How Trump’s New Bill Impacts the 30% Federal Solar Tax Credit: What Homeowners and Businesses Need to Know

In July 2025, President Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBBA), which rapidly alters the landscape for solar incentives in the U.S. While the 30% Federal Solar Investment Tax Credit (ITC) remains intact through 2025, OBBBA enforces hard cutoffs for certain programs and adds new sourcing restrictions. This guide gives you the complete, verified breakdown with actionable steps and citations.

1. What OBBBA Changes

• Residential Solar & Battery Credit (Section 25D)
  The 30% credit remains for installations placed in service by December 31, 2025. Expenditures made after that date are not eligible for the credit. This is confirmed by the Department of Energy and tax advisory analysis.

• Commercial & Utility-Scale Credits (Sections 45Y & 48E)
  These credits are now phased out:

  • Must begin construction by July 4, 2026.

  • Must be placed in service by December 31, 2027 to qualify.

• FEOC (Foreign Entities of Concern) Restrictions
  Starting mid-2026, projects using components or financing from restricted foreign entities, including certain Chinese firms, may become ineligible for credits or subject to penalties.

2. What the 2025 ITC Rules Mean for Homeowners

Solar + Batteries

• You can still claim 30% on solar and battery systems if they are installed and placed in service in 2025. Example: a $25,000 system automatically locks in a $7,500 credit.

Tight Project Timelines

• Typical installations take months, from design and permits to meter hookup. Starting now is essential to meet year-end deadlines.

Home Value Increase

• Studies show homes with owned solar systems have 4–5% higher resale values. → [Zillow; state variation exists]

State & Utility Incentive Dependencies

• Many local incentives reduce or expire once federal credits vanish. Check your state/utility programs now.

3. Market & Industry Impact

• Commercial Installations Impacted
  After 2027, new utility-scale installations lose ITC benefits unless started by July 4, 2026.

• Job & Manufacturing Risk
  Analysts forecast reduced solar growth and up to 1.6 million clean energy jobs at risk by 2035 if incentive-backed demand wanes.

• Grid Stability Concern
  With fewer battery projects, grid resilience may suffer during peaks or outages.

4. What You Should Do Now (2025 Action Plan)

1. Schedule Installations Immediately
   Secure your spot and ensure completion by December 31.

2. Bundle Solar + Battery
   Install both together to maximize the 30% 2025 ITC.

3. Consider Leases or PPAs (if cash-limited)
   Ownership gets you the 25D credit, but third-party ownership structures can still qualify under 48E—so long as construction and service deadlines are met.

4. Verify Supply Chain Compliance (FEOC)
   Ask your installer if their components comply with FEOC rules especially for imported equipment.

5. Work with Tax Professionals
   Claiming credits correctly matters. Form 5695 for residential; deduct business credits accordingly.

Key Dates At a Glance

For expert help or a free quote, contact ARMA Solar today and secure your place on our 2025 installation schedule.