⚠️ Solar Tax Credit Changes: What Homeowners Need to Know Before 2025

If you’ve been considering solar for your home, there’s one crucial detail that can’t be ignored: the Federal Solar Investment Tax Credit (ITC) is changing—and fast. In this article, we’ll break down exactly what’s happening, why it matters, and what it means for your bottom line.

🏛️ A Quick Overview of the Federal Solar Tax Credit

The Federal Solar Investment Tax Credit (ITC) has been one of the most important tools for expanding residential solar in the U.S. Originally introduced in 2005, it allows homeowners to deduct a percentage of their solar installation costs from their federal income taxes. Over the years, it has helped millions of families save thousands while making the transition to clean energy.

As of now, the tax credit sits at 30%—which means if your solar system costs $30,000, you could reduce your tax bill by $9,000. But starting January 1, 2025, that 30% credit is scheduled to decline or phase out entirely for many homeowners.

📉 What’s Changing in 2025?

Under the current policy (Inflation Reduction Act), the 30% ITC is only guaranteed for residential systems that begin construction or are installed before the end of 2024. While the commercial side of solar may still benefit from credits with bonus add-ons (for domestic content, low-income areas, etc.), most homeowners won’t qualify for those tiers.

Starting in 2025:

  • The residential ITC may be reduced or eliminated depending on federal budget decisions and inflation adjustments.

  • Homeowners may have to pay full price for solar, without the benefit of federal offsets.

  • The overall return on investment (ROI) for buying or financing a solar system could shrink significantly.

Simply put: waiting means paying more.

💸 How This Impacts the Cost of Going Solar

Here’s the math. Let’s say your solar system costs $28,000. Under today’s 30% credit, that’s $8,400 off your final bill. Without that credit in 2025, the exact same system would cost you the full $28,000—a major difference for the same energy savings.

This change doesn’t just impact cash buyers. If you’re financing your system, the absence of the credit could lead to higher loan balances, higher monthly payments, or lower approval rates depending on your lender.

And since many local utilities are adjusting rates and net metering policies, delaying your decision could mean getting hit twice—once from higher installation costs and again from reduced energy credits.

🔒 The SunWise PPA: A Strategic Advantage Amid Uncertainty

Here’s where the SunWise Power Purchase Agreement (PPA) comes in. This program was designed to offer predictable, long-term solar savings without the risk of missing tax incentives.

Instead of buying the solar system, you pay a fixed monthly rate for the solar energy it produces—at a rate that’s lower than your current utility bill. You get the benefit of clean, reliable energy, while we handle the cost of the system, installation, and paperwork, including any remaining tax-related strategy.

Even if the federal credit disappears, your rate stays locked for the next 25 years.

🏡 Why It’s Critical to Act Before the Deadline

The window for maximizing your solar savings is closing fast. The final installation deadline for systems to qualify for the 30% tax credit is December 31, 2024. Permitting, engineering, and approvals can take several weeks—so waiting until November or December may already be too late.

That’s why we’re encouraging homeowners to reserve their spot now, even if you’re still exploring your options. By starting early, you lock in access to:

  • Today’s full 30% federal credit (if purchasing)

  • The lowest possible PPA rates

  • The fastest install timelines before the end-of-year rush

🧠 What Happens If You Miss the Deadline?

If you wait until 2025 and the credit disappears, there are two likely outcomes:

  1. You’ll pay full price for a system that could’ve been deeply discounted just months earlier.

  2. You may still qualify for solar savings through a PPA—but the rates may rise due to increased demand, reduced federal support, and higher equipment costs.

Either way, you’ll miss out on one of the most generous incentives homeowners have ever had for going solar.

✅ Final Thoughts: Secure Your Solar Plan Today

We’re entering the final phase of the federal solar tax credit—and once it’s gone, it’s gone. Whether you choose to purchase your system or go with a SunWise PPA, the best time to act is now.

At Velasco’s Electrical, we’ve helped hundreds of homeowners transition to solar with confidence, savings, and peace of mind. We manage every detail—from consultation to install—so you can focus on locking in your long-term energy savings.

🟢 Start your quote today.
🟡 Beat the deadline.
🔵 Own your power before the rules change.