How the “One Big Beautiful Bill” Impacts Solar & Clean Energy Tax Credits

business man closeup on hand signing legal document OBBB energy tax credits bill

On July 4, 2025, the “One Big Beautiful Bill” (OBBB) was signed into law, introducing major shifts in the U.S. clean energy landscape. If you’re planning a solar installation or investing in clean energy for your home or business, these updates matter. While some incentives remain unchanged, others face critical deadlines that could impact your return on investment.

Let’s break down what changed — and what didn’t.

Key Changes to Federal Solar Tax Credits

The biggest shifts in federal clean energy incentives come down to timelines and eligibility. While the 48E and 45Y tax credits won’t phase down as previously expected, projects now face firm deadlines: construction must begin by July 4, 2026, or be placed in service by December 31, 2027.

Starting in 2026, new FEOC restrictions will also take effect, blocking foreign-influenced or specified foreign entities from claiming these credits and tightening rules on supply chain sourcing. Meanwhile, the widely used 25D Residential Clean Energy Tax Credit—which lets homeowners deduct 30% of installation costs—is set to expire at the end of 2025, creating a clear incentive to act before the deadline.

Residential vs. Commercial Credits: What You Need to Know

There are several federal tax credit options, and understanding the difference is key to maximizing your savings:

  • Residential Clean Energy Tax Credit (25D)

    For homeowners, this credit currently allows 30% off the system cost as a federal tax deduction. It applies to solar PV, battery storage, and other qualifying clean energy technologies. This credit is sunsetting at the end of 2025.

  • Commercial & Utility-Scale Credits (48E / 45Y)

    These technology-neutral credits apply to businesses, utilities, and developers producing or investing in clean electricity. They offer either a production-based incentive (45Y) or an investment-based incentive (48E). Projects must meet construction and service deadlines to remain eligible.

  • Advanced Manufacturing Credit (45X)

    Designed to boost U.S. clean energy manufacturing, this credit supports producers of solar panels, inverters, batteries, and other critical components. To qualify, at least 65% of the product’s cost must be U.S.-made, and the product must be sold to an unrelated buyer.

What Stays the Same

Despite the new timelines and sourcing restrictions, several key provisions remain unchanged. There are still no excise taxes on solar projects, and homeowners and businesses can continue to benefit from third-party ownership or leasing models. Transferability rules remain limited, meaning credits can’t be transferred to foreign entities. And for those considering energy storage, the placed-in-service deadlines don’t apply in the same way they do for solar generation, offering a bit more flexibility in project planning.

Why This Matters for Homeowners and Businesses

The next 18 months are critical.

  • Homeowners looking to lock in the 30% federal credit need to install before December 31, 2025.

  • Businesses planning solar or storage projects should align construction timelines to meet July 2026 or December 2027 deadlines.

  • Manufacturers and developers must review supply chains to avoid FEOC-related restrictions and protect credit eligibility.

These changes may narrow windows of opportunity but also create incentives to act now — especially for residential systems.

Green365 Can Help You Navigate the Changes

Understanding tax credits shouldn’t be complicated. Whether you’re a homeowner exploring rooftop solar or a business planning a larger energy project, Green365 can help you:

  • Identify which credits apply to your project

  • Coordinate installation timelines to meet federal deadlines

  • Connect with trusted installers and financing options

  • Avoid costly compliance pitfalls

Download the OBBB Fact Sheet (PDF)

Download the OBBB Fact Sheet (PDF) for a detailed breakdown of new clean energy credit deadlines, eligibility rules, and what they mean for your project.
Download the PDF