What does the “One Big Beautiful Bill Act” mean for solar?
The Solar Investment Tax Credit (ITC) has been a cornerstone of solar energy adoption in the United States. For 19 years, it has allowed individuals and businesses to deduct a percentage of the cost of installing solar energy systems from their federal taxes. In 2022, congress passed the Inflation Reduction Act (IRA). The IRA extended the 30% ITC for solar projects and batteries and expanded the credits to include adders for low income and American made equipment. Under IRA provisions, certain solar installations are eligible for up to 60% tax credits. This incentive significantly reduced the upfront cost of solar, making solar more accessible to a wider range of consumers and businesses.
However, on July 4th 2025, the 'One Big Beautiful Bill (OBBB) Act' was signed into law. This bill brings significant changes to the solar ITC landscape, primarily through the elimination of key provisions. Specifically, OBBB rolls back the tax credit extensions from
Elimination of ITC for Solar Cash and Loans: On December 31st 2025, the ITC for solar systems purchased with cash or loans will be eliminated.
Elimination of ITC for Third-Party Ownership Models: Similarly, by 2027, the tax credit for third-party ownership models, such as leases and Power Purchase Agreements (PPAs), will also be discontinued.
These rollbacks create a sense of urgency for those considering solar. The elimination of the ITC will increase the upfront cost of solar installations, potentially making solar energy more expensive for consumers and businesses. Third-party ownership models, which have been popular due to their low upfront costs and ease of adoption, will also lose their tax credit advantage.
Given the impending changes, now is the time to take action if you're considering solar. By installing solar panels before the end of 2025, you can still take advantage of the ITC and significantly reduce the cost of your solar system. To get started, we recommend the following:
Review Solar Quotes: Obtain quotes from reputable solar installers in your area to assess the cost and potential savings of a solar system.
Understand Your Options: Explore different financing options, such as cash purchase, loans, leases, and PPAs, to determine the best fit for your needs.
Make an Informed Decision: Carefully evaluate the long-term benefits of solar and the impact of the ITC elimination on your investment.
By acting quickly and making informed decisions, you can still harness the power of solar and enjoy its many benefits before the ITC sunsets.
