Federal Solar Tax Credit Ends December 31, 2025 — What Californians Need to Know

Central CoastCentral ValleyPolicy & Market UncertaintyFinancing & Incentives
Written By Katrina Kramer
A California home with rooftop solar panels and a large calendar marking December 2025, symbolizing the federal tax credit deadline.

The countdown is on. Homeowners have until December 31, 2025 to install solar and claim the 30% federal tax credit under the new law.

What Changed in Washington?

On July 4, 2025, President Trump signed the One Big Beautiful Bill into law. Tucked inside was a major change for homeowners: the early termination of the 30% federal solar tax credit (Residential Clean Energy Credit, Section 25D).

Instead of running through 2032, the credit now ends on December 31, 2025 — seven years ahead of schedule. The news has already shaken solar markets across California.

What This Means for Homeowners

  1. Your solar installation must be completed by December 31, 2025 to claim the 30%.

    Your system must be installed, inspected, and fully connected to the grid (with Permission to Operate) before the deadline. If it’s not “placed in service” by then, the credit is gone.

  2. Leases and PPAs are still eligible — through 2027.

    While homeowners lose access to the residential credit, third-party owned systems (leases and power purchase agreements) still qualify for the commercial ITC (Section 48E) through the end of 2027. Many providers pass the savings along in the form of lower monthly payments.

  3. Battery storage qualifies through 2032.

    Standalone batteries (10 kWh+) are still eligible for the 30% credit through 2032 — even without solar. Covered costs include the battery itself, labor, inverters, and monitoring. That means families looking for blackout protection or peak-demand savings still have time to act.

  4. Big energy developers face separate deadlines.

    The bill also affects large-scale projects, requiring them to begin construction by July 4, 2026 and finish by 2027. Not directly relevant for homeowners, but part of the broader energy landscape.

Why People Are Concerned

  • Analysts predict a 59% drop in clean energy buildout by 2035.

  • Electricity rates could rise up to 18% nationwide.

  • California homeowners face added uncertainty as state-level programs are also under review.

Even if you weren’t planning to go solar right away, this shift has real consequences — especially if your plan was to “wait and see.”

What Homeowners Can Do Now

What to Do Why It Matters
Move quickly You must complete the install by 12/31/25 to qualify for the full credit.
Consider leases or PPAs Remain eligible through 2027 and can be a simpler path to solar savings.
Weigh storage separately Batteries still qualify through 2032 and reduce dependency on PG&E.
Talk to a tax advisor Some households may qualify for additional deductions or timing strategies.


Bottom Line

The solar landscape just changed — fast. If you’re planning to go solar, the clock is ticking.

At Viva Energy, we’re already helping homeowners lock in the 30% credit before the window closes. Not sure where your project stands or whether you qualify? Let’s talk today.

Request a Free Consultation

References

This article was drafted with the assistance of AI and reviewed by the Viva Energy team for accuracy and clarity. If you spot an error or have a suggestion, please let us know at vivainsider@gmail.com.
Katrina Kramer
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