The federal solar tax credit—officially the Residential Clean Energy Credit (previously part of the ITC regime)—remains one of the most powerful incentives available to homeowners. It allows homeowners to claim 30% of the cost of solar installation as a federal tax credit.

Congress has now passed the One Big Beautiful Bill Act (“OBBB”) on July 4, 2025, which legally ends residential solar tax credits at midnight on December 31, 2025. Homeowners must have their solar systems installed and working by that date to qualify for the full 30% credit. (Latham & Watkins)

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A Quick History of the Solar Tax Credit

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• 2005 – The original solar tax credit (ITC) is introduced at 30%. (arka360.com)

• 2008 – A $2,000 cap is removed; credit extended. (arka360.com)

• 2015 – Congress schedules a gradual phase-down aiming to eliminate the residential credit by 2022. (Solar)

• 2022 – Inflation Reduction Act restores & extends the 30% credit through 2032, with reductions in 2033 and 2034. (Solar)

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Where Things Stand Now (2025)

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• The One Big Beautiful Bill Act, signed into law on July 4, 2025, sets December 31, 2025 as the end date for homeowners to install solar panels and claim the 30% tax credit. (Solar)

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• After that date, the residential solar tax credit will no longer be available under current law. (Solar)

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What This Means for Homeowners

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If you install solar in 2025 and your system is working by December 31, you can still claim the full 30% credit. But if you wait until 2026 or later, that credit has expired for residential systems under current law.

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Without this credit, going solar becomes significantly more expensive for homeowners. Many financing options and savings that depend on the tax incentive won’t apply once the credit ends.

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How to Lock In the 30% Credit

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Install in 2025 — Make sure your contract, installation, and inspection are completed so that your system is “placed in service” before midnight on December 31, 2025.

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Start right away — Because solar projects often take several months from contract to completion, delaying could mean missing the deadline.

Work with a trusted installer — Choose a company that understands the law and helps you ensure your system qualifies on time like Robinhood Solar Group.

Verify eligibility — Make sure you meet all requirements (ownership, location, permits, etc.) and save all documentation.

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Bottom Line 2025 is the last year that homeowners can claim the full 30% solar tax credit under the current law. If you’ve been thinking about going solar, acting now can save you thousands and lock in one of the best incentives we’ve seen.  [Get Your Free Solar Quote Today]

Disclaimer

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This content is provided for informational purposes only. Tax incentives and legislation are subject to change. Please consult a qualified tax professional for advice specific to your situation.

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