NEW BILL PASSES HOUSE - 30% Solar Tax Credit Eliminated

The House passed a new bill last night that dramatically shortens the timeline for the residential solar tax credit, originally extended through 2032 under the Inflation Reduction Act (IRA). With this new legislation, the credit is now set to expire almost immediately.

To remain eligible, new construction must begin within 60 days of the bill’s enactment—placing the likely deadline around early October of this year. Alternatively, homeowners can meet this requirement by investing at least 5% of the total project cost in materials by that deadline. Additionally, all qualifying projects must be placed into service by December 31, 2028.

This sudden shift has created an unprecedented sense of urgency in the U.S. solar industry. Homeowners now have just over two months to finalize a contract and begin construction, or make a qualifying deposit - to secure the tax credit.

Importantly for Leases and Power Purchase Agreements (PPA), this provision is retroactive to all of 2025. That means residential solar systems installed this year under a lease or power purchase agreement (PPA) will not qualify for the credit. Only systems purchased outright or financed with a loan will remain eligible under Section 25D. As a result, leases and PPAs are expected to decline sharply or disappear altogether.

As Abigail Ross Hopper, CEO of SEIA puts it: 

“If Congress does not change course, this legislation will upend an economic boom in this country that has delivered an historic American manufacturing renaissance, lower electric bills, hundreds of thousands of good-paying jobs, and tens of billions of dollars of investments primarily to states that voted for President Trump."

This unworkable legislation is willfully ignorant of the fact that deploying solar and storage is the only way the U.S. power grid can meet the demand of American consumers, businesses, and innovation. If this bill becomes law, America will effectively surrender the AI race to China and communities nationwide will face blackouts.  

“But that’s not all: Americans’ electric bills will soar. Hundreds of factories will close. Hundreds of billions of dollars in local investments will vanish. Hundreds of thousands of people will lose their jobs. Families will lose the freedom to control their energy costs. And our electric grid will be destabilized.  

“It’s not too late for Congress to get this right. The solar and storage industry is ready to get to work with the U.S. Senate on a more thoughtful and measured approach to unleashing true American energy dominance to create a brighter future for all Americans.” 

https://seia.org/news/solar-and-storage-industry-statement-on-house-passage-of-reconciliation-bill-that-would-dismantle-greatest-industrial-revival-in-u-s-history-provoke-dangerous-energy-shortage/