Time is running out for California homeowners to lock in the full 30% federal solar tax credit before potential policy changes put it at risk. Right now, the Residential Clean Energy Credit allows homeowners to claim 30% of their solar installation costs as a tax credit, slashing thousands off their federal tax bill. But will this incentive still be around after 2025? The answer is uncertain—and that’s why acting now is crucial.
What Is the 30% Solar Tax Credit?
The solar Investment Tax Credit (ITC) is a federal incentive designed to make solar more affordable. Homeowners who install solar panels can claim 30% of their system’s cost as a dollar-for-dollar reduction in their taxes. That means if your system costs $20,000, you’d get a $6,000 credit—a huge savings opportunity.
Even better, there’s no cap on the credit, and if you don’t use the full amount in one year, you can roll it over into future tax years.
As of 2025, the credit remains at 30%, but beyond that? It’s anyone’s guess. With political shifts and policy changes looming, waiting could mean losing out on thousands in savings.
Why 2025 May Be the Last Year for the 30% Credit
The Inflation Reduction Act (IRA) of 2022 extended the solar tax credit through 2032, with a gradual step-down starting in 2033. However, political changes could cut this timeline short.
Following President Trump’s return to office, his administration has openly opposed renewable energy incentives. During his campaign, he promised to repeal the IRA, the very law keeping the solar tax credit at 30%. In his first week back, he issued an executive order attempting to suspend funding for solar incentives—a move that was legally challenged but sent a clear message.
While the credit is still intact for now, a Republican-controlled Congress is discussing revising the IRA, which could lead to an early phase-down or outright repeal of the 30% credit as soon as 2026.
For homeowners considering solar, this means one thing: 2025 is the safest time to install solar and claim the full tax credit before it’s too late.
California’s Electricity Rates Are Skyrocketing
Going solar in 2025 isn’t just about securing the tax credit—it’s also about protecting yourself from soaring electricity costs.
California already has some of the highest electricity rates in the country, second only to Hawaii. And those rates are climbing fast, driven largely by wildfire-related costs. Utilities like PG&E, SCE, and SDG&E have spent billions on wildfire prevention and payouts, passing the cost onto customers.
Since 2020, wildfire mitigation expenses have been a leading cause of rate hikes. Regulators project that electricity rates will continue to outpace inflation through at least 2027 due to ongoing wildfire risks and infrastructure upgrades.
The bottom line? Your electricity bill isn’t going down anytime soon.
Solar Can Shield You from Utility Rate Hikes
By installing solar, you produce your own electricity and shield yourself from rising rates. Every kilowatt-hour you generate is one less you have to buy from the grid at premium prices. With rates surging, solar savings have never been more valuable.
Don’t Wait—Seize the 2025 Solar Opportunity Now
All signs point to 2025 as a critical (and possibly final) window to go solar under the best conditions:
✔ 30% Federal Tax Credit: Still available in 2025, but may be reduced or eliminated after that. ✔ Rising Electricity Costs: California rates are climbing fast, making solar savings even more valuable. ✔ Energy Independence: Avoid unpredictable utility hikes by generating your own power.
Waiting until 2026 could mean missing out on thousands in tax credits and locking yourself into higher electric bills.
Take Action Now
Don’t risk losing this golden opportunity. If you’re thinking about solar, now is the time to act. Get quotes from reputable solar installers, talk to a tax professional, and make the switch before policy changes cost you big time.
2025 is the year to go solar. Claim your 30% credit, cut your electricity costs, and secure your energy future before it’s too late.
Sources:
- Internal Revenue Service – Residential Clean Energy Credit
- EnergySage – Federal Solar Tax Credit in 2025
- Solar.com – “Trump and the Fate of the 30% Solar Tax Credit”
- CalMatters – “Californians Pay Billions for Power Companies’ Wildfire Prevention”
- California Public Advocates Office – Wildfire Costs & Utility Rate Increases Report
