Is the 30% Solar Tax Credit Going Away? Here’s Why 2025 Might Be Your Last Chance to Save Big
- Selva Arellano
- Jun 10
- 3 min read
If you’ve been thinking about installing solar panels, now’s the time to stop thinking—and start doing.
As of 2025, homeowners can still claim the full 30% Federal Solar Investment Tax Credit (ITC). That means up to $10,000 in savings when you go solar. But here’s the catch: a new bill passed by the U.S. House of Representatives in May 2025 could end this credit by the end of the year.
Yes, you read that right.
🎯 The 30% tax credit may expire on December 31, 2025—not 2032 as previously promised.
What Is the ITC and Why Does It Matter?
The Federal Solar Investment Tax Credit (ITC), first enacted in 2005 and extended multiple times, has been one of the most influential clean energy policies in the United States. It allows homeowners to deduct 30% of their total solar system cost from their federal taxes, including panels, inverters, batteries, and installation costs. The Inflation Reduction Act of 2022 locked in the 30% rate through 2032, with a scheduled step-down beginning in 2033.
This long runway was intended to provide market stability and encourage nationwide solar adoption. And it worked. Since the ITC's introduction, the U.S. solar industry has grown by over 10,000%.
But the landscape shifted in May 2025 when the U.S. House passed the so-called "Big Bill" omnibus budget proposal, which included a provision to eliminate the residential solar tax credit effective January 1, 2026. While the bill must still pass the Senate—and faces significant resistance—its passage in the House sent shockwaves through the solar industry.
According to Solar Power World, advocacy groups like SEIA (Solar Energy Industries Association) and Vote Solar are actively lobbying to remove the repeal language from the final legislation. But nothing is guaranteed.
What Does That Mean for You?
If this proposal becomes law, it would wipe out the biggest incentive homeowners have for going solar. Thousands in savings would vanish. The difference between installing now and waiting a year? Potentially 30% more out-of-pocket costs.
And that’s assuming prices remain flat. If demand surges in the second half of 2025—as many in the industry expect—homeowners who delay could face longer waitlists and rising equipment costs.
Why 2025 is the Sweet Spot for Solar in California
Along with the federal ITC, here’s why going solar this year makes sense:
🔋 Battery Rebates from SGIP – California’s Self-Generation Incentive Program offers rebates for homeowners who install battery storage. These funds are limited and issued on a first-come, first-served basis.
💸 No Property Tax Increase – California excludes solar energy systems from property tax reassessment until at least 2026. Learn more.
⚡ Rising Electric Rates – SDG&E has some of the highest electricity rates in the country. Solar offers predictable savings and protection against utility hikes.
⏳ Limited-Time Incentives – Local utility rebates and installer discounts are often tied to the existence of the ITC and may disappear with it.
A Tipping Point for the Industry
The U.S. solar industry is watching this legislation closely. According to SEIA, an early end to the ITC could cause a 30-40% drop in residential solar installations nationwide in 2026. Thousands of solar jobs could be at risk, especially in California where adoption rates are among the highest.
Some analysts believe the Senate will strip the repeal language from the final version of the bill. Others warn that if it does pass, 2025 will go down as the last major year of solar affordability for middle-class homeowners.
Don’t Wait for the Clock to Run Out
Congress hasn’t made it official yet—but the writing is on the wall. Smart homeowners are acting now, not waiting to see what happens in D.C.
If you're in San Diego County, Sunny Solar Power is here to walk you through your options. From system design to claiming your credit, we’ll make it easy.
The sun’s not going anywhere—but your solar savings might. Let’s get started.
Comments