You’ve probably heard on the news that Congress is considering tax cuts for the wealthy and cutting Medicaid in the big reconciliation bill. But did you know that they have also proposed cutting or eliminating tax credits for solar and batteries, for both individuals and businesses?
We’ll share what’s happened so far, what we know about what might happen, and what you can do to help save these credits. We’ll also discuss if it’s a good idea to install solar and batteries before the end of 2025 to make sure you can use these credits no matter what happens in Congress.
What is Congress Planning to Do?
Congress is currently considering a budget bill that can pass through “reconciliation.” This means that the bill only needs a simple majority vote by Republicans in both the US House of Representatives and the US Senate, before being signed by the President.
As of today, there is a 30% federal tax credit for both individuals and for businesses who install and commission solar and/or battery systems until the end of 2032, then gradually phase out starting in 2033.
On Thursday, May 22nd, the US House voted 215 to 214 to pass a proposed reconciliation bill which would be disastrous for clean energy in the US. Some of the key provisions include ending the 25D residential renewable energy tax credit to zero at the end of 2025 and ending the 48E business credit in 2028, but adding restrictions to the credit that make it basically impossible to use starting 60 days after the bill passes.
These changes would deeply impact the ability of consumers and businesses to install solar and batteries, and in turn, have an enormous detrimental effect on our business. We estimate that for the typical consumer installing solar, the simple payback on installation would increase by 5-7 years. SEIA, our national solar and storage trade group, has shared information on the impact of the house bill.
So what’s next? The Senate will consider the House bill, make changes, and send it back to the House. Although some Republican Senators have expressed support for making changes to the bill, no draft text has been proposed at this time.
What Can I Do to Help Save These Credits?
At this point, it’s all hands on deck for everyone to make their voices heard to their representatives. Overall, the solar industry is putting a lot of focus on Republican senators, so those of us who live in Arizona won’t be able to make an impact there, as our two senators are Democrats.
But we can still continue to let our representatives know how important these credits are, especially Representative Juan Ciscomani in Arizona’s 6th congressional district. SEIA has created the Save Main Street Solar campaign which makes it easy to take action.
We also encourage you to consider writing a letter to the editor or an op-ed sharing how the credits have helped you go solar. And you can ask friends and family in other states to take a minute to share their thoughts with their representatives and senators.
Should I Install or Upgrade My Solar and/or My Battery System?
If you have been considering installing solar or batteries, or adding to your existing system, we strongly recommend you take action soon. It’s certainly possible that the Senate may modify the worst of the House bill, but we just don’t know if that will happen. We also expect that our limited installation schedule will fill quickly for the rest of 2025. It takes us 6-10 weeks from contract signing to install a system, depending on the complexity of the system, your specific building department, and other factors, so time will be quite limited if the Senate doesn’t improve the bill.
We also often hear questions about system upgrades–folks want to know if it makes sense to add more solar modules and microinverters, or to add batteries. Unfortunately, the answer is “it depends.” Overall, if you have significant bills or plan to add new loads such as an electric vehicle soon, you may want to consider adding to your system.
Let’s start with batteries: If you want to have backup power when the grid is down, or have the independence of being able to store your energy onsite, batteries can make sense. Installing batteries won’t affect the amount your utility pays you for energy you send to them. You can learn more about the benefits on our batteries page.
For Tucson Electric Power customers with net metering, TEP has made it clear that you can add to your system as long as you do not require electrical infrastructure upgrades such as a new electrical panel or bigger transformer. Here’s the specific policy from TEP. If you are interested in adding to your net metered system, you can get in touch with us or email your original sales representative, and we can do a quick review to see if an upgrade is possible.
For TEP customers with export rate net billing, if you add to a system, your export rate will drop to the current export rate of 5.7¢/kWh for the remainder of your ten-year lock in period. If you’ve installed solar in the last year or two, this might not be a big impact. But for those who installed farther in the past, this drop in export rate could significantly reduce your savings. You can check with us for more information regarding your specific situation.
For SSVEC & Trico customers, an addition of solar will knock you out of net metering, and put you on an export rate that changes each year. Therefore, we generally don’t recommend adding solar. But batteries can be added without changing your current billing arrangement with Trico or SSVEC.
The Bottom Line
We encourage anyone thinking about solar and/or batteries to take action now. Spend a couple minutes telling your representatives how you feel. Next, get in touch with us if you’re considering installing or adding solar or batteries. Last, please let your friends, family, and colleagues know there may be only a limited time these credits will be available.
Because this is a developing story, and things may change quickly, we recommend that you also check out our Facebook or Instagram for updates. If you have questions or comments, please share them with us!
