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Solar Tax Credits Are Ending Soon — Here’s What Homeowners Need To Know
The federal solar tax credit is set to end sooner than many homeowners expected. Originally scheduled to phase out gradually after 2032, the full 30% credit will now disappear at the end of 2025. This change affects more than just solar panels. It also impacts energy-efficient home upgrades like EV chargers, heat pumps, and solar water heaters.
If you’re considering making any of these home improvements, it’s critical to act now. You’ll need to have your system fully paid for and installed by December 31, 2025 to receive the full credit.
What Is the Solar Tax Credit?
The solar tax credit, also known as the Residential Clean Energy Credit, allows homeowners to deduct up to 30% of the cost of eligible energy-efficient improvements from their federal taxes. This includes:
- Solar panel systems
- Home batteries (paired or standalone)
- Heat pumps
- EV chargers
- Solar water heaters
The credit was originally extended through 2032 under the Inflation Reduction Act, but the current legislation has changed that timeline.
New Deadline: December 31, 2025
The federal solar tax credit is now ending on December 31, 2025. This means:
- If your project is fully paid for and installed before the deadline, you can claim the full 30% credit.
- If you wait until 2026, you won’t receive any federal credit.
This change was confirmed by industry authorities like EnergySage and recent government statements.
Find the Right Contractor for Your Solar Project
Whether you’re ready to begin your project now or need some expert advice, our network of contractors are here to help. With a few simple questions, we’ll find the best local professionals for you
What Homeowners Should Do Now
If you’ve been thinking about going solar, upgrading your HVAC system, or adding an EV charger, you still have time, but not much. Here’s how to stay on track:
- Start Now: Give yourself enough time to plan, get quotes, and schedule installation.
- Confirm Deadlines: Double-check with your installer that your project will be completed and paid for before the end of 2025.
- Look Into Bundled Incentives: Some utility and state programs may offer stackable rebates, but those could also expire or change when the federal credit ends.
- Act Before Demand Spikes: As more homeowners rush to meet the deadline, availability of installers and products may become limited.
- Plan for Installation Time: Some solar, HVAC, or battery projects can take weeks, or even months, from contract to completion.
Frequently Asked Questions
What happens if I wait until 2026?
You’ll receive no federal solar tax credit. While many sources previously suggested a drop to 22%, current guidance (including from EnergySage) confirms the credit will fall to 0% starting in 2026.
Does this only affect solar panels?
No, this early phase-out affects a wide range of home energy upgrades, including:
- Electric vehicle (EV) chargers
- Heat pump HVAC systems
- Solar water heaters
- Solar batteries
Can I claim the credit if my system isn’t installed until 2026?
No. To claim the 30% credit, your system must be both paid for and fully installed by December 31, 2025. Any unfinished projects will not qualify.
Will states still offer incentives?
Some states may continue to offer separate solar or efficiency rebates. These vary widely and may change depending on how federal support evolves.
Find the Right Contractor for Your Solar Project
Whether you’re ready to begin your project now or need some expert advice, our network of contractors are here to help. With a few simple questions, we’ll find the best local professionals for you
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