July 21, 2025
Federal legislation in 2025 has brought big changes to the solar industry, with new tariffs, regulatory concerns, and threats to incentive funding. Now that H.R.1, the “One Big Beautiful Bill” has passed, we have better clarity on what to expect in the next few years.
Commercial solar fared better in the final version of the bill, compared to initial drafts. The 30% Investment Tax Credit is to remain, but with a shortened timeline. The new requirement is that projects begin construction before July 4, 2026, or be completed before December 31, 2027. Now we have clarity, but a shortened runway for this lucrative Federal incentive.
There were no changes to the eligibility of non-profits to receive the direct-pay incentive. This is a surprise positive, as much of the solar and financing industries had expected incentives for non-profits to be among the first cuts.
Residential solar did not fare as well in the final version of the bill – homeowner direct purchase of solar will only have until the end of 2025 to be eligible for the 30% ITC.
The shorter deadline on the ITC will have several effects for solar customers. Due to the rush to complete projects before the deadline, there will be very high demand for solar equipment for the next 2 years. With increased demand, the industry is anticipating a shortage of solar equipment coming in 2026. Prices will also rise. Domestic manufacturers are already having difficulty keeping up with orders. Limited supply and tariffs on materials are going to drive up prices significantly, once the current wave of solar inventory is used. One further factor is the new “Foreign Entity of Concern” (FEOC) requirement, which will further limit available sources of materials,
Because of the expectation of rising prices and potential for shortages, US SolarWorks is scheduling our construction calendar through 2026. We are placing equipment orders now to lock in the current price levels for our customers, and ensure our projects will be completed to meet the new Federal ITC requirements.
Clients who want to install solar at their facilities should get started with applications for Utility and State programs now. Applications for Utility connection, and State incentives need to be filed prior to install. Locking in Utility approvals helps to establish “Commence Construction” requirements for the new Federal incentive deadlines
The important message is that all of the incentives for solar are still available. Commercial customers who are considering solar are still able to meet the deadline requirements. Getting started on a solar project now will allow US SolarWorks to lock in equipment orders for you before prices go up.. Time is limited, but completing a solar installation with all of the best rebates and incentives is achievable.
