For years, the federal government has provided helpful tax credits on new solar energy installations, saving homeowners thousands of dollars on new builds as they switch to a renewable, environmentally friendly energy solution.
However, this powerful assistance tool will be gone for good at the end of this year.
Part of the omnibus tax bill signed into law on July 4 will eliminate this credit on Dec. 31, axing a popular program that more than 3.4 million Americans claimed on their 2023 tax returns alone, per Internal Revenue Service data.
With major incentives on solar now going away, time is of the essence to begin your road to energy savings with YellowBall, which specializes in solar energy builds courtesy of our expert team of technicians located across Montana and Wyoming.
Here’s all you need to know about the federal solar tax credit – and how you can take advantage of it before it sunsets:
What is the Federal Solar Tax Credit?
Also known as the Residential Clean Energy Credit, the framework for the modern version of the federal solar tax credit was introduced in 2005 as part of the Energy Policy Act, a bipartisan bill that was signed into law by President George W. Bush.
The 30% credit was originally capped at $2,000 for homeowners. However, the residential cap was removed in 2008, sparking major growth in residential solar energy throughout the 2010s.
The credit percentage was lowered gradually to 22% before being restored back to 30% as part of the Inflation Reduction Act of 2022. The life of the credit was also extended to 2032 in the process.
Why is the Federal Solar Tax Credit Ending?
The One Big Beautiful Bill Act, President Donald Trump’s hallmark tax legislation now signed into law, is rolling back many green energy tax breaks in the near future – including the federal solar energy tax credit.
The federal solar energy tax credit for residential projects will be eliminated at the end of this year, and residential solar energy projects must be in service by Dec. 31 to be eligible. Additionally, project construction needs to begin within 60 days of the bill becoming law to qualify to receive tax credits, impacting installation timelines and creating additional headaches.
The end of the credit erases thousands of dollars of savings on new solar energy builds from 2026 onward and removes the credit from the federal tax code six years ahead of schedule. It is a blow toward homeowners trying to install cleaner, cheaper long-term energy solutions by making installation costs more expensive.
“The elimination of the federal solar tax credit greatly hurts those in our communities who want a reliable, cost-effective source of clean energy,” YellowBall CEO Justice Graham said. “Homeowners in Montana and Wyoming have the right to decide how to power their residence, and we have personally seen how this credit has positively impacted our customers. Though the barrier for entry into the world of solar energy is now raised, YellowBall remains committed to providing solar energy services to the region with our high-quality workmanship and expertise.”
Start Saving with YellowBall – Before It’s Too Late
In a time of uncertainty for solar energy, YellowBall is ready to help you make the process easy – and build your own system with enough time to spare for maximum savings.
With our easy 60-second quote tool on our website, you have the power to start your solar energy journey in minutes. Once you solidify your installation plans and we secure the proper permits and inspections needed to go forward, you’ll have your solar power system ready to go in as little as 1-3 days while being backed by YellowBall’s unmatched customer service.
Perhaps most importantly, however, you’ll have the opportunity to lock in your 30% savings credit before it goes away for good.
Interested in bringing solar energy to your home – and watching the savings on your energy bill rise? Call YellowBall for your free estimate to ensure that a brighter tomorrow begins today!
