Budget Cuts Threaten Residential Solar: What Homeowners Must Know

A Critical Threat to Solar Progress

The 2025 federal budget bill—dubbed the “One Big Beautiful Bill Act”—proposes to roll back key clean energy provisions, most notably the 30% Residential Clean Energy Credit (Section 25D). This credit has been essential in helping U.S. homeowners afford solar installations.

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What’s Changing?

1. Early End to the 30% Residential Credit
The credit is set to expire at the end of 2025—nearly a decade earlier than the 2034 phase-out planned under the Inflation Reduction Act.

2. Elimination of Lease/PPA System Incentives
30% Investment Tax Credits for third-party-owned solar systems (leases/PPAs) would be removed, cutting off access for many middle- and working-class households.

3. Tax Credit Transferability
The bill would restrict the transferability of tax credits, making it harder for small solar developers to secure funding.

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Implications

1. More Expensive System Costs: The elimination of ITC will lead to more expensive manufacturing and financing costs across the board
2. Reduced Third Part Ownership (TPO): Lease/PPA systems will less likely to be offered widely
3. Reduced Adoption: Without incentives, fewer homeowners will go solar.
4. Job Losses: The Solar Energy Industries Association estimates up to 300,000 jobs are at risk.
5. Lost Investment: Clean energy investment could drop by $220 billion by 2030.
6. Higher Energy Bills: Households will be more exposed to utility rate hikes due to less threat from the solar industry.

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What You Can Do

1. Act Now: Install solar before December 31, 2025 to claim the full 30% credit.
2. Get Quotes Early: Work with experienced installers to ensure timely completion.
3. Stay Informed: Follow legislation and advocate for pro-solar policies.

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Final Thoughts

The 2025 budget bill could undo years of progress in residential solar adoption, job creation, and climate leadership. Homeowners still have time to benefit—but the window is closing.