The One Big Beautiful Bill Act eliminated the federal solar tax credit, and experts are urging homeowners to act before it's too late.
What's happening?
The Inflation Reduction Act created incentives for people to invest in clean energy through 2034, but those benefits will now end Dec. 31, EnergySage reported.
The platform said buying a solar system by the end of the year would save the average homeowner $9,000 via the 30% federal tax credit. Solar panels will remain affordable in 2026 and beyond because of falling equipment costs and rising energy costs, but it will take 15 to 20 years for installations to pay for themselves instead of eight to 10.
EnergySage noted that this will impact working families the most, as 44% of households that installed solar power in 2023 earned less than $100,000. "Without the federal credit, solar becomes significantly less accessible to middle-class homeowners seeking true energy independence," it stated.
Why is this important?
While the cost of solar energy fell from $3.80 per watt in 2014 to $2.50 per watt in 2024, residents are paying more for power from the grid because of rising demand and utilities' power generation and infrastructure expenditures. EnergySage added that artificial intelligence-powered data centers are also causing an issue.
"Despite a growing number of these massive data centers coming online, Congress just ended the main incentive for this grid-stabilizing technology," the company stated. "Without distributed solar generation to help balance the load, the grid becomes more vulnerable to load-shedding requests, brownouts, and rolling blackouts."
Solar systems and battery backups reduce reliance on the grid and lock in rates at or near $0, but this change could increase electricity costs for the average household by $143 annually, per EnergySage.
It pointed out that the average 11-kilowatt setup costs about $20,000 instead of $28,160 with the credit. It takes two to four months to get solar installed. "The solar industry expects a significant rush of installations in the second half of 2025," according to the site. "This could lead to longer wait times and scheduling challenges for homeowners who delay their decision."
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What's being done about the end of the tax credit?
While it's too late to contact your representatives to push back against this bill, you can install solar panels to reap the rewards of the IRA before they vanish. (Companies have longer to act.)
If you're on the fence, EnergySage has a mapping tool that shows costs and incentives by state. This and other free tools will enable you to compare quotes and find vetted local installers. Not only will you save thousands of dollars, but you will also reduce the heat-trapping pollution that is pushing global temperatures higher and contributing to increasingly frequent and severe extreme weather events.
"The elimination of the residential solar tax credit represents a fundamental shift in federal energy policy, ending two decades of bipartisan support for home solar installations," EnergySage concluded. "For millions of American homeowners, the next six months represent their last opportunity to access this significant federal incentive."
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