30% Federal Solar Tax Credit Ending in 2025: What Homeowners Need to Know
If you’ve been thinking about installing a solar array on your home, you may have seen headlines about Congress’ recent elimination of the federal solar tax credit for projects completed after December 31st, 2025.
What Is the Federal Solar Tax Credit?
Under current law (the Inflation Reduction Act of 2022), homeowners can claim 30% of the cost of new, qualified clean energy systems like rooftop solar as a credit on their federal taxes. This benefit, known as the Residential Clean Energy Credit (25D), has made solar more affordable and more accessible for homeowners across the country and right here in Maine. The vast majority of residential solar installations qualify for this credit.
What changed?
The tax credit remains intact, but the expiration date has been changed. This tax credit is now scheduled to run only through the end of this year; projects completed after December 31st, 2025, are ineligible for the credit.
Even without the tax credit, solar still makes financial sense
While the elimination of the 30% federal solar tax credit after 2025 may feel like a setback, it’s important to remember this: solar energy remains a smart, long-term investment — with or without the tax credit.
Even without federal incentives, generating your own electricity can lead to substantial savings over time, especially as utility rates continue to rise year after year. In an ever-changing world, that certainty and control over your power can feel priceless.
Here’s why solar still adds up:
- Reduce or eliminate your electric bill: Once your system is installed, you start saving immediately by reducing or eliminating your monthly utility costs.
- Financing fixes your monthly electric bill: Financing the purchase locks in your annual electricity cost in the face of ever-increasing electrical rates.
- Energy independence: Solar reduces your vulnerability rising rates and increases your independence when a battery is added to your solar electric system.
- Benefit from a timely ROI: Even without a tax credit, most systems will pay for themselves within 10-15 years. With 25-year manufacturer warranties on most components and Maine Solar Solutions’ 30-year warranty, you can save money right away and look forward to free power after the system pays for itself.
- Added home value: Studies continue to show that homes with solar arrays that eliminate or greatly reduce their electric bills sell faster and at a premium compared to those without a solar electric system.
- Environmental benefits: Switching to clean energy helps reduce your carbon footprint and contributes to a more sustainable future, which many homeowners value just as much as financial savings.
Take the next steps
While this change is a reminder that incentives don’t last forever, the long-term benefits of going solar absolutely do. Solar remains one of the smartest and most sustainable home improvements you can make.
Our team at Maine Solar Solutions is here to guide you through financing, design, and installation so you can start enjoying years of energy savings and independence. Contact us today for a free site assessment.
