It's important to stay up to date of how changes to possible solar tax credits may impact your ability to obtain solar power for your home or business, and one major change has recently taken place. Via president Donald Trump's One Big Beautiful Bill being signed into law in July 2025, the 30% federal solar tax credit that has been offered to residents around the nation will be ending on December 31, 2025.
At Intermountain Wind & Solar, we're here to offer the very best residential solar power services and help with all related financial areas to clients around Utah and Idaho, including residential solar incentives like the federal tax credit. So, what is happening to the solar tax credit in 2025, and what does the 30% federal solar tax credit ending mean for potential solar customers around Utah? Here's a deep dive into this important and timely topic.
As we noted above, the signing of the One Big Beautiful Bill in summer of 2025 includes a provision that the 30% federal solar tax credit is ending at the end of this calendar year, on December 31st. But what does this actually mean, and how will it affect your cost and savings on solar for your home?
First, let's take a closer look at the federal solar tax credit itself. This incentive was first implemented in 2006 as part of the Energy Policy Act and has been extended multiple times since then. The credit allowed homeowners to deduct various percentages of their solar system costs from their federal income taxes.
The incentive has been a major part of the rise of solar power in the United States, making it more affordable for homeowners to invest in renewable energy. It has allowed numerous families to not only save money on their energy bills, but also make a positive impact on the environment.
In recent years, there have been discussions and proposals for changes to the federal solar tax credit. Some argue that it should be extended indefinitely to continue promoting the use of renewable energy sources. Others believe it should be phased out gradually as the cost of solar technology decreases and becomes more accessible without government incentives.
The current percentage is 30%, which was initially scheduled to decrease somewhat before ending in the mid-2030s. However, president Trump's bill sped up this process, and the credit will expire entirely at the end of 2025. What will this mean for Utah homeowners, businesses and the local economy? Our next few sections will dive in.
For homeowners who may be considering installing solar panels on their property, the end of the 30% federal tax credit may change their decision-making process. With less financial incentive from the government, homeowners may be more hesitant to invest in a solar energy system after December 31, 2025.
In other cases, however, this may lead to a bit more urgency. Homeowners who are able to install their system before the end of 2025 will still qualify for the full 30% credit, and there is no retroactive component. This means that those who have already installed solar panels will not see a decrease in their tax credit. To be clear, homeowners must have their solar (or battery) systems fully installed and operational by the end of 2025 to claim the 30% credit. Simply paying for it or signing a contract isn’t sufficient.
So if you've been on the fence about going solar, now is the time to act. With the current federal tax credit still in place and the end of the home solar tax credit on the horizon, there is no better time to invest in renewable energy for your home.
Homeowners who act before the end of 2025 can still take advantage of the 30% federal solar tax credit, which allows them to deduct nearly a third of the cost of a purchased solar system from their federal taxes. For example, on a $25,000 system, this credit could save a homeowner $7,500, a substantial reduction in upfront costs that shortens the payback period and improves the overall return on investment. In many cases, claiming the credit can cut one to three years off the time it takes for the system to pay for itself, depending on energy costs and system size. With the credit set to expire after 2025, locking in a solar installation now is the only way to secure these savings and maximize the financial benefits of going solar.
Because the tax credit being removed is residential in nature, businesses will not face the same consequences as homeowners. However, this does not mean that businesses are completely unaffected by the end of the federal solar tax credit. The 30% federal Investment Tax Credit (ITC) for commercial solar projects, governed under Section 48E, remains available, but businesses now face much faster timelines under the new “One Big Beautiful Bill”. To qualify for the credit, companies must begin construction on their solar project by July 4, 2026, or ensure the system is fully operational (placed in service) by December 31, 2027.
At Intermountain Wind & Solar, we're proud to offer free consultations and quotes on solar systems, plus information on how these changes may impact your project. Contact us to begin working with a trusted Utah-based provider who is ready to help you take advantage of solar incentives before they disappear!
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