Don’t Leave Money on the Table!

Solar energy remains the most affordable and fastest energy source to deploy in 2026 despite the Trump Administration Federal Efforts to repeal tax credits and attack the industry. The federal residential solar tax credit, known as the Residential Clean Energy Credit, originally started in 2006 following the Energy Policy Act of 2005. It was designed to provide a 30% tax credit for qualified solar energy systems. While it underwent various extensions, it was significantly expanded by the Inflation Reduction Act of 2022.  These efforts have been stripped and changed by the passing of HR 1, “The Big, Beautiful Bill” on July 4, 2025. This bill ended residential credits at the conclusion of 2025 but credits still remain for many more entities. 

 

Businesses, non-profits, places of worship, local units of government and schools all remain eligible until the end of 2027. Some further credit opportunities remain for utility scale projects beyond 2027 as long as they start before July 4, 2026. Details about continuous construction and applicable reporting are available if this scenario may apply to your project. 

 

In addition to the residential solar credits ending, Electric Vehicle (EV), credits ended on September 30. 2025. While the changes from HR 1 have had impacts on the solar industry, innovative options such as third party ownership are emerging to still capture the 30% business credits while passing on the financial savings to residential rate payer users. 

 

While many clean energy aspects are under attack, some potentials still remain eligible for Federal tax credits such as Battery Energy Storage Systems (BESS), a 30% credit for qualified installation costs remain through 2032, primarily under the Residential Clean Energy Credit (25D) for homes and the Investment Tax Credit (48/48E) for businesses. The credit applies to battery systems with a capacity of 3 kWh or more, including labor and installation, with no maximum dollar limit. 

 

In addition to BESS, through 2032, homeowners can claim a federal tax credit (Energy Efficient Home Improvement Credit) for 30% of the cost of eligible heat pumps, up to a maximum of $2,000 per year. This credit applies to electric or natural gas heat pumps and heat pump water heaters that meet the highest CEE efficiency tier. Costs include installation and labor. 

 

Not only do I serve as a board member of Capital Area Friends of the Environment but I serve as the Director of Michigan Solar Communities with Great Lakes Renewable Energy ASsociation, feel free to contact me with any additional questions you may have! marshall@517cafe.org