If you’re a homeowner considering solar or already planning an installation, you deserve to know how the recently House-passed One Big Beautiful Bill Act might impact your timeline and the amount of savings possible with your solar panel system.
What Does “One Big Beautiful Bill” Say About Solar?
The One Big Beautiful Bill Act, formally known as H.R. 1 and passed by the House on May 22, 2025, proposes to end the 30% federal tax credit for residential solar installations (known as the Residential Clean Energy Credit or ITC) by December 31, 2025, with specific details outlined in Section 112006.
Originally slated to continue through 2034 under the Inflation Reduction Act, the credit allows homeowners to deduct 30% of their solar installation costs from their federal tax liability.
The removal of this credit means that, after this year, homeowners who install solar will no longer be able to deduct 30% of their installation costs from their federal tax return.
For many, this tax credit has been a deciding factor in choosing solar. Its elimination could raise the out-of-pocket cost for going solar, especially for those who planned to take advantage of this incentive to offset upfront expenses.
According to the H.R. 1 bill, any residential solar system not placed into service (with Permission to Operate, or PTO) by December 31, 2025 will no longer qualify for the credit. That makes 2025 potentially the last year to benefit from this substantial incentive.
What about credits available for solar leasing models?
Previously, solar leasing models had some flexibility under federal tax rules, allowing leasing companies to claim credits and pass savings onto customers. The new bill ends this practice. For taxable years beginning after the bill’s enactment, no tax credit will be available for leased solar systems.
This affects homeowners who use third-party leasing companies to avoid the upfront cost of solar. With this provision removed, leasing may become a less attractive or accessible option.
While owning your system is still financially viable, the removal of leasing incentives may limit solar access for homeowners who rely on lease agreements to make solar affordable.
What is status? Has the “One Big Beautiful Bill” passed?
Although the House has passed the bill, the Senate is expected to review and possibly revise the legislation when they return from recess the week of June 2, 2025. Many senators have already expressed concern about the potential impact on clean energy jobs and investment, including Senator Ron Johnson (R-Wis.) and Senator Rand Paul (R-Ken).
According to the Solar Energy Industries Association, the enactment of this legislation can lead to 330,000 fewer American jobs, an increase of $51 billing in consumer electricity costs, and a decrease in electricity production by roughly 173 terawatt hours by 2030.
Given the Senate’s narrow Republican majority (53-47) and existing opposition, the final outcome may still change. Public advocacy and bipartisan pressure could also shape the final legislation.
What does this mean for your solar energy journey?
If you’re considering solar or already planning a system installation, this new legislation means you might need to act fast. Only systems that are placed into service and receive Permission to Operate (PTO) before December 31, 2025, are expected to qualify for the 30% federal tax credit.
Leasing models no longer qualify for tax incentives, so if you were planning on going the lease route, you’ll need to explore ownership options instead. Timelines matter more than ever now, so speaking with a solar provider soon to lock in your installation schedule is critical.
This may be your last opportunity to benefit from the full federal solar tax credit. With potential changes still in the hands of the Senate and no guarantee of reversal, homeowners hoping to lower the cost of solar through tax savings should move quickly. Stay connected to industry news, advocacy groups, and trustworthy solar advisors to remain informed as the situation unfolds.
Trust SunMade with your solar energy journey
Reach out to SunMade today to speak with a local solar expert who can walk you through your options, help you secure your installation timeline, and ensure your system qualifies for the 30% federal tax credit before it ends.
Don’t wait until it’s too late! Contact SunMade now and make the most of solar while the incentives are still available. Give us a call today at 559-702-5023 or get an instant quote here.
