Tax Credit Changes to Renewable Energy Installations
Published
on Monday, August 4, 2025
in
Renewable Energy
Have you previously considered investing in a solar or wind installation?
The One Big Beautiful Bill Act, passed by Congress on July 3, 2025, accelerates the deadline for the current renewable energy tax credit. This could potentially affect those who are in the process of installing new solar or wind projects, as well as people considering new projects.
Residential Projects
The residential solar tax credit, originally set to end in 2034, will now expire by Dec. 31, 2025.
To be eligible for the credit, solar panels must be installed and in service by this date.
Commercial Projects
For commercial installations, the expiration is slightly more gradual.
Solar and wind projects that start construction before July 5, 2026, will still be able to claim the credit; however, they should be completed within four calendar years to satisfy the credit’s requirements.
Projects that begin construction after July 5, 2026, now have an accelerated deadline of Dec. 31, 2027, to be installed and in service in order to be eligible for the credit.
Some Reminders When Considering Solar
- Thoroughly read contracts. Don’t let a salesperson pressure you into signing something before you understand it.
- Be wary of special offers. Talk of free equipment or a “limited-time deal” that ends in a matter of hours or days can be a sign that you’re being pressured into an agreement.
- Get detailed information. Ask about:
- Installation timeline and process
- Frequency of communication
- Timeliness of warranty
- Follow-up work if there’s an issue
- Assistance with paperwork processing for loans, tax credits, and rebates
- Other contractors you may need to hire for things like tree removal, battery installation, roof repair, etc.
- What happens if the system doesn’t pass inspection (if it doesn’t pass inspection, it cannot operate and we cannot connect it to our system; however, you may still be financially responsible even if the solar panels are not operational)
- Understand the tax credit benefit. The credit doesn’t mean you’ll get a check from the government – instead, it decreases your federal income tax. Consult a tax professional to learn exactly how much you can expect to benefit from it.
- Know how much energy you’ll generate. Instead of going by what the salesperson says, research how much sunlight or wind your area gets and how much electricity this can generate. You will need a backup source if you can’t generate 100% of your electricity, and you will still get a bill for fixed charges if you remain connected to our infrastructure.