Time Running Out to Claim 30% Solar Tax Credits

In late May 2025, House Republicans advanced a sweeping tax-and-budget plan that would end the 30% federal residential solar tax credit nearly a decade early‍.  If enacted as-is, the “Residential Clean Energy Credit” (the 30% Investment Tax Credit for rooftop solar and home battery storage) would be terminated after December 31, 2025. Under today’s law, that credit is set to remain at 30% through 2032 (phasing down to 2035) as part of the Inflation Reduction Act (IRA), so this is effectively a 9–10 year acceleration of the phase-out.  Reuters reports that the House bill “would remove the 30% federal tax credit for taxpayers who install solar rooftop systems,” warning it would “pose a significant challenge to the industry”  In practical terms, any home solar system (or paired battery) must be installed and inspected by Dec. 31, 2025 to qualify for the 30% credit – after that, the federal deduction would drop to 0%.  Solar industry groups warn this cut could “upend an economic boom” of clean energy investment, jobs and lower electricity bills.

What Was Approved and What’s Next

The photo above shows a suburban neighborhood with many homes sporting rooftop solar panels – all of which currently qualify for a 30% federal tax credit. Under the new House proposal, any system not completed by 12/31/2025 would forfeit that credit. The House’s budget reconciliation “big, beautiful” bill (sometimes called Trump’s tax-and-spend plan) cleared the House on May 22, 2025.  It now heads to the Senate, where Majority Leader Sen. Mitch McConnell has indicated leadership wants changes.  Senate votes are expected in June or July before Congress breaks for the August recess‍.  The final law could look different – a handful of GOP senators in swing states have signaled they want to preserve at least some clean-energy incentives.  (In fact, 21 House Republicans had earlier sent a letter urging leaders to protect key IRA credits to avoid disrupting projects in their districts.)  But as passed by the House, the proposal explicitly ends the residential solar ITC after 2025.

Meanwhile, all the IRA-era electric vehicle (EV) tax credits are likewise on the chopping block.  The House plan would repeal the new $7,500 EV credit (Section 30D) and related credits for used and commercial EVs (Sections 25E and 45W) after 2025‍.  In other words, under current proposals the $7,500 per-vehicle tax break for buying an electric car would only apply to vehicles delivered before 2026.  (A limited extension for vehicles from manufacturers who haven’t yet hit the 200,000-unit threshold is included for early 2026.)  The tax credit for installing home EV chargers (Section 30C) would also expire after 2025.  In sum, nearly all major green energy tax breaks are set to expire after 2025 under the House draft.  For clarity, here are some of the key credits targeted:

• Residential Solar & Storage Credit (Sec 25D) – 30% tax credit for home solar panels/batteries. Eliminated after Dec. 31, 2025‍.
• New EV Credit (Sec 30D) – up to $7,500 credit for buying a new electric car. Repealed after 2025t.
• Used EV Credit (Sec 25E) – up to $4,000 credit for a qualifying used EV. Repealed after 2025‍.
• Commercial EV Credit (Sec 45W) – for trucks & buses. Repealed after 2025.
• EV Charger Credit (Sec 30C) – 30% credit for home/work charging stations. Repealed after 2025.
• Home Efficiency Credit (Sec 25C) – 30% credit for windows, doors, heat pumps, etc. Repealed after 2025.
• New Home Efficiency Credit (Sec 45L) – credit for building green homes. Repealed after 2025.

All of these would vanish unless Congress changes course.  (By contrast, under current law these IRA credits generally remain in force through 2032 or beyond.)  Notably, the House bill also strips solar credit eligibility from leased systems and PPAs, meaning leased panels on homes would no longer get the tax break.  As Reuters explains: it would “prevent companies that lease solar panels from claiming a key tax credit,” and the tax credit for homeowners who own their panels “will also be eliminated”.

Impact on Home Solar and Storage Projects

For homeowners considering solar panels or battery backup, the implications are immediate.  To lock in the 30% credit, a project must be installed and inspected by Dec. 31, 2025.  That means contractors need several months to design, permit, and install a system – so signing a contract by this summer is critical.  Solar.com warns that starting a project after summer carries the risk of missing the deadline‍.  In fact, Solar.com states “if you’ve been thinking about solar, now is absolutely the best time to go forward with your project,” because “solar projects typically take several months” and delays can push installations into 2026 when the credit would be gone.  In short, homeowners may want to move fast on quotes and permits.

Even projects already in progress could be affected.  If a system isn’t placed in service (meaning fully installed and certified) by the deadline, the homeowner would forfeit the 30% credit.  Solar companies warn that an expected rush of demand may cause backlogs, further tightening timing.  Losing the 30% credit is a big financial hit – for example, a $30,000 system would lose a $9,000 tax break – which could mean the difference between a 5-year payback and a much longer one.  In addition, the House proposal adds foreign-content restrictions and other new rules to several clean energy credits, making them “harder to use”.  Combined, analysts say these changes risk raising U.S. household energy costs and could slow or shrink local solar installation businesses.

On the positive side, the proposal grandfathered in any home system that finishes construction by 2025.  So systems already built (or in late-stage installation) earlier in 2025 will still get the credit under the House text.  But anyone waiting until 2026 or later would effectively see the federal solar/battery incentive cut to zero (unless the Senate reverses course).  The broader concern is that canceling the credit removes the main federal boost for residential clean energy.  Solar.com bluntly warns that if the law passes as written it would “remove any path for homeowners to access a federal tax credit for installing solar and/or battery storage”– likely slowing adoption and raising costs for small businesses in the solar market.

Impact on EV Purchases and Other Incentives

The congressional moves affect EV buyers too.  Currently, buyers of qualifying electric cars can claim up to $7,500 per vehicle under Section 30D of the tax code.  Under the new House plan, that credit ends after 2025.  For consumers, that means the EV tax credit will not be available for cars delivered in 2026 or later (except for a narrow 2026 extension for some manufacturers).  In practice, any consumer hoping to use the current credit should purchase and take delivery by year-end 2025.  (Note that the credit is claimed in the year you take ownership of the vehicle.)  Similarly, the $4,000 used-EV credit would disappear after 2025.  These deadlines apply no matter where you live, so families eyeing a Tesla, Ford Lightning, Nissan Leaf, or any other qualifying EV should finalize their purchase plans quickly.

Home battery storage incentives are tied to the solar credit too.  Under today’s law, homeowners can get the 30% credit on a battery even if installed without solar (as long as it uses renewable power).  Under the proposed changes, standalone batteries also lose the 30% credit after 2025 (since the entire 25D credit is repealed).  That means a significant grant for adding a Powerwall or other backup system would vanish.  Other “green” tax breaks – like credits for heat pumps, energy-efficient windows, or new energy-efficient homes – would similarly be eliminated after 2025.

For climate-focused homeowners, these developments are worrisome.  The credits were designed to accelerate investments in clean energy and lower utility bills; canceling them threatens those goals.  As one clean-energy trade group put it, eliminating these tax breaks “will upend an economic boom” of U.S. clean-tech manufacturing and “lower electric bills”.  If the credits go away, solar and EV prices effectively become higher, which could slow the shift to cleaner energy.

Act Now: How to Lock In Savings with US Power

Given the uncertainty, homeowners should move quickly if they plan to go solar or buy an EV.  Key steps include:

• Begin your solar project ASAP.  Get quotes, secure a contractor, and start permitting now.  Remember that installation and inspection must be done by Dec. 31, 2025 to qualify for the 30% federal credit‍.  Solar.com advises not to delay; projects contracted after late summer 2025 may miss the deadline.
• Finalize any planned EV purchase by 2025.  If you want the current EV tax credit (up to $7,500 new, $4,000 used), the sale must close before the end of 2025.  Talk to dealerships or finance companies now to lock in incentives.
• Consult your tax/financing advisor.  These changes affect your tax planning.  In many cases, homeowners finance solar around the ITC, so losing 30% changes payback.  A professional can help you evaluate the timing or find other incentives (state/local) that might apply.
• Reach out to your lawmakers.  The Senate could still revise the plan.  Let your U.S. Senators know you support clean energy tax credits (the “25D Residential Clean Energy Credit”) and explain why incentives matter for your community.  (Several House Republicans have already called for a more “targeted” approach to avoid upending existing projects.)

At minimum, consumers should treat 2025 as a deadline year.  Whether installing solar panels, adding a home battery, or buying an electric car, doing it before year-end 2025 locks in the current federal incentives.  After that, the federal savings drop to zero (unless Congress changes its mind).  Given rising energy prices and climate concerns, many families see these tax credits as vital to making clean-energy upgrades affordable.  

While the future of federal clean energy tax credits is uncertain, one thing is clear—2025 may be your last chance to take advantage of thousands of dollars in savings on solar panels, home batteries, EV chargers, and more. Delays in planning or installation could mean missing out on these valuable incentives altogether.

At US Power, we’re here to make sure that doesn’t happen. Our team of experts will walk you through every step of the process—from customized system design and financing options to permitting and installation—so you can secure your 30% tax credit and start saving on energy costs right away.

We understand how important these incentives are for families looking to invest in clean, affordable energy. That’s why we’re committed to helping you beat the deadline with confidence and ease.

Contact US Power today for a free solar consultation, and let’s lock in your savings before the window closes. Now is the time to act—and we’re here to help you every step of the way. Through our exclusive partnership with Qcells, one of the America’s leading solar technology providers, we’re able to offer top-tier solar products, faster installation timelines, and a higher level of service and support you won’t find anywhere else.

‍Sources: Congressional sources and experts confirm the above timeline.  The House Ways and Means Committee’s reconciliation bill (reported May 2025) explicitly repeals the 30% residential solar/battery credit (Sec.25D) and all major EV credits (Secs.30D, 25E, 45W, 30C) after 2025‍.

Links:
‍www.reuters.com
www.solar.com
www.taxfoundation.org