Solar Tax Credit Going Away Under Trump Bill?

In major solar tax credit news, the House of Representatives passed a bill in May 2025 that would make the solar tax credit go away for homeowners at the end of this year. If the legislation becomes law, the 30% Residential Clean Energy Credit would expire on December 31, 2025, years ahead of its scheduled 2032 sunset under the Inflation Reduction Act (IRA).

The solar tax credit under Trump currently includes two major incentives: the Residential Clean Energy Credit for homeowners and the Investment Tax Credit (ITC) for commercial and utility-scale projects. Both provide a 30% federal tax credit on eligible solar installation costs, including panels, inverters, racking, and battery storage installed with solar. Under current law, the residential credit runs through 2032, and the commercial ITC remains at 30% through 2033, with reductions beginning in 2034.

However, the new House bill treats these credits differently. While it proposes a full solar tax credit repeal for residential systems at the end of 2025, the commercial solar ITC would remain temporarily intact but begin phasing down in 2029. Under the proposal, the commercial credit would drop to 80% of its full value in 2029, then 60% in 2030, 40% in 2031, and be fully eliminated by 2032.

With the solar tax credit going away for homeowners and a future phase-down looming for commercial projects, the rooftop solar tax bill implications could be severe. The cost of going solar may rise sharply, creating deep uncertainty across the industry, especially for residential contractors and financing partners, at a time when clean energy deployment is more urgent than ever. The bill now heads to the Senate, where its outcome remains uncertain.

Is the Solar Tax Credit Going Away After 2025? House Vote Brings U.S. Closer

The House budget bill, passed in May 2025, targets federal clean energy programs and aims to lock in Trump-era tax policy. One of the biggest rooftop solar tax bill implications: the solar tax credit going away for homeowners starting in 2026. The legislation proposes ending the 30% Residential Clean Energy Credit, a major driver of residential solar growth across the U.S.

Industry groups like SEIA and the American Council on Renewable Energy warn the change would hit residential installers hard, especially those already navigating high interest rates and shrinking margins. As reported by Solar Power World, the legislation comes as layoffs rise and growth slows across the residential sector.

“If Congress does not change course, this legislation will upend an economic boom in this country that has delivered an historic American manufacturing renaissance, lower electric bills, hundreds of thousands of good-paying jobs, and tens of billions of dollars of investments primarily to states that voted for President Trump," according to a statement from Abigail Ross Hopper, president and CEO of the SEIA. 

The bill cleared the House on a largely party-line vote, but the Senate’s position is still unclear. Lawmakers are under pressure from constituents and clean energy advocates to preserve the credit, which has been a cornerstone of residential adoption.

If the bill becomes law, contractors expect a surge of projects in late 2025, followed by a sharp drop-off as the residential solar tax credit goes away, raising system costs and slowing demand. For smaller companies, the rooftop solar tax bill implications could mean delays, layoffs, and a thinner 2026 pipeline.

What the Bill Says About the Commercial Solar ITC

The House-passed budget bill proposes significant changes to the federal solar tax credit landscape. While the residential solar tax credit is going away at the end of 2025, the commercial ITC under Section 48E faces a phased reduction:

• 2029: 80% of the full credit

• 2030: 60%

• 2031: 40%

• 2032 and beyond: 0%

  
  

To qualify for any portion of the commercial ITC, projects must commence construction within 60 days of the bill's enactment and be placed in service by December 31, 2028.

Additionally, the bill introduces a provision that would prevent solar leasing companies from claiming the commercial ITC for third-party-owned residential systems. This change would eliminate a significant financing mechanism for residential solar adoption, particularly affecting lower- and middle-income households that rely on leasing options.

These developments underscore the urgency for contractors and developers to adjust their strategies. With the solar tax credit going away for homeowners and a phasedown for commercial projects, timely action is crucial to maximize available incentives and maintain project viability.

House Bill Could Lead to Solar Tax Credit Going Away for Leased Systems

In addition to the solar tax credit going away for homeowners, the House bill includes a provision that would block solar leasing companies, like Sunrun and other third-party ownership (TPO) providers, from claiming the commercial solar ITC under Section 48. This change would significantly reshape how residential rooftop systems are financed.

Historically, TPO providers have used Section 48 to claim the solar ITC for residential systems they own and operate, enabling popular options like $0-down leases and power purchase agreements (PPAs). Under the proposed bill, those third-party-owned residential systems would no longer qualify for the commercial credit, effectively cutting off a key incentive stream.

This restriction could have serious rooftop solar tax bill implications, especially for lower- and middle-income households that rely on leases to access solar. By limiting financing pathways, the legislation would reduce affordability and shrink participation in the residential market.

As recent solar ITC news coverage has noted, the bill appears to favor utility-scale and large commercial developments while rolling back incentives for homeowners. Paired with the repeal of the Residential Clean Energy Credit, this proposal shifts federal solar support away from rooftop solar and toward centralized infrastructure.

Industry Responds to Solar Tax Credit News

Industry groups are raising concerns after the House passed a budget bill that would result in the solar tax credit going away for homeowners at the end of 2025. While the commercial solar ITC remains temporarily intact, its phase-down starting in 2029 adds more complexity and long-term uncertainty.

SEIA Warns of Dramatic Job and Investment Losses

The rooftop solar tax bill implications could be severe, according to the Solar Energy Industries Association (SEIA). Their analysis estimates it risks losing nearly 300,000 clean energy jobs and $220 billion in planned solar and storage investment by 2030 if enacted.

SEIA President Abigail Ross Hopper emphasized, “Passing this bill would create a catastrophic energy shortfall, cede AI and tech leadership to China, and damage some of the most vital sectors of the U.S. economy.”

Rooftop Installers Sound the Alarm About the Solar Tax Credit Going Away

Contractors are closely watching the legislative process, especially those who rely on homeowner-owned systems. If the Residential Clean Energy Credit is eliminated, smaller installers could face delays, reduced margins, and slower sales pipelines. The solar tax credit going away is not yet final, but the possibility is already shaping business planning for 2025.

But even in the face of uncertainty, some see an opportunity to evolve. As the commercial solar ITC remains in place through 2028, contractors who have traditionally focused on residential rooftops may find it’s time to expand into light commercial solar projects, such as small business properties, churches, schools, and municipal buildings.

Market Reaction: Solar Stocks Recede With Threat of the Solar Tax Credit Going Away

The threat of the solar tax credit going away for homeowners sent shockwaves through financial markets. Following the House vote, investors reacted swiftly to the potential loss of one of the industry's most powerful demand drivers. On the day of the announcement, solar stocks saw steep declines: Sunrun dropped nearly 41%, SolarEdge fell 26%, and Enphase Energy slid 18%.

These companies are heavily exposed to the residential sector, where the 30% Residential Clean Energy Credit has long played a crucial role in making rooftop solar accessible and affordable. Analysts noted that the market response reflects investor concerns that project volume, financing demand, and consumer adoption could fall sharply in 2026 if the tax credit repeal becomes law.

Commercial projects, however, often have more complex permitting requirements than residential installations. These can include structural load calculations, site-specific fire code considerations, and utility coordination for larger interconnection loads.

GreenLancer can help streamline this transition. Our team provides fast, code-compliant commercial solar plan sets, engineering reviews, and stamped drawings, helping contractors navigate commercial permitting requirements efficiently. With experience across all 50 states, GreenLancer supports a smooth commercial permitting process, whether you're designing a small commercial rooftop array or a large multi-building system.

For residential installers looking to diversify in 2025, commercial solar offers a path forward, 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.

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Solar ITC News: Commercial Sector Provides a Silver Lining?

Some industry analysts note that maintaining the commercial solar ITC through 2028 provides a buffer for large-scale development. Wood Mackenzie explained that while the delay offers short-term stability, the steep phase-down starting in 2029 still forces accelerated project timelines and financial retooling

Solar Tax Credit Going Away? Senate to Decide Fate of Repeal

Following the House vote to repeal the Residential Clean Energy Credit and phase down the commercial solar ITC, the spotlight now shifts to the Senate. While the bill proposes the solar tax credit going away for homeowners after 2025, its final outcome is far from certain.

The legislation will be reviewed by key Senate committees, including Finance and Budget. Hearings or markups could begin as early as June or July 2025, with possible floor votes before the August recess. However, partisan divides and broader budget debates could delay or reshape the bill.

Key lawmakers to watch include Senate Finance Chair Ron Wyden (D-OR), a vocal supporter of clean energy incentives, and moderate senators from states with growing rooftop solar markets. If the Senate modifies or rejects the repeal language, the legislation would move to a reconciliation process.

For now, the solar tax credit going away remains a proposal, but the window for stakeholders to weigh in is closing fast.

Rooftop Solar Tax Bill Implications: What Installers Should Do Now

With the residential solar tax credit potentially going away at the end of 2025 and the commercial solar ITC phase-down beginning in 2029, solar companies need to plan ahead. Whether you're focused on residential, commercial, or both, 2025 is a critical year to lock in available incentives and protect your margins.

For residential contractors, that means accelerating homeowner projects now. Moving quickly from signed contract to construction will be essential to complete installations before December 31, 2025, and avoid delays caused by permitting backlogs or equipment shortages.

The rooftop solar tax bill implications are already shaping business strategy. GreenLancer can help installers streamline permitting, reduce soft costs, and keep projects moving while incentives are still in place.

Historical Context of the Solar Tax Credit

The solar tax credit is part of a long-standing bipartisan policy that has helped drive solar adoption in the U.S. for nearly two decades. The solar ITC was first created in 2005 under President George W. Bush as part of the Energy Policy Act. Originally set to expire after just two years, it has been extended several times by both Republican and Democratic administrations.

During Trump’s first term, the solar tax credit remained in place. Although the administration focused less on expanding renewable energy, it did not attempt to repeal or weaken the credit. In fact, in December 2020, Trump signed a bipartisan COVID-19 relief and spending bill that included a two-year extension of the solar ITC, delaying the phase-down schedule and keeping the credit at higher levels.

Now, in Trump’s second term, the policy continues—for now. Because the 30% tax credit is written into federal law, it can’t be changed by executive order. However, proposed legislation in Congress could make the solar tax credit go away at the end of 2025, years ahead of schedule. If passed, the rooftop solar tax bill implications would be far-reaching, impacting residential adoption, contractor pipelines, and long-term investment strategies.

Until the bill becomes law, the Trump-era solar tax credit remains a critical incentive for residential and commercial solar projects across the country.

FAQ: Solar Tax Credit Going Away?

The federal solar tax credit remains one of the most effective incentives for both residential and commercial solar projects in the U.S. As of May 2025, the Residential Clean Energy Credit and the commercial solar ITC are still available at 30%. However, a new House bill has introduced uncertainty, raising the possibility of the solar tax credit going away for homeowners at the end of this year.

Here’s what you need to know based on the latest solar tax credit news and the potential rooftop solar tax bill implications.

Is the solar tax credit under Trump still available?

Yes—for now. The Trump solar tax credit, which includes the Residential Clean Energy Credit for homeowners and the ITC for commercial solar, is still active at 30% of eligible costs. This covers solar panels, inverters, racking, battery storage (when installed with solar), and installation labor.

Although the Trump administration has frozen or rolled back certain clean energy programs, the federal solar tax credit is written into law and remains unchanged until Congress passes new legislation.

Is the solar tax credit going away?

It might. In May 2025, the House passed a bill that would make the solar tax credit go away for homeowners after December 31, 2025—well ahead of its original 2032 expiration under the Inflation Reduction Act (IRA). If the Senate approves the legislation and it’s signed into law, the Trump-era credit for residential systems would end starting in 2026.

While the commercial solar ITC would stay at 30% through 2028, it’s set to begin phasing down in 2029. These proposed changes create major rooftop solar tax bill implications, prompting homeowners to act quickly and developers to adjust timelines for future projects.

What is the federal solar tax credit expiration date in 2025?

As of now, the official expiration date remains December 31, 2032, for residential and 2033 for commercial solar. However, if the proposed solar tax credit repeal becomes law, the residential credit would expire on December 31, 2025, and the commercial ITC would begin phasing down in 2029.

Until the bill becomes law, the full 30% credit still applies to qualifying systems placed in service in 2025.

What’s the latest solar tax credit news?

The biggest solar tax credit news in May 2025 is the House’s approval of a Republican-led budget bill that proposes an early repeal of the Residential Clean Energy Credit and a phasedown of the commercial ITC. The legislation now moves to the Senate, where debate is expected in the coming weeks.

Industry groups like SEIA have voiced strong opposition, warning of job losses and slower adoption. Many contractors are encouraging homeowners to move quickly in case the solar tax credit goes away, citing urgent rooftop solar tax bill implications if the proposal becomes law.

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.

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