New Federal Law Sunsets 30% Residential Solar Tax Credit in 2025
Updated: 7.11.2025
Have you heard the residential solar tax credit 2025 news? On July 4, 2025, President Donald Trump signed a tax act that eliminated the 30% residential solar tax credit—also known as the Federal Investment Tax Credit (ITC). Under the new law, a solar PV system must be installed and operating by December 31, 2025 to be eligible for the credit. This affects both solar panel systems and home battery storage.
If you’ve considered solar energy for your home, 2025 is the time to move forward. Acting now allows you to maximize your solar incentive savings and secure thousands of dollars in reduced system costs before it is too late. With in-house experts in permitting, interconnection, and incentives, StraightUp Solar is here to guide your project with professionalism every step of the way.
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Residential Solar Tax Credit 2025 Update
What Changes for Homeowners?
Under the new tax law, the Residential Solar Tax Credit will officially end on December 31, 2025. To qualify, your solar PV system must be installed and operational by this deadline. For homeowners, this change means one of the most impactful incentives for going solar—the 30% Federal Investment Tax Credit (ITC)—is going away. The ITC currently provides a dollar-for-dollar reduction on your federal tax liability equal to 30% of your total system cost, with the option to carry forward any unused credit to future tax years.
While solar will continue to deliver long-term benefits—like lower electric bills, protection from rising utility rates, and energy independence—the opportunity to claim this substantial incentive for maximum savings ends after 2025.
What Changes for Businesses?
For businesses, schools, and nonprofit organizations, the solar tax credit remains in effect for solar projects, but with different sunset dates.
- If the project starts construction by July 4, 2026, the business can complete the project by 2030 and receive the 30% tax credit.
- If the project begins construction after July 4, 2026 it must be installed and placed in service by December 31, 2027 to receive the credit.
It also includes deadlines and restrictions regarding where equipment is sourced.
- For projects starting construction in 2025, the business can use equipment from any country to receive the credit.
- For projects commencing in 2026, the solar equipment can not be from China and other selected countries.
Your StraightUp Solar Project Developer can explain how the new tax law impacts your projects. Start a quote for your business or organization today!
Disclaimer: We are not tax professionals, we are solar experts. Please consult with your tax advisor to see how the Federal Tax Credit can work best for you.
Solar Powers American Energy Independence
For generations, energy independence has been a core American ideal—and in our current moment, homeowners have more power than ever to take control of how they produce and use energy. Installing solar panels allows you to generate your own electricity, reduce your reliance on the utility grid, and protect yourself from unpredictable rate hikes.
Utility Costs Continue to Rise Across Illinois & Missouri
- Ameren Illinois announced a summer 18-22% total bill increase for homeowners beginning on June 1, 2025 (customers will begin seeing it on their bills in July) and running through September 30, 2025.
- ComEd residential customers in Illinois will see on average a $10.50/month bill increase, effective June 1, 2025.
- Ameren Missouri received approval for a 15% rate increase, with more on the horizon after a new Missouri law enables them to charge customers for Construction Work in Progress (CWIP) to cover their expenses for building new power plants, prior to project completion.
Source: Brattle Economic Analysis of Clean Energy Tax Credits
Solar Locks in Utility Rates for Long-Term Energy Security
As rates climb, solar offers a powerful solution: it allows you to lock in your energy costs and avoid future increases. With a solar energy system, you produce electricity at a predictable cost, offering long-term peace of mind and financial stability.
Solar + Battery
Pairing your solar installation with battery storage can provide even greater energy resilience. You’ll have backup power during outages and the ability to use more of your own energy on your own terms.
Choosing solar is more than a smart financial decision—it’s a step toward greater energy independence, energy security, and local resilience for American families.
5 Smart Reasons to Choose Solar in 2025
- Secure the full 30% residential solar tax credit before proposed policy changes take effect.
- Stay ahead of current and future utility rate increases in both Missouri and Illinois.
- Reserve your place on StraightUp Solar’s 2025 solar installation queue before end-of-year deadlines and demand spikes.
- Produce your own electricity while lowering your energy bills and adding long-term value to your home.
- Contribute to a cleaner energy future by reducing reliance on fossil fuels—one rooftop at a time.
Time is critical. The new law makes any delay costly. Your solar PV system would need to be installed and in service before the end of the year. A signed contract now helps ensure you still qualify for federal incentives.
Why Choose StraightUp Solar?
Since 2006, we’ve brought more than 3,000 solar installations to light for homeowners and businesses across Missouri and Illinois.
When you work with us, you get:
- A certified B Corp that prioritizes people and planet daily
- A team that lives and works in your community
- Unparalleled expertise for permitting, interconnection, and incentives
- Top-tier solar equipment and warranties
- Battery storage options to maximize energy security
- More than half of our team is NABCEP-certified
- Peace of mind that our full-time Service Team has your back
Take Control of Your Energy Future Today!
Don’t wait for incentives to disappear. The sooner you get installed, the greater your chances to secure your 30% residential tax credit in 2025 and start your solar journey with confidence. Our expert team at StraightUp Solar will walk you through every step—from quote to install and beyond—for maximum savings and to lock in long-term energy stability.
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