Meet Bob. Bob is a hard-working W-2 employee who made a hundred thousand dollars last year working for XYZ Corporation. Like most people, Bob sets aside money from each paycheck to pay his taxes. This money is commonly referred to as paycheck withholdings that goes into a bucket to pay the IRS. What Bob doesn’t realize is that incentives like the Solar Tax Credit can reduce how much of that money ultimately stays with the government, allowing him to keep more of his hard-earned income.

Come tax time, when tax season rolls around, Bob submits his paperwork to the IRS and they determine how much money he owes in taxes. If his withholding bucket has more money than he owes, Bob would get a refund. But if his bucket isn’t full enough, he would owe more money to the IRS.

This year, Bob decided to go solar, which means he now has a second bucket to pay the IRS with. This bucket is called the solar tax credit, and it’s equal to 30 percent of the price of his solar system, regardless of whether he paid cash or financed the system.

Come tax season, he now has two buckets to pay the IRS with: his withholding bucket and his solar tax credit bucket.

Solar Credits Applied First

The IRS will first pull money from Bob’s solar tax credit bucket until the bucket empties, leaving his withholding bucket full of all the money he withheld throughout the year. If the IRS needs additional funds beyond the solar tax credit bucket, they will take them from Bob’s withholding bucket and give him the rest back as a refund. Bob now has a choice: he can put his refund into savings, pay it into his solar financing, or spend it any way he likes. Bob feels thrilled with his decision to go solar, and he feels happy to have a second bucket to pay his taxes with. Our representatives do not hold licenses as tax professionals, and this does not serve as legal tax advice. We recommend that you contact your CPA to best understand your individual tax situation.

Understanding the Solar Panel Tax Credit

I want to talk about the solar panel tax credit. The federal tax credit. Now there’s some states in the US that have their own state tax credits, I’m not going to go over that today. I’m just going to talk about the federal side of it.

And also I’m only going to be talking about the residential solar tax credit because there’s some different credits for businesses and commercial use.

All right so in this article we’re going to talk about what the solar panel tax credit is, how to calculate it, things to look out for, and overall high level information for you. Hopefully you’ll find it useful.

What Is the Solar Panel Tax Credit?

So what is it? It’s a tax credit that the IRS has created or Congress has created to incentivize people to lean more towards renewable solar energy.

And there are debates between EVs and gas vehicles but with solar energy there is legitimacy because you’re just taking energy from the sun, you’re using it to power your house, it’s renewable and so the IRS wants to incentivize taxpayers to possibly install solar panels on their roof to cut down on energy usage.

Why the IRS Incentivizes Solar

Solar panel installation helps offset coal burning, nuclear energy, and other sources of electricity. Since tax credits are a reduction of tax liability the IRS sees it as an incentive to offset the costs of solar panels. Because solar panels can be expensive the IRS incentivizes taxpayers with this solar-energy tax credit.

Solar Energy Tax Credit vs Tax Deduction

Which leads me to my next point which is the differences between a tax credit and a tax deduction. As a lay person I’m sure you hear those two terms get thrown around a lot. Tax deductions are generally more common, there are more available deductions than there are credits and that’s a fact. But what are the differences?

Understanding Tax Deductions

A tax deduction is a way for you to reduce your taxable income. These include itemized deductions, so when you donate to charity, when you deduct your mortgage interest or property tax, these are tax deductions. They reduce your taxable income. After your taxable income is reduced then you calculate the tax on your lowered taxable income.

As an example let’s say you had a $10,000 tax deduction from your mortgage interest deduction, that reduces your net income by $10,000. If you’re in the 20% marginal tax bracket that means your net tax benefit federally is $10,000 times 20%, so $2,000. The $10,000 deduction gets you a $2,000 tax benefit.

Understanding Tax Credits

Where the credit beats the deduction is the credit doesn’t reduce your taxable income, it reduces your tax liability. If your tax liability is $10,000 a tax credit reduces it directly. A $10,000 tax credit brings your tax liability to zero so you owe nothing. Dollar for dollar, tax credits are much more beneficial than tax deductions.

Applying This to Solar

Knowing that, let’s get into how to calculate the solar tax credit and the things we need to look out for.

How to Calculate the Solar Panel Tax Credit

Solar tax credits are incentives for when you install solar PV systems. PV stands for photovoltaic and refers to solar panels installed on your roof. The costs to install those panels and related storage units are used to calculate the tax credit.

Qualifying expenses include the actual cost of solar cells, the labor and contract labor needed for Solar Panel Installation, the parts, the wiring, and even the storage unit to store solar energy. All of these are added up as your total qualifying expense. Once you get to your total qualifying expense, you multiply that number by 30%, and that is your net solar tax credit amount.

For example, if you had a $60,000 solar system all in, including Solar Panel Installation, you multiply that by 30%, and your solar tax credit is $18,000. The tax year you can take this credit is the year your solar panels are completed and running. You can take the credit even if you finance the entire system and make monthly payments—you still receive the full tax credit.

Watch Out for Misleading Claims

Common things to look out for include misleading claims from solar panel salesmen. Just like car salesmen, some solar salespeople will say whatever they need to close the deal. Many of them give “tax advice” when they should not, and some over-embellish the benefits of the solar panel credit.

The solar tax credit benefits many people but not everybody. Solar panel salespeople do not know your personal tax situation and may broadly say everyone gets a benefit, which is not true. Always check with a tax professional before buying solar panels. Some solar companies even require you to sign over the credit to them in exchange for reducing the Solar Panel Installation cost. This does happen, so be cautious.

Why the Solar Panel Credit Works for Some and Not Others

Why is the solar panel credit beneficial for some people and not others? This credit is a non-refundable credit. That means if you have no income and no tax liability, you will not receive a refund from the IRS even if you purchase solar panels.

The credit can carry forward to future years until you have taxable income and liability to offset. A non-refundable tax credit means if you have no liability and you have a large solar panel tax credit, you do not get cash from the IRS. You must have some income and tax liability.

For example, retirees living on Social Security with little taxable income will not see immediate benefit from Solar Panel Prices in 2025. They only benefit if they later have taxable income.

So, as you can see, if you’re retired or without taxable income, buying solar panels gives you the credit but no immediate benefit. The only way you benefit is if you start selling investments or take on income where you owe taxes. Then the solar panel tax credit offsets your liability. If not, you carry it forward year to year.

This makes it important to understand how Solar Panel Cost Per Watt, Solar Panel Prices in 2025, and your personal tax liability align with your financial plan.

How to Calculate and Understand the Solar Panel Tax Credit

So the qualifying expenses include the actual costs of the solar cells, the labor, and contract labor needed to install them on your roof. The parts, the wiring, and even the storage unit to store solar energy are all added up as your total qualifying expense. Once you get to your total qualifying expense, you multiply that number by 30%, and that is your net solar tax credit amount.

If you had a $60,000 solar system including Solar Panel Installation, multiply that by 30%, and your solar tax credit is $18,000. Which tax year can you take this credit in? It happens in the year that your solar panels have completed installation and are up and running. That is the tax year you can take the credit. One important point is you can take the credit even if you don’t pay any money down on it. You can finance the entire system and be making monthly payments and still take the full tax credit.

Common Things to Look Out For

There are common things to look out for, especially from solar panel salesmen. Just like car salesmen, some solar panel salesmen will say whatever they need to make sure you buy the solar panels. A lot of times they give tax advice when they should not, and they sometimes over-embellish the benefits of the credit.

The solar panel tax credit will benefit many people but not everybody. The solar people do not know your individual tax situation; they just tell you that you are going to get this tax benefit like a broad statement when that is simply not true. Watch out for solar panel salespeople over-embellishing credits and benefits. Always check with a tax professional after you talk to somebody or are interested in buying solar panels to make sure it actually benefits you.

I have heard of some solar companies requiring that you sign over the credit to them, and in return they may reduce the Solar Panel Installation cost or the total Solar Panel Prices in 2025. That sort of arrangement does happen. I am not sure how it is legal, but it occurs.

Why the Solar Panel Credit Benefits Some People and Not Others

Why is the solar panel credit beneficial for some people and not others? This credit is considered a non-refundable credit, which means if you do not have any income, and you do not owe any taxes, and you do not have any tax liability, you do not actually get a refund.

Because you have this big tax credit from buying solar panels, if you do not have any income or tax liability, that credit will carry forward to the following year. It will keep carrying forward until you have income and liability for it to offset. A non-refundable tax credit means if you do not have any tax liability, and you have a big tax credit, you do not get cash from the IRS. You need to have some income and some liability.

As you can see here, if you are retired with very minimal income, or living on Social Security, and you do not have taxable income, and you buy solar panels, you will get the tax credit but you will not see any benefit from it immediately. The only way you will see a benefit is if you start selling off some of your investments or getting a job where you have earned income and you have taxes to pay. Then you will see the benefit.

But if you are retired, or you do not have any income, you will not see any immediate benefit from Solar Panel Maintenance, Solar Panel Prices in 2025, or Solar Panel Cost Per Watt until you have taxable liability.

Solar Incentives for Real Estate Investors

If you’re a real estate investor and you’ve got a property where you’re thinking about solar, consider some of the ways that people can benefit from tax incentives around solar and other renewables that the government has been pushing.

For real estate, solar is the big one. If you have farmland or ranch land, then wind might make sense for you—especially in Texas or California where there is a lot of wind. But for most investors, solar is the easiest and best solution. Under the new bill, with certain qualifications, you can get up to a 30% tax credit.

A tax credit is different from a deduction. With a deduction, the benefit depends on what tax bracket you are in. If you are in a 40% tax bracket, you get twice the benefit compared to someone in the 20% bracket. With a credit, you get the exact same benefit whether you are in the 40%, 20%, or 10% bracket because that is money directly returned to you or taxes you do not have to pay.

For example, if you put a $100,000 solar system on your rental property through Solar Panel Installation, you receive a $30,000 credit immediately. That means your net out-of-pocket is only 70% of the system cost. On top of that, you also receive a deduction of 85% of the cost of the solar panels because it is on business property. This is a business deduction, not technically a solar deduction.

The 85% deduction works because it is 100% minus half of the credit you took. That deduction then reduces your taxable income. If you are in a 40% tax bracket, that equates to roughly 34% savings back in your pocket.

Why Solar Is Highly Beneficial for Investors

This structure makes solar highly beneficial for investors. Solar Panel Prices in 2025 continue to fluctuate, and understanding Solar Panel Cost Per Watt is key for analyzing ROI on rental properties. Beyond the credit and deduction, investors also increase long-term property value, lower operating expenses, and gain energy independence with Solar Panel Maintenance included in the financial model.

For real estate investors, these benefits make solar one of the most powerful renewable energy incentives available today.

Federal Solar Tax Credit Deadline

It’s official. The 30% federal solar tax credit will expire at the end of this year. The new deadline is now December 31st, 2025. Until then, you will still be eligible to receive that 30% federal tax credit, assuming you meet the necessary project requirements.

Starting January 1st, 2026, that credit will drop to zero. To clarify, we are referring to the 25D federal tax credit, which is that 30% incentive. It is the one most consumers will care about since it directly applies to residential solar and battery systems purchased by the homeowner, either through cash or financing.

There is another credit, the 48E, which applies to leases and PPAs, not purchase systems. We will save that discussion for another article.

Understanding the Solar Tax Credit Deadline and What It Means for Your Project

Now that we know the deadline, the bigger question is what needs to happen with your solar project before the end-of-year cutoff.

If you are new, welcome. My name is Engr. Elena Rayer, and I have been in the solar industry for 10 years. If you want to talk about Solar Panel Installation or batteries for your home before that tax credit drops to zero, book a discovery call with me. The link is below in the description. It is free, takes 15 minutes, and I can directly assist with the information you need. If you are outside my coverage area, I will let you know beforehand so I do not waste your time.

How the Deadline Changed

As far as what needs to happen with your solar project before that end-of-year deadline, there seems to be some confusion. Disclaimer: I am not a policy expert or tax expert. I am simply sharing information.

Before this recent bill, the language of eligibility stated: “The credit allowed under this section 25D shall not apply to property placed in service after December 31st, 2034.” This meant that any system placed in service after the 2034 deadline would not be eligible.

The revision we saw from the Senate changed a couple of things. First, they moved the deadline from 2034 to 2025. Second, the language shifted from “placed in service” to “expenditures made.” It now states: “The credit allowed under this section 25D shall not apply with respect to any expenditures made after December 31st, 2025.”

What Counts as an Expenditure

But what do they consider expenditures? Does it mean the system just needs to be paid for? Could you sign a contract on December 31st and write a check for the full amount? Unfortunately, that does not appear to be the case.

Shout out to Jack the Solar Guy for sharing this information. Within the 25D tax code under section 8A, expenditures are defined as installation. Section 8A states: “In general, an expenditure with respect to an item shall be treated as made when the original installation of that item is completed.”

According to the law, if you want a 30% tax credit, the system must be installed by the end of the year. Since Solar Panel Installation can take weeks or months to get approval and complete and with demand rising you need to make the decision to go solar sooner rather than later.

Important Reminders Before You Commit

The good news is, since the “placed in service” language has been replaced, the final permission to operate from the utility is no longer the requirement. This is a relief because depending on utility approval around a hard deadline could have been a disaster. Still, interpretation of the law could change, so I will pin a comment below with the most up-to-date information I hear. When in doubt, consult a tax professional.

To recap: if you are open to solar and batteries and want to take advantage of the 30% tax credit in 2025, you still have time to get your system installed before the deadline. Most solar projects take one to four months depending on many factors. Some are quicker, some are longer, but high demand could cause delays. Do not assume you have unlimited time and wait until the last moment, only to discover your Solar Panel Installation cannot be completed before December 31st, 2025. Reach out to local installers, ask for installer references, and make sure you stay ahead of the curve. Or book a discovery call with me and I may be able to help directly. If not, I can connect you with a trusted installer in your area.

Build Better Credit: How to Claim Tax Credit for Solar

To claim a tax credit for solar, you must have solar panels installed on your primary or secondary residence. The solar panels must meet certain efficiency and quality standards to qualify for the credit. The tax credit allows you to claim a percentage of the cost of purchasing and installing the solar panels. You can claim the credit on your federal income tax return by filling out the appropriate forms and providing documentation of the purchase and installation costs.

Keep Your Documentation in Order

It is essential to keep all receipts and invoices related to the solar panel purchase and Solar Panel Installation to support your claim. The percentage of the credit and the maximum amount you can claim may vary depending on the tax year. Make sure to check the latest guidelines and regulations from the IRS to ensure you meet all requirements for claiming the tax credit for solar.

Why This Matters for Solar Costs in 2025

The benefits of this incentive are especially important when considering Solar Panels Cost in 2025, Solar Panel Prices in 2025, and Solar Panel Cost Per Watt since they directly affect the return on your solar investment.

How Much You Can Claim

If you’ve made the investment in a renewable energy system, then you’re going to want to make sure that you claim your 26 percent federal government tax credit. The federal government will actually reimburse you 26 percent of your overall project cost for investing in a solar power system.

A Message from Engr. Elena Rayner

Hi everyone, for the past eight years I’ve been helping homes get set up with solar power systems so that they’re not dependent on the power company and they can protect their homes from a loss of the electric grid. One of the great things about solar power in America is that the federal government actually gives you a financial incentive to invest in a solar power system.

The Federal Rebate Explained

As of this recording, the government is offering a 26 percent rebate for your Solar Panel Installation. That means 26 percent of your overall project cost, including the materials and the labor, will be reimbursed when you file your tax return at the end of the year.

How to Claim the Solar Tax Credit Using Form 5695

Today I’m going to walk you through the form that we use to claim the rebate. It’s Form Number 5695, Residential Energy Credits, and I’m going to put a link in the description down below so that you can grab the blank form and fill it out when the time is right.

Filling Out the Top Section

Starting at the top, put your name and Social Security number. On line number one, put your total project cost, which would be your retail price of the solar contract before any rebates are applied. In this example, the contract price was twenty-five thousand dollars. Enter that amount on line one as your total project cost.

Entering Your Solar Project Costs

Assuming that solar is the only thing you’re claiming, you can skip lines two, three, and four. Enter the same figure again on line five. On line six, take the total from line five, multiply it by 26 percent or 0.26, and that will give you the figure here, which in our example is sixty-five hundred.

Lines You Can Skip

You can skip lines seven through eleven because these apply to fuel cell credits, which do not apply to residential Solar Panel Installation. Line twelve is only for those who have installed solar before and have excess credit being carried forward. If this is your first installation, leave it blank or at zero. On line thirteen, total lines twelve and six, which in our example is sixty-five hundred.

Understanding Tax Liability

Line fourteen will depend on your individual tax liability. The solar rebate works by refunding you up to 100 percent of your tax liability for the year. If your solar credit is sixty-five hundred and your tax liability is at least that amount, then you can claim the full credit in the first year. If your liability is only five thousand, you will take back five thousand in the first year and the additional fifteen hundred credit will roll over into the next year.

This is an important point to understand. Although you are entitled to a full 26 percent of your solar cost in a rebate, how quickly you receive it depends on your personal tax liability. As long as your liability is equal to or greater than the rebate amount, you can take it all back in the first year.

Final Steps on the Form

Line fifteen is simply the amount you are eligible to claim back in the first year. Of course, I am not a tax professional and this is not tax advice. This information is for educational purposes only. I will also put the link in the description down below so you can download the blank form.

What the Clean Energy Credit Means for You

If you have installed solar panels in your home, you may be eligible to receive the Clean Energy Credit. How much can you claim and how can you apply? Using solar energy for your home is good for the environment, and it is also good for your tax return.

If you have installed solar panels in your house, you could be eligible to receive a solar tax credit, officially known as the Residential Clean Energy Tax Credit. A tax credit is a dollar-for-dollar reduction in the amount of income tax that a filer owes the government. Unlike tax deductions, which reduce taxable income, tax credits directly reduce the amount of tax owed, lowering your bill or even generating a refund.

Boost from the Inflation Reduction Act

The Residential Clean Energy Credit received a boost under the Inflation Reduction Act, allowing taxpayers to recoup up to 30 percent of an investment in solar panels. Congress passed this bipartisan bill in 2022 to increase clean energy investment across the United States. One of its provisions raised the solar tax credit from 26 percent (in 2020 and 2021) to 30 percent starting in 2022. This includes both new solar panels installed at your home and investments in an off-site community solar project.

There is no maximum claim amount under the Residential Clean Energy Tax Credit. The 30 percent credit is available through 2032, after which the percentage will gradually decrease before expiring in 2035.

Requirements to Receive the 30% Solar Tax Credit

The tax credit can be claimed on your federal income tax return and reduces the cost of your Solar Panel Installation. For every dollar of the credit claimed, your federal income tax bill is reduced by the same amount. The credit is non-refundable, meaning you cannot receive more than your tax liability. However, any unused portion can be rolled over to the following year.

According to the IRS, eligible properties include:

• Houses

• Houseboats

• Mobile homes

• Cooperative apartments

• Condominiums

• Manufactured homes that meet federal construction and safety standards

To qualify, the nonprofit Solar Rating Certification Corporation or another comparable entity approved by the state where the property is installed must certify the property for performance. You do not have to make the property your main home, but you must use it solely. The credit becomes available once you pay for and install the solar panels. After installation, the full cost must be reported to the IRS for the tax year in which the work was completed. For example, solar panels installed in 2023 must be reported on your 2023 tax return filed in 2024.

Eligible Expenses for the Solar Tax Credit

The IRS includes the following as qualifying expenses for calculating the credit:

• Solar panels or solar cells

• Contractor labor costs for preparation, assembly, and installation

• Balance-of-system equipment

• Energy storage devices with a capacity of 3 kWh or greater (installed after December 31, 2022)

• Sales taxes on eligible expenses

If you received a rebate from your utility company, that amount must be subtracted from your total cost. However, rebates from your state government do not reduce the federal credit, though they may affect the amount you claim as taxable income.

Claiming Credits for Previous Years

If you installed solar panels in earlier years, you may still be able to claim the credit. However, the percentage drops to 26 percent for systems installed before 2022.

Why This Matters for Homeowners in 2025

With Solar Panels Cost in 2025, Solar Panel Prices in 2025, and Solar Panel Cost Per Watt continuing to affect homeowners’ budgets, the Clean Energy Credit provides a major financial incentive. Factoring in both Solar Panel Installation and potential Solar Panel Maintenance, this tax credit can make clean energy a more affordable and long-term investment.

What if you could power your home with the sun, cut your energy bills, and reduce your dependence on the grid? For millions of American homeowners and businesses, including myself, this vision has been a reality, thanks in large part to one powerful incentive: the 30% federal Clean Energy Tax Credit.

For years, this credit has been a cornerstone of the clean energy transition, driving investments in solar panels, battery storage, and other renewable technologies. But now, its future is uncertain. A new proposal out of the House of Representatives could slash or even eliminate this 30% credit much sooner than expected.

This isn’t just about a tax break. It’s about affordability, energy independence, and the pace of our shift to clean energy.

The Basics: What Is the 30% Clean Energy Credit?

The Residential Clean Energy Credit, currently set at 30%, allows you to deduct a significant portion of qualified clean energy purchases from your federal taxes.

This includes:

• Solar electric panels

• Solar water heaters

• Wind turbines

• Geothermal heat pumps

• Fuel cells

• And, starting in 2023, battery storage systems

This isn’t a small perk. For a typical residential solar installation costing around $20,000, the 30% tax credit translates into a $6,000 reduction in your tax bill.

Now let’s say you add a home battery system priced at $16,000. With the credit, you’d save almost $5,000, bringing your net cost for that battery down to around $11,000.

Why It Matters

These numbers matter because they make solar and battery storage far more accessible to families and businesses. Without the credit, the upfront cost of clean energy becomes significantly higher  and that could slow down adoption just as momentum is building nationwide.

What Happens Next?

If lawmakers cut this credit early, it could reshape the future of clean energy in America. We’ll be following this proposal closely, and I’ll keep you updated as details emerge.

Why This Matters for Homeowners in 2025

This incentive has been huge in driving the adoption of residential solar across the country. A lot of homeowners go solar for environmental reasons, but most importantly for financial reasons: to lower energy bills and reduce how much money the IRS keeps.

I have worked with plenty of customers in higher tax brackets where this credit was absolutely critical. It makes the upfront investment manageable, shortens the payback period, and ultimately makes solar ownership a realistic option for everyday Americans. Beyond that, it delivers tangible monthly savings, increases property value, and contributes to a cleaner future, all while providing a significant tax break.

The Role of the Investment Tax Credit for Businesses

Now let’s turn to businesses. Here, the landscape is a bit more complex. The Investment Tax Credit (ITC), also set at 30%, applies to commercial and industrial-scale projects. This credit has fueled large-scale solar farms, commercial building installations, and corporate clean energy ventures. By lowering the capital costs, it makes these projects financially viable and very attractive. In fact, federal incentives make going solar for businesses in many cases a no-brainer. They save on operating expenses, generate cleaner power, and support grid stability. From small storefronts to major corporations, the ITC has been a major driver of economic growth.

Ownership vs Leasing: Why It Matters

Now, why is this so concerning for me as a Dallas, Texas installer and strong solar ownership advocate? Because there is a key difference between ownership and leasing.

Under current rules, businesses can often claim the 30% ITC even if they lease solar systems instead of owning them outright. And thanks to the Inflation Reduction Act of 2022, tax credit transferability allows businesses with high tax liabilities to purchase credits at a discount. That made leasing arrangements attractive again, even on the residential side.

But here is the problem: if the proposed changes eliminate or weaken the 30% residential tax credit for homeowners who purchase their systems, leasing might become the only way many families could benefit from any federal incentive. Whether or not this happens will depend on if the commercial ITC, which currently accommodates leases, survives the proposed changes.

So what would this mean in real terms? Let us take that same $20,000 solar installation. Today, with the 30% residential credit, the homeowner’s net cost is $14,000 after tax savings. If the credit disappears, that same system costs the full $20,000, a $6,000 difference.

For middle-class families, that could be the deciding factor between going solar or staying tied to rising utility bills. It would lengthen the payback period, reduce the financial return, and take away much of the urgency that currently drives adoption.

The Hidden Risks of Solar Leasing

In short, the economics of going solar would fundamentally change. Ownership would become less accessible, and leasing could dominate the market again, which is not always in the homeowner’s best long-term interest.

Why Leasing Looks Attractive at First

Especially if leasing becomes the more common option, homeowners need to understand the potential downsides compared to owning. On the surface, leasing looks attractive because salespeople can pitch a low monthly payment. But here’s the reality: with a lease, you don’t own the equipment. Just like renting a house versus buying, you’re not building equity.

Long-Term Commitments and Hidden Costs

And since leases tend to be long-term contracts, what happens when that system needs to come off your roof? It’s permanently attached, and there are real questions about who pays for roof repairs or replacement at that point. With a lease, the goal is simple: you don’t own it, you just pay for the electricity it generates, often at a rate that may or may not save you money compared to your utility bill over the long run.

I’ll be honest, removing the residential tax credit is only going to open the door for more solar scams and tax fraud. If anything, we should be tightening oversight on the commercial side, not taking opportunities away from homeowners.

Lack of Control and Resale Problems

Another big drawback: lack of control. With a lease, you can’t modify or upgrade your system without the company’s approval. And what about when you sell your home? Transferring a solar lease is notoriously complicated and can even scare off potential buyers. Ask any realtor, it’s a headache.

Why Ownership Comes Out Ahead

Now, while leasing companies benefit from the tax credits and may pass some savings on, the truth is the homeowner almost always comes out better with ownership. Even if you can’t use the entire 30% tax credit in one year, you can carry forward the unused portion and claim it in future years. A good CPA can help you maximize this.

For example, let’s say a single person earning $50,000 a year pays about $4,000 in federal taxes. If they install a $20,000 solar system, the 30% credit is $6,000. That person might only be able to use $4,000 in the first year, then roll the remaining $2,000 into the next year. That way, the full benefit still applies.

Compare that to a lease, where you don’t claim the credit yourself, the company does. They might pass some benefit on, but never the full value. Over the system’s lifetime, most homeowners end up paying more for a leased system than if they had financed and purchased outright.

The Wider Economic and Policy Impact

So what about businesses? The impact could be just as bad. For commercial solar, the ITC is often the critical factor in project viability. An accelerated phase-out would make many large-scale projects unattractive to investors, slowing down solar farms and commercial installations. The ripple effects would hit manufacturing, installation jobs, and even grid reliability. And here in Texas, where we’ve got Canadian Solar in Dallas, Mission Solar in San Antonio, and Cyrus Panels in Houston, this could directly impact local jobs.

Risks to Solar Growth and Investment

Projects that once made perfect financial sense could suddenly become marginal or unfeasible. That uncertainty is a major risk for innovation and investment.

The Political Context Behind the Changes

It’s important to understand the context: these changes are part of a larger tax bill in the House that aims to make permanent many provisions of the 2017 Tax Cuts and Jobs Act, while rolling back clean energy incentives from the Inflation Reduction Act. Supporters argue it’s about fiscal responsibility. Critics argue it’s a step backward that undermines energy independence, job creation, and long-term consumer savings.

Why Your Voice Matters

As of today, these changes are still being debated. The House Ways and Means Committee has approved the bill, but it still has to clear the House and Senate. Nothing is final yet, which means your voice matters.

If you’re a homeowner who wants energy independence, if you’re a business owner or installer like me, or if you work in solar manufacturing, this affects you. The 30% tax credit has been one of the most effective tools in driving solar adoption across America. It helps families save money, strengthens our economy, and moves us toward a cleaner future. Losing it would be a major setback.

So let me ask you, do you see this as a step forward or a step backward? Drop your thoughts in the comments. And if you care about protecting this credit, reach out to your elected officials and let them know this matters to you.