Residential Solar Tax Credit Going Away In US After 2025
- Sarah Lozanova
- Sep 25
- 7 min read
Updated: 18 hours ago
Table of Contents
The residential solar tax credit is going away after 2025, creating one of the most urgent deadlines solar homeowners and contractors have faced in years. Under the Big Beautiful Bill changes, the 30% solar tax credit (Section 25D) 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. That means completing design, permits, inspections, interconnection, and in many cases, obtaining Permission to Operate (PTO). For solar installers, this short timeline makes project management critical—any delay could cause customers to lose out on the entire residential solar tax credit.
As the solar tax credit deadline approaches, both homeowners and contractors are asking the same question: what exactly must be finished before December 31, 2025? This guide breaks it down with a step-by-step checklist and explores what the solar tax credit going away means for the solar industry moving forward.
For over a decade, GreenLancer has supported solar professionals nationwide with design, engineering, and permitting services. We've completed over 200,000 clean energy projects, helping installers adapt to policy shifts like the changing solar ITC. Now that the solar tax credit is ending, project timelines matter more than ever.
When Does the Solar Tax Credit End?
The answer is clear: the residential solar panel tax credit under Section 25D officially expires on December 31, 2025.
Unlike past versions of the law, there is no phase-down period or gradual reduction. To receive the full 30% solar panel tax credit, your system must be installed, operational, and capable of generating electricity by the end of 2025. Any project completed after this date will not qualify for the residential solar tax credit.
This makes 2025 a critical year for scheduling, permitting, and interconnection. Installers should plan ahead to ensure their customers don’t miss the deadline, and homeowners should move quickly if they want to secure the incentive before the solar tax credit going away becomes a reality.
What Homeowners Need To Do Before December 31, 2025
To qualify for the full 30% residential solar tax credit before it expires, homeowners need more than a signed quote. The IRS requires that your system be installed and operational by the end of 2025. According to IRS guidance (Notice 2018-59), “placed in service” means the property is in a condition of readiness and availability for its specifically assigned function. For solar, that means being fully capable of delivering power to your home or the grid.
In many jurisdictions, utilities also require Permission to Operate before the system can legally send electricity to the grid. With the solar tax credit going away after December 31, 2025, missing any of these steps could mean losing thousands in incentives. Here’s a checklist to keep your project on track:
✅ How to Meet the 2025 Residential Solar Tax Credit Deadline
Signed Contract & Down Payment - Secure your project with a signed agreement and deposit. Installers are already booking out months in advance for 2025. Delaying this step could push your project past the solar tax credit ending deadline.
Permitting & Plan Sets - Every project requires plan sets reviewed and approved by your local Authority Having Jurisdiction (AHJ). This process can take weeks or even months. Submitting complete, code-compliant drawings early helps avoid bottlenecks.
Utility Interconnection - Many utilities require an interconnection application and approval before your system can be energized. Without this, you may have panels on your roof but still not qualify for the solar panel tax credit.
Installation & Inspection - Your solar system must be placed in service — fully installed, inspected, and capable of producing electricity, no later than December 31, 2025. Just purchasing equipment or signing a contract does not qualify.
Permission to Operate (PTO) - While IRS guidance emphasizes “installed and operational,” utilities often require PTO before you can legally export power. This step is critical for proving your system is live. Services like GreenLancer can assist with permit-ready solar plan sets and interconnection applications to keep projects moving toward PTO.
Commercial Solar ITC Still Available With Tighter Deadlines
The commercial solar tax credit (Section 48E) is still active, but recent policy changes have shortened the timeline and narrowed ITC eligibility criteria.
Projects that begin construction by July 4, 2026, can still claim the full 30% solar tax credit, often using the four-year safe harbor window.
However, a July 2025 executive order directs the Treasury to narrow what qualifies as “beginning construction.” Minimal actions like equipment deposits may no longer count. Instead, substantial onsite physical work will likely be required.
Any project started after July 4, 2026, must be fully placed in service by December 31, 2027, to receive federal solar incentives. Missing this window means losing the commercial solar ITC entirely. Developers and EPCs should act quickly, document progress, and plan around these updated requirements.
Why The Solar Tax Credit Going Away Matters
The solar Investment Tax Credit (ITC) has been one of the most effective tools for driving adoption of clean energy in the U.S. It has helped millions of homeowners lower upfront costs and enabled commercial developers to expand access to solar power.
Now, with the solar tax credit ending, both residential and commercial solar customers face urgent timelines. Installers must act fast to design, permit, and complete projects before the incentive disappears. If you’re considering going solar or taking on new commercial projects, now is the time to act.
Guidance for Installers: Preparing for the 2025 Solar Tax Credit Deadline
With the residential solar tax credit going away on December 31, 2025, installers face one of the busiest years in recent memory. To keep projects on track and protect customer solar incentives, contractors and EPCs should focus on four key areas:
Managing Scheduling Bottlenecks - As deadlines approach, every installer will be under pressure to complete jobs quickly. Create realistic installation schedules and plan buffer time for unexpected delays such as weather, supply chain issues, or inspection rescheduling.
Submitting Permit-Ready Plan Sets Early - Permitting can take weeks or even months, depending on the jurisdiction. Getting permit-ready solar plan sets submitted early ensures approvals don’t hold up installation. Partnering with an experienced engineering service can help reduce soft costs and avoid rejections.
Clear Homeowner Communication - Many homeowners don’t realize that just signing a contract doesn’t guarantee the solar panel tax credit. Communicate early and often about what it means to have a system “installed and operational” by the IRS deadline. Setting expectations now avoids last-minute frustration.
Documenting Project Milestones - EPCs should maintain detailed records of design approvals, permit filings, equipment deliveries, and installation progress. In the event of an IRS audit, clear documentation will help prove that projects met the requirements before the solar tax credit ending date.
What Happens After the Solar Tax Credit Goes Away in 2025?
While the residential solar tax credit is ending, opportunities for solar growth remain strong in other sectors. Installers who want to maintain momentum after 2025 can look to:
Light Commercial Projects – Schools, small businesses, and office parks often have large roof or parking lot space for solar. These projects still qualify for the commercial solar tax credit (ITC) if they meet Section 48E deadlines.
Nonprofits & Municipal Sites – Churches, community centers, and municipal buildings are often ideal candidates for solar. With tighter budgets, they benefit from long-term energy savings, and many can still access incentives.
Community and Shared Solar – Even without the residential solar panel tax credit, community solar programs may expand as utilities and developers look for new customer bases.
For contractors, this transition period is an opportunity to diversify services. While the solar tax credit going away for homeowners will reduce demand in that segment, commercial and nonprofit projects remain strong paths for growth, especially for installers who build the permitting and engineering capacity to compete in these markets.
That’s where GreenLancer can help contractors pivot with confidence. We provide fast, code-compliant commercial solar plan sets, engineering reviews, and PE-stamped drawings nationwide. Whether you're designing a 50 kW system for a school or outfitting a municipal facility, GreenLancer helps you navigate permitting and engineering requirements efficiently.
For residential installers looking to diversify in 2025, now is the time to prepare, and GreenLancer makes it easier to make that leap. Click the link below to learn more about our permit-ready solar plan sets and engineering services.
FAQ: Solar Tax Credit Going Away After 2025
As the residential solar tax credit deadline approaches, homeowners and installers have practical questions about what qualifies and what doesn’t. Here are some of the most common concerns about the solar tax credit going away in 2025.
Is the residential solar tax credit going away in 2025?
Yes. The residential solar panel tax credit ends on December 31, 2025. There is no phase-down or extension — projects must be installed and operational by that date to qualify.
Does my system need PTO to qualify for the solar panel tax credit?
The IRS requires that systems be installed and operational by the deadline. In many jurisdictions, that also means receiving Permission to Operate (PTO) from your utility. If PTO is required where you live, make sure interconnection paperwork and inspections are complete well before year-end.
Can I claim the tax credit if my system is only partially installed?
No. A partially installed system does not qualify. To claim the solar tax credit, your system must be fully placed in service and capable of generating electricity by December 31, 2025.
Does battery storage qualify under the 2025 solar tax credit?
Yes. Battery storage systems installed together with solar panels are eligible under the 2025 solar tax credit. Stand-alone batteries may not qualify unless installed as part of a solar project, so check eligibility with your installer.
What if my project gets delayed past the deadline?
If your system is not installed and operational before the solar tax credit ending date of December 31, 2025, you will not receive the federal incentive. Delays in permitting, interconnection, or installation could cause you to miss out on thousands in savings, so starting early is critical.
Whether you're a solar contractor looking for fast, code-compliant permit plan sets or a homeowner in need of expert solar repairs or upgrades, GreenLancer has you covered. Our U.S.-based team and nationwide network of licensed professionals deliver reliable support for every stage of your solar projects.
About the Author
Sarah Lozanova is the Content Marketing Manager at GreenLancer and a solar marketing writer with over 15 years of experience in the renewable energy industry. She holds an MBA in Sustainable Management and has written extensively on solar permitting, warranties, energy storage, and EV charging for installers, homeowners, and industry leaders.