News > What tax credit repeal means for going solar

What tax credit repeal means for going solar

• Solar affordability

July 14, 2025

• Ben Delman

In early July 2025, Congress voted to repeal the 30% federal tax credit for homeowners who install solar on their homes. The repeal takes effect January 1, 2026.

You might be asking yourself:

• Should I go solar before 2026 to benefit from the 30% tax credit?
• Does the repeal of the 30% tax credit affect me if I’ve already gone solar?
• Should I pay for my solar system in advance?

Here’s what you need to know if you’re thinking about, or in the process of, going solar:

If you don’t yet have solar

The 30% residential credit (called “25D” based on its location in the tax code) will not be available after 2025 for solar panels or battery storage. If you are planning to pay cash or finance your solar and/or storage system through a loan, we highly recommend you go solar in 2025 to benefit from the credit.

The safest way to ensure your installation will qualify for the tax credit is to have it “placed in service” before the end of 2025. “Placed in service” is a gray area. A cautious interpretation would be that your system is “placed in service” when your system is ready to be connected to the electric grid. (Note: SUN is not a tax advisor. You should consult a tax advisor to determine the extent to which your installation is eligible.) Additional guidance about this from the IRS may not be available for several months.

Be cautious with paying a solar installer in full in advance of all work being completed. SUN does not recommend doing this. It is best practice with any home improvement contract to reserve some payment until all work is completed to your satisfaction. 

If you have installed solar and are looking to roll over the tax credit to future years

Previously, homeowners who couldn’t use the entire tax credit in the first year could roll over the unused credit to a subsequent tax year. With the loss of the tax credit after 2025, and without additional IRS guidance, we encourage you to assume you may not be able to carry over the remaining solar tax credit into subsequent tax years.

If you are looking to purchase an electric vehicle or energy efficiency devices

The $7,500 credit for new electric vehicles and up to $4,000 for used electric vehicles ends after September 30, 2025. The energy efficiency tax credits will only be available for projects placed in service by the end of 2025.

Share your solar story with Congress

If you’re worried about what the pending repeal of solar tax credits means for your ability to go solar, speak up! If your Congress members voted to maintain the tax credits, thank them. If they voted to repeal, tell them how their vote is making it harder for you and your family to save money by going solar. It’s easy, we’ve drafted some general points to get you started.