ARE SOLAR TAX CREDITS ENDING IN 2026?

With President Trump back in the White House and Republicans holding majorities in both the House and Senate, many homeowners, businesses, non-profits, and solar industry professionals are wondering: what does this mean for the 30% federal solar tax credit?

As of April 2025, the federal solar tax credit is still in effect. Eligible homeowners, businesses, Tribal Nations, and non-profits can continue to claim this valuable incentive for installing solar energy systems and battery storage solutions.

During his 2024 campaign, President Trump and many Republican leaders voiced opposition to the Inflation Reduction Act (IRA), which is a key piece of legislation from the Biden administration. The IRA extends the solar tax credit through 2034, among other clean energy provisions.

Upon taking office, President Trump signed an executive order to halt IRA-related spending. While this order was vague, unenforceable, and quickly rescinded, it sparked concerns about the future of the IRA—and the solar tax credit.

It’s important to note that the President cannot unilaterally cancel an existing law. However, with Republicans in control of Congress, legislative changes to the IRA are possible.

Contact Freedom Solar Electric for a no-cost, no-obligation custom proposal outlining the benefits for your property.

What Is the 30% Federal

Solar Tax Credit?

Officially known as the Investment Tax Credit (ITC), this federal incentive allows homeowners, businesses, Tribal Nations, and non-profits to claim a 30% tax credit on the total eligible cost of a solar installation. In some cases, you could qualify for bonus credits that could increase your credit to up to 50% of the project’s cost.

For example, if your solar project costs $1,000,000, you could receive a $300,000 tax credit in the year the system is placed in service—potentially up to $500,000 with available bonus incentives.

This credit has deep roots in U.S. energy policy:

Introduced in 1978 during the oil crisis
Reinstated in 2005 and expanded multiple times
Known in the industry as the Investment Tax Credit (ITC)

The IRA Act

The IRA of 2022 extended the 30% rate through 2032, with a step-down beginning in 2033, where it will decrease by 4% annually until it phases out completely after 2034. Despite political shifts, economic downturns, and global crises, the solar tax credit has proven resilient. Notably, President Trump himself extended the credit during his first term in office.

Is the IRA at risk? Yes. With the Republican-led government looking to fund an extension of the Tax Cuts and Jobs Act (TCJA), the IRA is expected to undergo some scrutiny. While it’s unclear what exact changes will occur.

Early Phase-Out of the Solar Tax Credit

The 30% credit rate could begin to decline before 2033—possibly as early as 2026—with a 4% annual step-down.

Do Republicans have the votes to phase out the IRA? Possibly. To ensure your property benefits from the IRA, it’s best to build your solar system before the end of 2025.

Domestic Content Requirements

Eligibility for the credit may be tied to using U.S. made equipment. While this could boost American manufacturing, it would be complex to implement, especially for residential projects, and could cause significant disruption if introduced too soon without a proper transition period.

Full Repeal of the IRA

In the most drastic scenario, the GOP could repeal the IRA by the end of 2025, eliminating the solar tax credit and other clean energy incentives as early as 2026.

This would be the ideal situation for the administration. Act now before you miss out on this opportunity to improve your property, save on energy costs, and gain more independence from the utility.

Will Projects Completed in 2025 Still Qualify?

Retroactively rescinding a federal tax credit would have serious political and economic consequences, including:

Legal challenges and public backlash
Undermining investor confidence in long-term policy stability
Impacting hundreds of billions of dollars in clean energy investments and jobs

As of April 2025, the tax equity market is still active, with investors confidently purchasing tax credits for 2025 projects—further evidence that these credits will remain in place.

The Risks of Waiting for Certainty

It’s understandable to want to wait for clearer policy direction, but delaying your solar project could be risky. Here’s why:

Legislative changes may come through budget reconciliation (likely in Q2 2025) or year-end negotiations in December.
Commercial solar installations can take 6 to 8 months or more to complete after contract signing—sometimes longer in high-demand areas.
A last-minute rush could overwhelm installers, leading to delays and possibly causing your project to miss out on the full 30% tax credit.

Waiting too long could mean missing out on the full benefit of the solar tax credit.

Is 2025 Still a Good Year to Go Solar?

Absolutely—now is one of the best times to go solar. Here’s why:

Materials are still available at pre-tariff prices
The 30% federal tax credit is still in full effect
Utility rates continue to rise—and they’re unlikely to slow down anytime soon
Interest rates remain high, but solar loans are refinanceable, meaning you can lower your rate later
Delaying could result in higher costs or ineligibility if the credit changes

Ready to Take the Next Step?

Let Freedom Solar Electric Energy Consultants guide you through the process of going solar with confidence. Our team of experts will:

Design a custom solar solution tailored to your non-profit, Tribal Nation, residence, or business
Work with EnFin to ensure your system is built to last
Help you maximize your federal incentives while they’re available

Don’t wait for policy changes—secure your energy future with Freedom Solar Electric today.