Why is having the 30% Solar Tax Credit important?
The 30% Investment Tax Credit, also known as the federal Residential Clean Energy Credit, helps homeowners reduce their tax bill by 30% when purchasing solar panels. Gradual reduction of the tax credit is set to happen after 2032, according to the Inflation Reduction Act (IRA)
Events and developments in 2025
The House voted (May 22) in favor of the “One Big Beautiful Bill,” a package that fast-forwards the end of the residential ITC to the end of 2025, almost ten years earlier. This provision in the bill only includes solar systems installed and checked before December 31, 2025. At this point, no one can take out residential credit.Commercial and utility solar will start to phase out early, in 2029, with the complete repeal happening in the years 2032-2033
Changes in the market and industrial areas
After the bill passed in the House, Sunrun closed down 41%, SolarEdge went down 26%, and Enphase fell 18%, among others. According to Reuters, the Solar Energy Industries Association believes that further losses and tariffs on steel/aluminum may reduce the growth of U.S. solar power by well over 10 percent by 2030.
What Factors Could Also Impact the Outcome
After that, the bill will head to the Senate, where some Republicans could try to either keep or phase out the credit rather than make it go away completely
Suggestions cover slowly decreasing tariffs or associating the credit allowance with the domestic production of panels and parts (US origin).
Things Homeowners Must Consider in Solar
To benefit from the full amount, your solar setup and its inspection must be finished by December 31, 2025.
In case the bill passes after the year 2025, “safe harbour” rules can help applications receive approval for 2025 systems
Since there are problems within the industry and rising tariffs, now is the time to act and secure special benefits without having to worry about future pricing increases.
Let’s focus on the main topics in this subject.
The way the item stood in June 2025
Solar panels and other equipment may give tax savings of up to 30% of their cost for homeowners.
Until the end of 2028, commercial ITC (utility scale) will remain at 30 percent, and it will gradually decrease from 2029 to 2032.
These are change proposals that are still in debate.
Because of shifting market conditions, solar stocks have dropped, and investors worry more about the future outlook. To be qualified, the action plan should be concluded by December 31.
Final Word
President Trump is only able to indirectly change the 30% Solar Investment Tax Credit because it requires an act of Congress, but so far, there are moves to scale it down by 2026. Even though the House has approved a bill for an early pause on the credit, the Senate may still amend the law or put off the cutback.
As of now, the 30% solar tax credit remains in effect until December 2025. Therefore, anyone who owns a home or runs a business can still save a significant amount, although the opportunity may be closing soon. Because upcoming policy changes and raised costs in the supply chain are expected, next year will be an important moment for solar power adoption.
Now is a good moment to look into solar energy. Not acting quickly now could prevent you from getting help with thousands of dollars from the government.
