Skip to content
  • There are no suggestions because the search field is empty.

Will the solar Investment Tax Credit (ITC) still apply to my project?

The solar ITC remains available but with new restrictions. December 31, 2025 is the practical deadline for most projects seeking the full 30% rate.

Under the Inflation Reduction Act (2022), the solar ITC was locked at 30% through 2032. However, the One Big Beautiful Bill (July 2025) dramatically changed the timeline, introducing new equipment restrictions and tightening construction start requirements. December 31, 2025 is now the practical deadline for most projects seeking the full 30% rate.

  • Key new restrictions: Equipment sourced from Foreign Entity of Concern (FEOC) countries — primarily China — is disqualified from the ITC under current law. This affects a significant portion of the solar module supply chain. Projects must verify domestic content or non-FEOC equipment sourcing to confirm eligibility. Projects over 1 MW must also demonstrate prevailing wage and apprenticeship (PWA) compliance to receive the full 30% rate — without it, the base rate drops to 6%.

  • Bonus adders from the IRA remain available: Energy Community bonus (+10%), Low-Income Community bonus (+10% to +20%), and Domestic Content bonus (+10%).

Does the shortened timeline make solar less viable? In high-rate electricity markets with strong solar resources — California, New York, Illinois, Florida, Texas — many commercial solar projects achieve positive returns without any ITC. Evaluate your specific building's economics: local electricity rates, solar potential, roof condition, and available incentives. In many markets, solar makes financial sense even after the ITC declines, though the returns are lower.