Solar Incentives Ending Soon: Deadlines, Qualifies, & How to Lock

If you’re planning solar or batteries, the window is closing on several popular incentives. Below we break down what’s ending by December 31, 2025, what timing rules actually mean (installed vs. started), and a simple action plan to secure benefits before they disappear.

What’s changing at a glance

• Residential federal credits face year-end cutoffs.IRS guidance issued after the July 4, 2025 law change (“One Big Beautiful Bill”) shows that several homeowner credits including the Residential Clean Energy Credit (solar + batteries) end for expenditures after December 31, 2025 unless you meet specific transition rules.
• For businesses and larger projects, new IRS notice clarifies a “beginning of construction”exception for wind/solar under technology-neutral credits 45Y/§48E. Projects that begin construction by July 4, 2026 can still qualify despite later placed-in-service dates. (Details matter see the Physical Work Test.
• State/utility rebates continue but budgets are limited.In California, the SGIP battery incentives are open with step budgets and waitlists first come, first served. Don’t wait for December to apply.

Homeowners: the federal rules you need to know (2025)

1) Residential Clean Energy Credit (solar, batteries)

• Credit for home solar PV and battery storage (stand-alone or paired).
• Key cutoff:IRS post-law FAQ indicates no credit for expenditures made after December 31, 2025 so timing your payments and install matters this year.
• Battery storage remains eligible through 2025 under current guidance.

Placed-in-service vs. paid: Historically, the residential credit keys off placed in service in your tax year. The IRS maintains pages on residential clean energy and home energy credits review them before you sign so your documentation lines up.

2) Energy-efficient home improvement credit (not PV, but relevant)

If you’re also doing envelope or HVAC upgrades, note that those credits have their own annual limits and timing rules

Action for homeowners:

• Contract and schedule installationso work is finished in 2025 (and keep receipts showing dates).
• Ask your installer for a paid-in-full invoiceand a letter confirming placed-in-service date for your records.
• Talk to your tax advisor; print the relevant IRS pagesfor your file.

Businesses/Developers: don’t miss the “begin construction” lifeline

For commercial solar and community/storage projects, the IRS Beginning-of-Construction Notice (issued August 2025) explains how to preserve eligibility under §48E/§45Y despite future repeals:

• Deadline:Begin construction by July 4, 2026 to avoid the termination date.
• How to start:The IRS emphasizes the Physical Work Test (and continuity). Plan for real, documented work on-site or under binding manufacturing contracts.

Action for businesses:

• Lock EPC contractswith clear physical work milestones in 2025–H1 2026.
• Build a continuity planand photo/log documentation kit that aligns with the IRS notice.

California spotlight: SGIP battery rebates (stack with federal)

• SGIP helps buy down home and business batteries; equity tiers can be very generous.
• Status changes by budget stepand utility territory (some steps are waitlisted). Apply now, don’t wait for year-end.

Action in CA: Submit your SGIP reservation immediately if you’re considering a battery funding is limited.

Your 10-day action plan (to beat the clock)

1. Site assessment & quotethis week (panels + battery).
2. Pick equipmentin stock (avoid supply delays): panels, inverter, battery.
3. Sign contractwith clear install timeline and payment schedule.
4. Apply for state/utility rebates(e.g., SGIP) now.
5. Schedule installand ensure placed in service by 12/31/2025 (homeowners).
6. Keep records:paid invoice, equipment spec sheets, installer letter with placed-in-service date.
7. For businesses:document Physical Work before 7/4/2026 and continuity.
8. Confirm interconnectionsteps early (utility timelines can slip).
9. Coordinate tax filingswith your CPA.
10. Plan add-ons(EV charger, efficiency upgrades) with their own deadlines.

Simple cost/example (homeowner)

• System price: $20,000
• Potential 2025 federal credit (if eligible): $6,000
• Net after credit: $14,000
• Add any state/utility rebates(applied on invoice or after install). Final out-of-pocket can drop further depending on SGIP/utility programs.

Numbers are illustrative; your actual eligibility depends on tax liability and program rules. Consult your tax professional.

Next steps (CTA)

• Check eligibility & stock:We’ll confirm what you can still claim and line up in-stock panels, inverters, and batteries so you meet the deadline.
• Book installation dates now:Year-end calendars fill up fast.
• Paperwork help:We’ll provide paid invoice, placed-in-service letter, and product documentation for your tax files.

Sources & guidance

• IRS — Residential Clean Energy Credit(overview and phase-down details).
• IRS — Home energy credits overview(related timing/limits).
• IRS — Beginning of Construction Notice for §§45Y/48E(deadlines, Physical Work/continuity).
• CPUC/Program sites — California SGIPbattery incentives and budget status.

Disclaimer: This article is general information, not tax advice. Incentive rules can change always verify with official IRS/state/utility sources and consult your tax professional.