Strong government incentives like the Residential Clean Energy Credit have been the driving force behind the solar revolution in the US, in addition to sunlight. This initiative has been lowering the cost of installing a solar system for households nationwide for many years.
However, a significant shift is now imminent.
The significant 30% federal tax credit for solar systems is scheduled to expire on December 31, 2025, following the signing of the One Big Beautiful Bill Act (H.R.1) on July 4, 2025. This might be your last opportunity to lock in the entire savings if you’re thinking about installing a solar system.
What’s Changing?
This year marks the official termination of the Section 25D tax credit, which enables homeowners to deduct 30% of the cost of their solar system and battery storage. Homeowners must thus move quickly because the financial benefits of beginning a solar project in 2026 will be diminished.
Although they don’t directly help homeowners, certain business-related incentives, such as Section 48E, will still be available for leased systems and Power Purchase Agreements (PPAs). In the end, the most economical course of action is to purchase your solar system before the end of 2025.
What Does “Expenditure Incurred” Mean?
The definition of eligibility in the new statute is a crucial aspect. The credit does not always apply when the solar system is fully installed; rather, it applies to costs “incurred” by December 31, 2025. In many situations, this could imply that you might still be eligible if you signed a contract and paid before the due date.
The safest course of action, therefore, is to make sure your solar system is completely installed and functional by the end of 2025, as the IRS has not yet released definitive instructions.
What About Leased Solar Systems?
Through 2027, PPAs and leased systems are still eligible for Section 48E incentives; however, keep in mind that the leasing firm, not you, receives the tax benefit. You won’t get the immediate savings that come with owning your own solar system, even though your monthly costs can be a little lower.
No New Solar Excise Tax — A Relief
A solar excise tax was suggested in earlier iterations of the law, which would have increased the price of installing solar systems. Thankfully, that proposal was shelved before final approval, so solar energy is still more affordable than many had anticipated.
Why You Shouldn’t Wait
Your solar investment could be severely impacted if you miss the 2025 tax credit window. The payback period for a solar system lengthens considerably without the 30% credit, often by as much as five years, depending on your state:
- Arizona: 11 → 15.7 years
- California: 5.1 → 7.3 years
- Florida: 10.9 → 15.5 years
- New York: 8.1 → 11.6 years
Future homeowners may be deterred from switching by this lengthier return period.
Why You Should Act Before September 2025
A solar contract should be signed by September 1, 2025, according to experts, because of the time required for design, permits, utility approvals, and installation. If you wait until that point, you can lose your eligibility for the tax credit.
How Ramsun Solar Design Keeps You Ahead
Our goal at Ramsun Solar Design is to assist solar firms and contractors in providing high-quality, timely, and compliant solar system designs that maintain project timelines.
- ⚡ PV system designs in just 24 hours
- 📄 Permit-ready plans approved by 98% of AHJs
- 🔋 ESS + EV charger integration
- 🏗 Stamped structural/electrical drawings
- ✅ Fast turnaround and global support
You get more than simply drawings when you work with Ramsun; you also get a reliable partner who helps you deliver your solar system on schedule and within code.
Final Thoughts: The Sun is Setting on This Credit
One of the most significant financial incentives for homeowners wishing to install a solar system will expire at the end of 2025. You could lose hundreds of dollars and lose years of return on investment if you wait.
Before the door closes, let Ramsun Solar Design assist you in crossing the finish line.
📞 Are you prepared to begin? Before it’s too late, let’s plan your solar future.
E-mail: info@ramsunsolardesign.com