With the recent signing of the "One Big Beautiful Bill Act" into law, many energy tax incentives are being eliminated by the end of 2025. Because of this, Tesla is forecast to see a steep decrease in its energy storage sales.
What's happening?
The federal Investment Tax Credit for residential solar and battery storage installations will now be ending on Dec. 31. This means homeowners will no longer be able to claim the 30% tax credit for systems purchased after this date. According to TechCrunch, this could prove to be a costly blow for companies like Tesla, which has previously flourished in the battery storage marketplace.
The legislation includes a wide variety of tax provisions, spending measures, and policy changes. While H.R.1 has been billed as an attempt to promote economic growth and tax relief for individuals and businesses, it also came with the early termination of those money-saving tax credits.
Before the bill was signed, TechCrunch speculated on how impactful it would be to the battery storage landscape. "While battery storage installations might continue to receive tax credits under the bill, new restrictions over parts or materials sourced from foreign entities of concern could make any remaining tax credits nearly impossible to claim," TechCrunch noted.
Why is the passing of H.R.1 important for Tesla?
The first half of 2025 has proved to be a difficult time for Tesla. Following a string of controversies surrounding CEO Elon Musk, the company has seen a concerning decrease in car sales around the globe. However, Tesla's energy storage business has been able to achieve record-setting numbers in the past year, becoming the company's bright spot.
In 2024, Tesla deployed 31.4 gigawatt-hours of energy storage products, more than doubling the 14.7 GWh in 2023. This includes both Megapack and Powerwall systems. Because of this, Tesla saw a 113% increase in year-over-year revenue last year compared to 2023.
As noted by UtilityDrive, the continued success of Tesla's battery storage business provided a sense of optimism in the company.
"It is something that enables far greater energy output to the grid than is currently possible," Musk said during a conference call. "This will drive the demand of stationary battery packs, and especially the grid-scale ones, to insane [levels], basically as much demand as we could possibly make."
This windfall may soon be coming to an end, though. As energy tax credits dry up, some budget-conscious customers may balk at the upfront costs associated with Tesla's battery storage systems.
What's being done about the removal of the ITC?
Months ahead of the early termination of the ITC, Tesla appeared to be aware of the possibility in a U.S. Securities and Exchange Commission filing. While discussing rebates, tax credits, and incentives available in the solar and energy storage industries, Tesla noted the impact that the money-saving measures had on enticing potential customers and investors.
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Yes 💯 "However, these incentives may expire when the allocated funding is exhausted, reduced, or terminated as renewable energy adoption rates increase," Tesla wrote. "Likewise, in jurisdictions where net metering is currently available, our customers receive bill credits from utilities for energy that their solar energy systems generate and export to the grid in excess of the electric load they use."
For any home solar panel owner who may soon be priced out of purchasing battery storage, you may be able to take advantage of net metering to help lower the cost of your electric bill. Net metering allows homeowners the opportunity to receive credit on their electricity bills for the excess energy their solar panels send back to the grid.
This system essentially allows you to use your solar panels to offset your electricity usage, potentially lowering or even eliminating your monthly bill altogether.
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