If you’ve been considering solar, there’s never been a better time to take the leap.
New federal legislation — the “One Big Beautiful Bill” (OBBB) — and a recent executive order have made some important changes to how solar incentives work in the U.S. While these updates shift the landscape, they also create a clear window of opportunity for homeowners ready to take control of their energy costs and future-proof their homes.
In this article, we’ll break down what’s changing, what it means for you, and why now is a smart time to go solar.
In this article:
- What’s changing and why it matters
- The 25D Residential Tax Credit is phasing out, but there’s still time
- Third-party owned solar (TPO) remains eligible — with some new rules
- Why going solar now makes sense
- Take the next step
What’s changing and why it matters
In July 2025, Congress passed the OBBB, a sweeping budget bill that includes updates to solar incentives. Shortly after, a presidential executive order added new guidance around implementation. While there’s a lot of complex language in the bill, here are the two main federal tax credits that affect solar customers:
- 25D: This is the residential credit for homeowners who purchase solar. It allows you to claim 30% of your solar (and battery!) system cost off your taxes.
- 48E: This is the commercial credit that applies to third-party owned (TPO) systems like leases and power purchase agreements (PPAs). These are generally the ways that homeowners go solar with little or no money out of pocket.
These programs have helped millions of homeowners save thousands of dollars while adopting clean energy. Now, with changes on the horizon, there’s a clear reason to act, and a timeline to follow.
The 25D Residential Tax Credit is phasing out, but there’s still time
If you’re planning to buy your solar system with cash or a loan, the 25D tax credit currently allows you to deduct 30% of the total cost from your federal taxes. As part of the OBBB, this credit will go away at the end of 2025. Put another way, if your system is paid for by December 31, 2025 you should still qualify.
Why it matters: For a typical home solar project, this credit can mean $6,000–$9,000 in savings. By moving forward by the end of the year, you can lock in this benefit before it expires, while also gaining long-term protection against rising energy prices.
Third-party owned solar (TPO) remains eligible — with some new rules
If you’re interested in going solar with no upfront installation costs, options like solar leases and PPAs (power purchase agreements) are still available and attractive. TPO systems continue to qualify under the 48E commercial tax credit. This matters because the third-party that owns the system on your roof depends on this credit to make the lease or PPA terms more affordable.
To be eligible, projects must:
- Start construction within one year of the bill’s passage (by mid-2026)
- Be placed in service by the end of 2027
- Starting in 2026, new rules will phase in that require solar components to meet U.S. supply chain standards, known as “FEOC” thresholds.
Bottom line: TPO remains a good option for homeowners who prefer lower initial investment, and may become even more popular with the changes in the OBBB.
Key dates to know
- December 31, 2025: Last day to pay for a purchased solar system to qualify for the 30% 25D credit
- August 18, 2025: Announcement deadline for new executive order guidance affecting supply chain compliance
- July 2026: Deadline to start construction on TPO systems under 48E
- December 31, 2027: Final deadline for TPO systems to be completed under current rules
Why going solar now makes sense
1. Maximize savings before incentives expire
The 30% federal tax credit for homeowner-owned systems is still in place, but only through the end of 2025. Starting your project soon ensures you won’t miss out on thousands in savings.
2. Protect yourself from rising energy costs
Thanks in part to the changes made in the OBBB, energy prices are projected to rise sharply over the next decade. By generating your own electricity, you reduce your dependence on utility companies and get lower, more predictable monthly bills — especially if you add battery storage.
3. Explore flexible options Like TPO
If buying your system isn’t the right fit, third-party ownership options like leases and power-purchase agreements let you go solar with no upfront installation costs, while still getting the benefits. These options are still available under the current federal programs for several more years.
4. Add value to your home
Many studies have shown that solar can increase the resale value of your home. As utility costs rise, homes with solar may be even more appealing to future buyers.
5. Get ahead of the rush
With the deadline for 25D approaching, many homeowners will be looking to go solar before the end of 2025. Getting started now helps ensure you secure an installer, avoid delays, and finish in time.
Take the next step
Whether you’re ready to move forward or just gathering information, we’re here to help. Our network of experienced installers can help you:
- Understand your local incentives
- Compare ownership vs. lease options
- Design a system tailored to your needs and timeline
If you’re considering solar and want to feel confident in your installation, you can connect with multiple vetted, experienced installers through Aurora Solar. It’s a simple way to explore your options, view upfront estimates on pricing and bill savings, and compare providers — all in one place.
