The “One, Big, Beautiful Bill” Has Passed: What It Means For Solar

What Changes Will Be Made?

The “One, Big, Beautiful Bill” has a variety of clauses impacting solar directly, primarily from economic and construction standpoints. Let’s take a look at exactly what changes are going to be implemented.

1. The Elimination Of The Solar Investment Tax Credit (ITC)

The ITC, part of Residential Clean Energy Credits, has typically allowed homeowners a 30% tax benefit on any solar property purchased for their home.  This includes both solar panels, battery storage, and any type of solar thermal application for hot water production. 

However, the passing of the “One, Big, Beautiful Bill” unfortunately means the elimination of the ITC beginning in the new year. Therefore, to be eligible for the last wave of the tax credit, you must have your solar system installed or paid for by December 31, 2025. Since solar systems can take months to design and install, we recommend that you start your switch to solar as soon as possible so that you can still reap the rewards of the expiring ITC.

2. The Phasing-Out Of The Solar Business Tax Credits

There are two main business tax credits in the solar industry that you need to know about: the Clean Electricity Investment Tax Credit and the Clean Electricity Production Tax Credit. 

The Clean Electricity Investment Tax Credit is a one-time tax cut for some sort of facility or business that invests in clean energy or, in our case, solar. The base tax credit is typically 6%, but a bonus credit is eligible up to 30% for businesses/facilities that meet certain standards.

The Clean Electricity Production Tax Credit is an ongoing credit based on the electricity generated by any given clean energy facility, or solar, in this case, in the first 10 years of operation. The rate for the credit typically starts at 0.3 cents/kWh generated, but the facility can increase it to 1.5 cents/kWh if it meets certain standards.

The “One, Big, Beautiful Bill” means that these two credits will begin to phase out over the next two years. Right now, they are still in place, but any business solar project that begins more than a year from now must be completed and turned on by December 31, 2027, or else it will no longer qualify for these credits.

3. The Elimination Of The Electric Vehicle (EV) Tax Credit 

The EV tax credit has typically granted a $7,500 credit to those who purchase new electric vehicles and a $4,000 credit to anyone who buys a used one. 

However, the “One, Big, Beautiful Bill” is bringing this tax credit to an end starting on September 30, 2025. This means that, now, more than ever, is the time to invest in an electric vehicle.

4. Adjustments To The Advanced Manufacturing Tax Credit

The Advanced Manufacturing Production Tax Credit has always provided per-unit tax credits to manufacturers that produce specific clean energy components in the U.S. It’s meant to incentivize domestic manufacturing as opposed to reliance on foreign supply chains. Examples of components could include PV cells, modules, wafers, polysilicon, and trackers.

Under the “One, Big, Beautiful Bill,” it is now expected that at any given manufacturing company, 65% of these components must be sourced domestically, these components must actually be made into a product, and that product must be sold elsewhere to qualify for this tax credit. This tax credit is also still in place until 2032. 

Under the Advanced Manufacturing Tax Credit, there is also a clause known as the Critical Mineral Bonus. The Critical Mineral Bonus gives manufacturers a tax credit equal to 10% of the production cost for minerals produced in the U.S. that they use for their clean energy, or, in this case, solar projects. The Critical Mineral Bonus will begin phasing out in 2031.

5. New Foreign Entity Of Concern (FEOC) Restrictions

Foreign-Influenced Entities can now no longer claim, transfer, or receive direct pay for tax credits. Supply chains also must meet rising thresholds for avoiding “material assistance” from prohibited foreign entities, starting at 40% domestically-sourced content in 2026 and reaching 60% by 2030. If these regulations are violated, businesses will have revenue stripped from them. 

Foreign-Influenced Entities are companies that are at least 25% owned by a Specified Foreign Entity (SFE), at least 40% owned by multiple SFEs, or with at least 15% of business debt belonging to a SFE. The most commonly-known SFEs are Russia, China, North Korea, and Iran. Due to all of these new FEOC restrictions, it is recommended for many companies to cut ties with Specified Foreign Entities to avoid gaining “Foreign-Influenced Entity” status, therefore dodging potential regulations and punishments.

6. The Establishment Of New Public Solar Land Fees 

As a result of the “One, Big, Beautiful Bill,” there are now new regulations on building solar property on public land.

Once the system is running, the solar property owner pays rent equal to the five-year pasture average cost of that land. However, once the system is actually operational, the property owner will need to pay whichever is higher – the pasturage average or 3.9% of gross power revenue.

Furthermore, beginning in 2026, 25% of those fees will be paid to the host state of the public land, and 25% will go to the host county of that public land. 

7. The Elimination Of Energy-Efficient Home Improvement Tax Credits

In the past, homeowners who made energy-efficient upgrades, such as new windows, doors, insulation, air conditioners, or heat pumps, were eligible for a 30% Energy-Efficient Home Improvement Tax Credit on up to $1,200 worth of improvements. 

However, the “One, Big, Beautiful Bill” is eliminating this credit at the end of 2025, so make your home improvements sooner rather than later!

What Is Still Intact?

Despite all of the major changes that the “One, Big, Beautiful Bill” is bringing to solar, there are some laws and benefits that are remaining the same, which leaves some hope for the future of the industry.

1. Residential Third-Party-Owned Systems Remain Eligible For Credits

Third-Party Ownership (TPO) includes leases and Power Purchase Agreements (PPA). A PPA is a legal arrangement in which a power producer agrees to sell electricity to a buyer at an agreed-upon price for a specified duration. With solar, it’s very common for the seller to be a project developer or energy producer while the buyer is typically a utility company, government agency, or large business seeking solar energy. The term length of this agreement is usually 10-25 years with rates per kWh of electricity that are fixed, escalating, or variable depending on the conditions of the agreement. This deal helps the buyer lock in energy costs and helps the seller secure financing.

So, joining a solar TPO and getting involved in a PPA means that a business technically owns the solar array and you can then “lease” it from them. This will allow you to claim the business tax credits of up to 30%, the same as the residential ITC. It’s essentially a loophole to still get your tax credit even though the ITC will soon be gone.

With that being said, you would still need to work on this loophole relatively soon, because your system would need to be installed by the end of 2027 to still be eligible. However, if the project starts by July 4, 2026, it has four years to finish it. This is known as a safe harbor to ensure that clean energy projects still have adequate time to collect the expiring benefits. These timelines are still being worked out due to an executive order signed on July 7th, which we will discuss later on. 

2. No Changes To Batteries

Battery systems are still eligible to receive the rewards of the two business tax credits: the Clean Energy Investment Tax Credit and the Clean Electricity Production Tax Credit, regardless of whether they are standalone or paired with a solar system. 

This means that you could take advantage of the loophole mentioned to lease batteries as well in order to earn the business tax credits. 

The only larger adjustment made to the battery industry is that battery system producers still have to comply with the new FEOC regulations.

3. The Domestic Content Bonus Credit Remains 

The Domestic Content Bonus Credit allows renewable energy projects, such as solar projects, to receive a tax credit for using a certain percentage of U.S.-made steel, iron, and manufactured products. In order to receive this 10% bonus tax credit, the project must now achieve a domestic metal rate of 45 percent until the end of 2025, 50% starting in 2026, and 55% for projects that begin in 2027 or later. 

4. No New Excise Taxes On Solar

Excise taxes are levies placed on particular goods or activities, typically collected at the time of production, sale, or consumption. These taxes are considered “targeted” because they are included in the product’s price and are generally paid by the manufacturer or producer rather than the consumer.

The “One, Big, Beautiful Bill,” fortunately, is not implementing any new excise taxes on solar specifically.

A Recap

Incentive / Policy	Status Before the Bill	Status After the Bill	Key Deadlines / Notes
Residential Solar Investment Tax Credit (ITC)	30% tax credit for homeowners installing solar	Eliminated	Must install or pay by Dec 31, 2025 to qualify
Business Clean Electricity Investment Tax Credit (CEITC)	One-time credit up to 30% for solar projects	Phasing out	Must begin by July 4, 2026, and complete by Dec 31, 2027
Business Clean Electricity Production Tax Credit (CEPTC)	Ongoing credit per kWh produced for 10 years	Phasing out	Same as CEITC: Begin by July 4, 2026, placed in service by Dec 31, 2027
Electric Vehicle (EV) Tax Credit	$7,500 for new EVs, $4,000 for used EVs	Eliminated	Ends September 30, 2025
Energy-Efficient Home Improvement Tax Credit	30% credit for eligible upgrades (up to $1,200)	Eliminated	Ends December 31, 2025
Advanced Manufacturing Production Tax Credit (AMPTC)	Per-unit credit for U.S.-made clean energy components	Modified	U.S. production must be meaningful; remains in place until 2032
Critical Mineral Bonus (AMPTC add-on)	10% credit on U.S.-produced critical minerals	Phasing out	Begins phase-out in 2031
Public Land Solar Fees	Per-acre lease rates, minimal revenue sharing	Updated	Rent = higher of 5-year pasture avg. or 3.9% of gross revenue; 25% to state & 25% to county starting 2026
FEOC (Foreign Entity of Concern) Restrictions	Minimal oversight	Significantly expanded	Must avoid prohibited entities (e.g., China, Russia) or lose credit eligibility
Third-Party-Owned (TPO) Solar / PPAs	Eligible for business tax credits	Still eligible	Must start by July 4, 2026, and complete by Dec 31, 2027
Battery Storage Systems	Eligible as standalone or paired systems	Still eligible	Subject to CEITC/CEPTC deadlines unless clarified otherwise
Domestic Content Bonus Credit	10% bonus for using U.S.-made steel/iron/components	Still active	U.S. content thresholds: 45% (2025), 50% (2026), 55% (2027+)
Excise Taxes on Solar	No solar-specific excise taxes	Still none	No changes introduced

The Executive Order

On July 7th, three days after the passing of the “One, Big, Beautiful Bill,” Trump also signed an executive order that included additional requests related to the original bill. Here are some of the demands he had of his White House staff:

• Eliminate reliance on green energy because it disrupts the market and makes taxpayers bear the cost
• Continue to reduce and eliminate clean energy taxes, including solar, especially when they are being affected by foreign influence and are unreliable
• Within 45 days, the Secretary of the Treasury should strictly enforce the termination of Clean Energy Investment and Clean Electricity Production Tax Credits for wind and solar
  • They should make sure developers can’t fool the system and pretend like they’ve started construction early just so they can receive the tax credits
    • They should only give tax credits to manufacturers who have actually done a meaningful amount of work on the project
• The Secretary of the Treasury should continue to implement the enhanced FEOC restrictions 
  • They should specifically focus on China

• Within 45 days, the Secretary of the Interior should check to see if wind and solar are getting preferential treatment over other energy source industries 
  • If so, they must change regulations so that these industries are not favored

• Within 45 Days, the Secretary of the Treasury and the Secretary of the Interior should make a report with their findings and plans of action to implement the conditions of this order

In summary, Trump’s main goal in issuing this executive order is to further reduce the influence of clean energy industries and adjust safe harbor building laws by investigating what constitutes “construction having been started” for a project. 

Other Frequently Asked Questions (FAQ)

Are Local And State Incentives Affected By This Federal Bill?

No – state and local solar incentives (like Massachusetts sales or property tax exemptions, for example) remain intact unless separately repealed. However, some state programs rely on federal guidelines, so there’s definitely a possibility for some ripple effects in the future. 

Will Existing Solar System Owners Lose Any Benefits From This Bill?

No – existing systems will keep their previously awarded tax credits and incentives. This bill does not retroactively remove benefits that were already granted or claimed.

Could This Bill Be Challenged Or Repealed In The Future?

Yes – any future Congress or administration could pass new legislation to reinstate or replace clean energy and solar incentives. However, until then, these changes are law, this is our situation, and people should plan accordingly. 

What Do We Do?

Though we are entering a time of uncertainty and unpredictability for the solar industry, there is still hope. As mentioned, there is still time for you to collect your solar benefits before they expire and there are still loopholes for you to try out if you want to extend these benefits for longer. Keep in mind that battery storage as a business investment is still safe from these regulations. Furthermore, leases and PPAs are a great route to take advantage of as well for residential systems. 

Additionally, due to the Northeast having the highest utility rates in the country, solar systems will still provide you with savings compared to constantly rising rates, the security of generating your own power, and energy independence.

It’s also important to remember why you are buying solar in the first place. While many appreciate solar for its excellent financial incentives, it’s time to look past those surface-level aspects and recognize how beneficial solar is for the environment. By investing in solar, even if you weren’t to receive as much tax compensation, you would be helping to heal our planet panel by panel. Solar isn’t just a fiscal solution, it is a quality of life choice, and that is so important to remember in turbulent times such as these. 

Go Solar Now!

With all of that being said, the 30% ITC is still in place until December 31st. So, if you want to take advantage of it before it’s eliminated, you need to sign up for solar as soon as possible. Here at Solaris Renewables, we are accepting new sales through July 31st, 2025, so that we can guarantee that your system is installed before the end of the year and eligible for the tax credit. If you live in Massachusetts, New Hampshire, or Maine, don’t even think about waiting! Visit our website before the end of the month to get a quote on your potential solar system before you lose your chance at the best deal.