Budget Bill now Set to Shorten Solar Tax Credit to the End of 2025

Washington, D.C. — July 3, 2025 — In a narrow vote today, the House passed President Trump’s so-called “One Big Beautiful Bill” (BBB), sending it to the president’s desk for his signature.

Of particular concern, Trump’s tax and spending package will gut financial incentives for clean energy programs that for decades have helped American taxpayers recoup a portion of the cost of installing solar panels and lowered monthly energy bills.  

Here’s what you need to know:

Tax credits are still available for rooftop systems for a limited time.

Currently, homeowners and renters can recoup 30% of the cost of solar panels and other clean energy home upgrades like batteries through the Residential Clean Energy Credit program, which the Biden administration had extended through 2032.

Today’s passage of the new budget bill radically shortens that deadline to the end of this year: Dec 31, 2025. 

This signals a race to purchase and install rooftop solar by the end of 2025 in order to benefit from the 30% Investment Tax Credit. It isn’t immediately clear whether construction needs to be complete by Dec 31, 2025 in order to qualify. We should gain clarity on that point as this news unfolds.

Households that lease solar panels (rather than buy them) may benefit from the tax credits for two additional years. According to the new budget bill, companies offering solar panel leasing programs qualify for a similar tax credit available to solar leasing firms until the end of 2027, and may pass those savings onto customers. 

Does this bill affect people who already have residential rooftop solar panels?

No. The bill impacts new solar customers who buy panels after Dec. 31, 2025 and residential customers who lease panels after 2027. 

Is there any good news? 

These are darker days for rooftop solar in California. The new budget bill comes after California slashed credits for solar customers who send energy back to the grid, and proposals to reduce those credits even further. But solar energy will continue to pay off for homeowners who are in it for the long haul, and with the help of battery backup, customers can now completely detach themselves from the greedy grips of those large-scale utility companies.