Yes, the 30% Residential Clean Energy Credit (ITC) for solar and battery storage is effectively going away for most homeowners, as the One Big Beautiful Bill (OBBB) passed in 2025 mandates that the 30% credit will not be available for systems placed in service after December 31, 2025.
Here's a timeline of how this law was formed. July 4 Update: President Trump signed the “One Big Beautiful Bill” (OBBB) into law, cementing an early termination of the 30% solar tax credit claimed by homeowners at the end of 2025.
Officially defined under Section 25D of the U.S. tax code, the 30% residential solar tax credit officially expires on December 31, 2025, with no phase-down or extension. To qualify, homeowners must have their systems fully installed and operational before the solar tax credit 2025 deadline.
If you want to own your solar system and claim the 30% federal tax credit, the clock is ticking: install by the end of 2025. Even without the credit, California homeowners still stand to gain by going solar due to the state's sky-high utility rates.
Storage projects can continue to access the full ITC through the end of 2033. The ITC begins to phase out in 2034 and 2035. Although the ITC will remain available for another decade, starting in 2026, storage will be subject to additional FEOC restrictions.
With the passage of the One Big Beautiful Bill in July of 2025, also known as the Working Families Tax Cut, energy tax credits are now set to expire after December 31, 2025.
Starting in 2026, the 30% Federal Solar Investment Tax Credit (Section 25D) will no longer be available for residential solar projects. That's a significant change for the U.S. solar industry and naturally raises an important question for homeowners and contractors alike: What's next for solar?
The "33% rule" in solar panels refers to two main concepts: a fire-safety code requiring wider firefighter access paths if panels cover more than 33% of a roof's area, and an oversizing guideline allowing up to 33% more panel wattage than an inverter's AC rating for better energy harvest, due to real-world conditions being less ideal than lab ratings. A less common meaning relates to the theoretical efficiency limit of single-junction solar cells (around 33%).
The solar panel tax credit allows filers to take a tax credit equal to up to 30% of eligible costs you incurred by December 31, 2025. There is no income limit to qualify. There is no solar tax credit after December 31, 2025.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
As the incentive landscape changes and eligibility becomes more complex, many people are asking the same question: “Is solar and energy storage still worth it without the full federal tax credit? The answer is yes. But, the way homeowners see value has shifted.
Despite that growth, Trump's tariffs still negatively impacted the industry, according to the Solar Energy Industries Association (SEIA): Tariff increases led to 62,000 fewer solar jobs. Installation prices for homeowners increased. $19 billion in new private sector solar investment was lost.
The residential solar tax credit will now end on the last day of 2025, about a decade ahead of schedule. Your project needs to be fully installed by the end of the year to qualify. The commercial credit will last a little bit longer, but not much.
At the end of 2025, the individual tax provisions in the Tax Cuts and Jobs Act (TCJA) expire all at once. Without congressional action, most taxpayers will see a notable tax increase relative to current policy in 2026.
One of the most popular home battery options is the Tesla Powerwall, a sleek lithium-ion battery that holds 13.5 kilowatt-hours (kWh) of energy. The Tesla Powerwall 3 costs about $15,400 before incentives and taxes are considered.
Disadvantages of solar energy
Clean Energy Production Tax Credit and Clean Energy Investment Tax Credit. Starting January 1, 2025, the Inflation Reduction Act replaces the traditional PTC with the Clean Energy Production Tax Credit (§1 3701) and the traditional ITC with the Clean Electricity Investment Tax Credit (§ 13702).
In the March 2025 Federal Budget, two new income tax cuts were announced to commence from 1 July 2026 and 1 July 2027. These cuts have now been legislated. The changes announced are: From 1 July 2026, the 16% tax rate, which applies to taxable income between $18,201 and $45,000, would be reduced to 15%
In 2025, the average household can save around $1,500 per year on electric bills with a residential solar panel system. Most homeowners can break even on their solar investment within 10 to 12 years, but actual savings will depend on your specific system and where you live.
Thus, perovskite solar cells have emerged as a promising new solar panel technology due to their low production costs and high efficiency. Perovskites are a family of semiconductor materials with a specific crystal structure, named after the mineral perovskite.