When we renovated our home last year, we aimed to make it as eco-friendly as possible. Part of that process was to make sure our roof was set up to install solar panels, which I planned on doing in 2026. The plan was: home renovation in 2023, electric vehicle purchased in 2025, and solar panels installed in 2026.
But my cute little plan was thrown a curveball a few weeks ago. With the passage of the OBBA (aka the “Big Beautiful Bill”), my timeline just got moved up. To right now, or even better, yesterday. Why?
The Residential Clean Energy Credit that provides a 30% nonrefundable tax credit to homeowners (originally created by the Inflation Reduction Act) expires at the end of 2025 instead of 2035, when it was originally set to expire.
So for those of you who have either been on the fence about getting solar or dragging your feet, it’s time to act.
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How Much Time Do I Have?
Less than you think. Solar panels need to be installed and operational before the end of 2025 to take advantage of the tax credit. While installation generally takes just a few days, there are a number of steps that involve other players, like building permits from the city and interacting with your utility company. Each of these organizations has its own deadlines and timetables to work with, so those extra weeks need to be built into your timetable.
How Much Savings Are We Talking About?
More than you think. There is no dollar limit on the credit, just a flat 30% of what you spent. Depending on how many panels you install and if you add a battery, this could be in the tens of thousands of dollars. When you are in the five figures for savings, that is worth moving quickly. Plus, not to mention the sooner you get the panels working for you, the sooner you start the clock in reducing your electrical costs.
What’s the Fine Print?
The credits are designed to incentivize owning panels, not leasing. However, if you plan on leasing, it might behoove you to act soon as well, as the solar company you are leasing from will currently get the tax credit, which could result in a lower lease payment for you. Currently, solar panel companies get the tax credit if you lease, but their credit is also about to expire by 2028, so be prepared for the cost of solar to go up for leases too. If you want to learn more about whether it makes sense to buy or lease your panels, you can dive deeper into this LA Times article I contributed to.
The date is the other big thing to be aware of. You only have until December 31st to have the panels fully installed and operational. So if the panels get turned on January 1, 2026, you can kiss that tax credit goodbye. I have a general policy to not mess with the IRS when it comes to their deadlines.
As with any tax decision, make sure to consult with your CPA to assess if the tax benefit will work for your situation, as the credit is not refundable and since the law is expiring, it can’t be rolled forward into future years.
Move Fast. But Still Shop Around.
Solar companies have been going out of business right and left. A combination of policy changes, high interest rates, and supply chain issues have put significant strain on the industry.
As you shop around for a company, do some due diligence not only in pricing but also in how long they have been operating and what sorts of warranties they offer. I would also go a step deeper in analyzing if they are going to be around to fulfill whatever warranty you sign up for.
As a clean energy enthusiast, I was really disappointed to see the tax credits rolled back (it’s worth noting that the electric vehicle credit is also expiring, albeit even earlier, on September 30, 2025 – so don’t wait on that one either). But the optimist in me reframed to think about how this bill has created greater urgency for many consumers, myself included. If a huge number of us move on installing solar ASAP, we are able to make a shift towards a greener economy sooner. But just remember if we are all doing this at the same time, solar shopping is about to get a lot busier.
