It’s been a month since the One Big Beautiful Bill was passed. We all know that the individual taxpayer ITC (25D) is dead after this year and that residential leases and PPAs got saved, but there is still a lot of confusion around the details. In fact, my informal poll on LinkedIn found:
63% of respondents knew either little to nothing about the details of how the OBBB as it applied to residential solar.
And no wonder. There’s no single resource that residential solar installers and businesses can turn to for clear answers (No. Chatgpt doesn’t count here.) Questions like “Does the system have to be paid off by the end of 2025 or just installed to qualify? And what does ‘installed’ even mean?”
That’s why we pulled together the top questions residential solar installers are asking about the OBBB—and tapped Bodhi’s friends in the industry to give you clear answers in plain English. We also sprinkled in their top advice for navigating 2025 and the post-ITC landscape.
Disclaimer: We are not tax experts. We’re just solar nerds who read the bill (yes, the actual bill) and obsess over this stuff so you don’t have to. Please consult a real tax professional. Like, an actual CPA—not your cousin’s roommate with a “hot take” on LinkedIn or the guy on Instagram who uses #solarboss unironically.
Read the Section 25D on cash and loans below or jump to the Section 48E on leases and PPAs.
Special thanks to Zoe Gaston — Wood Mackenzie, Mike Gilroy — Sungage Financial, Robyn Kenkel — Enfin, Ryan Barnett — Palmetto, Dema Headley — Climate First Bank, David Dunlap — BayWa r.e., Erik Holvik — EnergySage, Rohan Humphrey and Madeline Turner — Ohm Analytics, and Stan Pipkin — Lighthouse Solar for their contributions to this article.
25D cash and loans questions
This pertains to the tax-credit that homeowners are able to claim for the purchase of a solar+ system
1. Is the federal solar tax credit for homeowners (Section 25D) going away?
Yes. The OBBB terminates Section 25D for any solar or battery - paired or stand-alone - equipment installed after December 31, 2025. Until that date, homeowners may still claim the full 30% credit. There is no phase‑down; the credit simply disappears in 2026.
Pro Tip: “Shift the sales strategy. The real value of solar isn’t the tax credit—it’s locking in predictable energy costs and protecting homeowners from rising utility bills.” - Dema Headly, Climate First Bank
2. What’s the deadline for homeowners to qualify for the 25D residential solar tax credit? And what does it mean to “qualify”—is it based on contract date, full payment, installation, or PTO?
11:59 p.m. on December 31, 2025. While the OBBB amends Section 25D to say the credit applies to “expenditures made” before that date, the IRS has consistently interpreted this to mean the installation must be completed—not just contracted, paid, or permitted.
The IRS guidance states that an “expenditure shall be treated as made when the original installation of the item is completed.” That phrase leaves room for interpretation, but in practice, most lenders and tax professionals agree that substantial completion (e.g., milestone M2)—meaning the system is fully installed and capable of operating—should be the target. Permission to operate (PTO) is not explicitly required.
3. Can a homeowner qualify for the tax credit if they pay in 2025 and install the system in 2026?
No. Signing a contract, making a down‑payment, or even paying 100 % of the invoice without substantial completion of the system in 2025 does not qualify.
RELATED: 5 steps solar installers are taking right now to survive the GOP tax bill
4. Does it matter if the system is purchased with cash or financed with a loan?
No—the 25D tax credit applies whether the system is paid in cash or financed. However, most solar loans assume the homeowner will use the tax credit to pay down the loan early. As year-end approaches and the window for tax credit eligibility closes, loan providers are adjusting their products and timelines. One lender indicated they will stop originating new loans with ITC‑related prepayments in August, while another plans new products in Q4. Installers should coordinate with lenders early to align financing terms with install timelines and ensure eligibility expectations are met.
Pro Tip: “There’s a bit of ‘TPO euphoria’ right now. We expect TPO pricing to rise 10–12% in the coming months due to tax equity and FEOC concerns, narrowing the gap between TPO and loan monthly payments.” - Mike Gilroy, Sungage Financial
5. Is the homeowner tax credit affected by the “foreign entity of concern” (FEOC) rules?
Not for homeowners—FEOC restrictions only apply to commercial credits under Section 48E like leases and PPAs.
6. Can homeowners claim the tax credit for battery storage with or without a PV system being installed?
Yes, but only if the battery is operational by December 31, 2025. After that date, the section 25D credit is no longer available for standalone or paired storage.
Pro Tip: “Start diversifying your revenue streams and building referral networks now, before customer acquisition becomes significantly harder post-25D.” - Erik Holvik, EnergySage
7. Can the unused solar tax credit be rolled over to the next year?
OBBB did not change the carry‑forward rule. Any excess credit from the 2025 return can still offset future tax liability.
8. Can the full 30% tax credit be claimed in 2025 if the system is installed and operational in 2025, but part of the payment is made in 2026?
Yes. If the system is installed and operational in 2025, you can claim the full 30% 25D credit on your 2025 return even if part of the invoice isn’t paid until 2026. That’s because the tax code treats the expenditure as “paid” when installation is completed, not when the last dollar changes hands. So as long as the project is installed in 2025, the IRS deems the costs “paid” in 2025 for credit purposes—even if you settle part of the bill in 2026.
Pro tip: “I can see a future where funding tied to federal tax credits—with all the strings attached—may cost more than simpler options that skip the strings and focus on system ownership.” - David Dunlap, BayWa r. e.
9. Can homeowners claim tax credits for other energy efficiency improvements under 25C?
25C now sunsets for projects placed in service after December 31, 2025. Homeowners must complete work this year to capture the credit. These include heat pumps, windows, insulation, and electrical panel upgrades.
10. Is there a tax credit for EV charger installations and when does it expire?
Yes. The OBBB leaves 30C untouched until June 30, 2026. Homeowners can claim up to $1,000 for qualifying Level 2 chargers installed before that cut‑off.
RELATED: I'm selling batteries, but why are my customers all asking me about the Ford Lightning?
48E Leases and PPA questions
This pertains to tax-credits that companies offering Leases and PPA are able to claim.
1. Is the tax credit still available for solar leases, traditional power purchase agreements (PPAs), and pre-paid PPAs
Yes. All third‑party ownership (TPO) structures—leases, operating PPAs, and pre‑paid PPAs—remain eligible under Section 48E as long they meet the deadlines and FEOC restrictions (see question 6 below). In general, solar projects must be placed in service by December 31, 2027 to claim the 30% credit. Projects placed in service after 2027 may still qualify under safe harbor provisions if construction begins before July 4, 2026.
2. What are the specific dates to pay attention to for 48E eligible systems with respect to safe harboring, commence construction and placed in service?
July 4, 2026 - If the project has either incurred at least 5 % of total cost or started substantial work (on‑site or qualifying off‑site fabrication) by this date, the TPO/tax equity partner is eligible for the 30 % credit and has up to four years to finish under the current IRS safe harbor provisions. (See question 9 on the July 7th executive order on how this could change.)
December 31, 2027 - Any project begun after July 4, 2026 must be fully installed, interconnected, and placed in service by December 31, 2027 or it receives no ITC at all.
Pro Tip: “Installers who diversify with offerings like TPO, roofing, and HVAC will be better positioned to weather the near-term slowdown as OBBB changes take hold.” - Zoe Gaston, Wood Mackenzie
3. Will solar lease and PPA customers still benefit from the federal tax credit?
Yes—indirectly. The TPO provider claims the credit and uses it to lower system pricing, which reduces monthly lease or PPA payments. That said, how much of the credit is passed along to customers depends on the financier’s business model and market pressures.
4. Can third-party owners claim the tax credit for battery storage systems?
Yes. Stand‑alone or paired storage remains eligible with a phase‑down starting in 2034. Projects must begin construction before the end of 2033 to qualify for the full 30% credit, end of 2034 for 22% credit, or end of 2035 for 15% credit. Storage projects that begin construction after December 31, 2035 will no longer be eligible.
Pro Tip: “Get comfortable installing storage and educating homeowners on its value. Local incentives and VPP programs will continue to rapidly expand, leading to higher ROI.” - Rohan Humphrey, Ohm Analytics
5. Will the Approved Vendor Lists (AVLs) be affected by FEOC Order 2023? When does this take effect?
Yes, beginning in 2026. Therefore expect every major third‑party financier to tighten its AVL over the next two quarters. The OBBB’s new Foreign Entity of Concern (FEOC) rules deny the 48E credit if a project uses “material assistance” from a prohibited entity or if too much of a system’s value comes from FEOC‑linked components, and the thresholds tighten each year. Third‑party financiers are responsible for proving FEOC and domestic‑content compliance to the IRS, and they’ll update their AVLs to keep every project credit‑eligible. An installer’s job: stick to the approved equipment list and hit the build schedule.
Pro tip: "Installers need a strong grasp of their supply chain as FEOC/domestic‑content plans unfold over the next 3–6 months. Avoid large equipment buys on partial info and lean on trusted finance partners for guidance." - Ryan Barnett, Palmetto
6. If I structure a deal with a “free solar PV system” and charge for storage at a markup—does that still qualify for the tax credit?
NO. Don’t even think about it. Only the battery portion qualifies, and any markup must reflect fair-market value. Inflating the battery price to cover “free” solar is considered basis-shifting—IRS rules limit the credit to actual costs and can deny the full credit if the markup is excessive. Most TPO financiers also benchmark pricing against their AVL, so overpriced batteries will be flagged and rejected before funding.
Pro Tip: “Choose WISELY who you partner with. One claw back can wipe out the profit from 10 other projects.” - Robyn Kenkel, Enfin
7. Are the bonus credits from the IRA still available under 48E?
Yes—all bonus credits from the IRA remain in effect, including for domestic content, energy communities, low-income projects, and prevailing wage for 48E projects under the OBBB; they’re simply available on the same accelerated schedule as the underlying 48E credit for solar.
8. Can TPO providers still transfer (sell) the 48E tax credit, and does that impact installers?
Yes. Transferability is still allowed under OBBB, and most TPO financiers will continue selling the credit. This doesn’t change how installers operate day to day, but it does raise the stakes for accurate cost basis, documentation, and meeting FEOC/PWA rules. In practice, your financier will handle the transfer; your role is to deliver a compliant install, follow the AVL, and submit compliant documentation promptly so nothing falls apart in tax due diligence.
9. Isn’t there an executive order that could change all of this?
Yes but the July 7th executive order only directed Treasury to revisit safe‑harbor definitions and FEOC criteria. Expect clarifications to come in the next few months, especially around what qualifies as “begin construction” and how content is certified. Bottom line: follow your TPO financier’s updated AVL and guidance.
Conclusion
The One Big Beautiful Bill reshapes residential solar, but the playbook is clear:
- Finish homeowner installs in 2025 to capture Section 25D.
- Follow your TPO’s AVL and documentation requirements to keep Section 48E viable.
- Lean into storage—the ROI is improving with local incentives and VPPs.
- Diversify offerings and financing partners to stay resilient as markets and rules evolve.
Want help keeping projects on schedule and customers informed? Bodhi automates milestone updates, documentation requests, and post‑install engagement—so you hit every deadline, protect every credit for your customers, and keep your solar business humming. Talk to Bodhi.
.webp)
.webp)
.webp)
.webp)