federally elected representatives and let them know that they support the Residential Clean Energy Tax Credit (25D).\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><b>What happens to residential solar without a homeowner tax credit?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The budget reconciliation passed by the House in May not only terminates the 30% solar tax credit claimed by homeowners (known as 25D), it also restricts\u00a0<em>businesses\u00a0<\/em>from claiming the 48E tax credit on third-party-owned residential solar installations, such as leases and power purchase agreements (PPAs).<\/span><\/p>\n<p><strong>Update: The final bill left the 48E tax credit for business intact through the end of 2027. Homeowners can still benefit from this incentive through <a href=\"https:\/\/www.solar.com\/learn\/solar-lease\/\">solar leases<\/a> and Power Purchase Agreements.<\/strong><\/p>\n<p>If signed into law as written, this would effectively remove any path for homeowners to access a federal tax credit for installing solar and\/or battery storage and reduce the savings potential of adopting these technologies. The residential solar industry would certainly experience a substantial contraction, especially among smaller contractors who aren&#8217;t able to survive the market downturn.<\/p>\n<p>Industry veteran Brian Lynch joined us to discuss what the near- and long-term looks like for residential solar with tax credits.<\/p>\n<p><iframe loading=\"lazy\" title=\"Is The Solar Tax Credit Going Away in 2025?\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/BzZB5xMxhUg?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>July 4 Update:\u00a0The &#8220;One Big Beautiful Bill&#8221; (OBBB) was signed into law by President Trump and includes a December 31, 2025 end date for the 30% solar tax credit. Homeowner-owned&#8230;<\/p>\n","protected":false},"author":51,"featured_media":12040,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":""},"categories":[89,6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.5 (Yoast SEO v19.10) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>House Approves Terminating the Residential Solar Tax Credit | Solar.com<\/title>\n<meta name=\"description\" content=\"The House Ways and Means Committee has proposed removing the 30% residential solar tax credit at the end of 2025. Here&#039;s what you need to know.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.solar.com\/learn\/breaking-congress-proposes-to-end-residential-solar-tax-credit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"House Approves Terminating the Residential Solar Tax Credit\" \/>\n<meta property=\"og:description\" content=\"The House Ways and Means Committee has proposed removing the 30% residential solar tax credit at the end of 2025. 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