Published: May 22, 2025 | By SolarTopps Editorial Team  

Congress Just Voted to End the Residential Solar Tax Credit 

Recently, the members of the U.S. House of Representatives made a surprising move by voting in favor of a comprehensive federal budget bill. The unexpected approval of the budget bill marks a key step in shaping the nation’s financial strategy, outlining federal fund distribution and addressing economic priorities for the next fiscal year.

This decision could impact residential and commercial solar energy projects nationwide by potentially ending solar tax credits. Homeowners using solar power may face financial changes, affecting renewable energy investments and sector growth.

Big Beautiful Bill Ends Solar Tax Credits 

One of the disruptive aspects of this new bill is the proposed removal of the 30% Residential Solar Investment Tax Credit (ITC). This tax credit has been vital in making solar energy systems more affordable for homeowners. Without it, solar panel installation costs could rise, discouraging many from adopting renewable energy. The removal of the ITC could slow the growth of residential solar adoption and impact homeowners who might otherwise benefit from solar energy.

Is the Solar Tax Credit Going Away?  

The updated budget now includes several new provisions that were added at the last minute. These additions are significant and carry important implications that could affect various aspects of the financial plan. 

Residential Solar Takes a Hit: For the popular 25D Solar tax credit 2025, maybe the last year homeowners can cut the cost of going solar. This credit has made solar accessible for millions of Americans. Without it, going solar could get a lot more expensive.  

Leasing Gets Cut Off: Solar leasing companies like Sunrun can no longer collect the 48E ITC, reducing consumer access to lower upfront cost solar options.  

Accelerated Deadlines for Commercial Projects: To qualify for either the ITC or the PTC, projects must 

Construction is expected to commence within a period of 60 days: Following the signing of the bill. This timeline allows for the necessary preparations and arrangements to be made prior to starting the actual construction work. 

Before the date of December 31, 2028: Officially put into operation It is important that the service in question begins and is. This means that all preparations, installations, and necessary arrangements need to be completed so that the service can function effectively by that time. 

Stricter Foreign Content Rules (FEOC Compliance): Projects starting after December 31, 2025, that use components from prohibited foreign entities (like certain Chinese manufacturers) will be disqualified from federal incentives.  

Manufacturing Tax Credit Stays—For Now: The 45X manufacturing credit remains fully intact through 2029, with a slow phase-out starting in 2030.  

What does the Investment Tax Credit (ITC) do?

The Investment Tax Credit (ITC) is a federal policy that supports renewable energy growth by reducing taxes for individuals or businesses investing in solar systems. It enables a portion of solar installation expenses to be subtracted directly from federal taxes, thereby reducing the cost of solar energy. By lowering upfront costs, the ITC has driven clean energy adoption, innovation, and environmental sustainability.

What is the Production Tax Credit (PTC)?

The Production Tax Credit (PTC) is a federal program. It encourages renewable energy projects such as wind, biomass, geothermal, and hydroelectric power. It offers a per-kilowatt-hour (kWh) credit for electricity generated by eligible sources and sold to third parties. This performance-based incentive encourages producers to maximize output and efficiency. The PTC links financial support to energy production. This helps cut down on fossil fuel use, encourages innovation, and aids the shift to a cleaner energy grid.

Why This Matters: Is the Solar Tax Credit Being Cancelled?  

High interest rates, rising panel costs due to recent tariffs, and now the possible death of the 25D credit—all of it adds up to a serious threat to the affordability of solar for American homeowners. 

“This bill would upend an economic boom that’s delivered lower electric bills, high-paying jobs, and energy independence—especially in states that voted for President Trump,” said SEIA President Abigail Ross Hopper.  

She didn’t mince words: “If this bill becomes law, America will effectively surrender the AI race to China and communities nationwide will face blackouts.”  

What Happens Next to the Solar Industry in 2025 and Beyond? 

The bill is currently on its way to the U.S. Senate, where it will be reviewed and potentially voted on. If it successfully passes through the Senate, homeowners will need to take action quickly, as they will only have until the end of 2025 to install solar energy systems in order to qualify for the 30% tax credit. Meanwhile, for commercial and utility-scale developers, the timeline is even tighter. They will have to begin construction within a rapid timeframe of just 60 days after the bill passes.

At Solar Topps, we’ve seen many changes in federal policy over the years, bringing challenges to our business. This isn’t new to us, and we know it won’t be the last. As the news constantly changes, we remain proactive and ready to adapt, just as we’ve done successfully before.

Here’s the good news about the Solar Industry!

The Solar Industry may be uncertain, but we are ready to handle any challenges or opportunities that arise. At Solar Topps, we’ve made all the necessary preparations to handle any situation effectively.

We Have the Solar Installation Equipment.

Thanks to the strong connections we have built in the supply chain, we are ready to meet our clients’ needs. There’s no last-minute rush for solar panels, and we’ll deliver exactly what you need.

We Install Solar Panels Quickly and Efficiently.

Our skilled in-house teams work carefully to make sure your installation process goes smoothly. If you want to install your solar system before the tax credit expires, we can ensure it happens on time.

Committed to Staying in Business in Arizona.

Solar Topps has served our community for over ten years. We have built a strong foundation in the solar industry in Arizona, with plans for many years hereafter. Our commitment to homeowners remains steadfast, even after the current legislative issues have resolved themselves. 

Choose a solar energy company with the expertise and stability to handle challenges and thrive long-term.

The tax credit may be ending, but your window of opportunity hasn’t.  

Schedule your free site assessment now and lock in your solar savings while you still can. If you have questions about the 2025-2026 Solar Tax Cuts for Solar Panels, please make sure to Contact Us.