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Summary

The 30% federal Residential Clean Energy (Section 25D) tax credit ends after December 31, 2025 under the newly passed One Big Beautiful Bill Act (OBBBA). Crucially, experts say the test has shifted from “placed in service” to “expenditures made.” That means if you pay for your system in 2025, you can still lock in the 30% credit—even if it’s placed in service later. (“Placed in service” = fully installed and operational). This interpretation comes from tax specialists following OBBBA, including Bryen Alperin, partner & managing director at Foss & Company, quoted in pv magazine USA. 

The 30% credit is ending after 2025 — here’s what changed

The One Big Beautiful Bill Act accelerates the sunset of the residential solar credit (Section 25D) to expenditures made after Dec. 31, 2025. Prior to OBBBA, Section 25D (extended by the Inflation Reduction Act) was slated to remain at 30% for years. Now, homeowners have through 2025 to financially commit and lock in the incentive. 

“With respect to the end of Section 25D, experts agree that the determination of whether a homeowner qualifies has shifted from the previous ‘placed in service’ test to the bill’s new ‘expenditures made’ test. ‘If the homeowner pays for the installation in 2025, they could lock in the credit, even if the system is placed in service later,’ said Bryen Alperin, partner and managing director at Foss & Company.” pv magazine USA

Multiple reputable outlets—including Reuters and NAHB—are reporting that the 30% residential credit ends after 2025, creating a surge of urgency for homeowners. 

What qualifies for the 30% credit (Section 25D)

If you make your qualifying expenditures in 2025, you can claim 30% of eligible project costs, including:

• Solar panels, inverters, racking, balance-of-system equipment

• Battery storage (≥3 kWh capacity)

• Labor, permitting, and certain interconnection costs
  There’s no dollar cap on the 25D credit. Rewiring America Homes

Key timelines & scenarios

1) You sign and pay (fully or per contract terms) in 2025, system is placed in service in 2026

• You can still qualify for the 30% credit under the “expenditures made” test, per expert interpretation cited above.

2) You wait until 2026 to pay

• You will not qualify for the 30% residential credit if OBBBA’s changes stand.

3) You installed solar previously and already claimed 25D

• You can still claim it again for new qualifying expenditures made before Dec. 31, 2025 (e.g., adding batteries).

How to actually claim it

1. Go solar (or add batteries) and make your qualifying expenditures in 2025.

2. Keep all invoices and proof of payment.

3. File IRS Form 5695 with your 2025 taxes to claim the Residential Clean Energy Credit (Section 25D). (Consult your tax advisor.) 

Why act now (especially in the USVI)

• Utility rates are high and volatile; solar + storage hedges your long-term costs.

• Supply chain + installer capacity crunch: Expect a 2025 rush. Locking contracts and payments in now can secure both hardware availability and the tax credit. 

FAQs

Is the 30% credit really going away after 2025?
Yes, for residential (Section 25D) expenditures made after Dec. 31, 2025, under OBBBA. That’s the consensus from PV Magazine USA, Reuters, EnergySage, and industry/legal experts.

Do I have to be fully installed by 12/31/2025?
Under the old rule, “placed in service” was the key. Under OBBBA, experts now point to “expenditures made” as the qualifying standard. Paying in 2025 may lock in your credit even if the system is placed in service later—but consult your tax advisor to align with your specific contract and payment structure. 

What about commercial solar?
Different rules apply (Section 48/48E). Some projects can still qualify beyond 2025 depending on start-of-construction and placed-in-service timing, among other factors. Talk to a tax professional. 

Call to Action

Ready to lock in your 30%?
Irie Solar can help you:

• Structure your contract so qualifying expenditures are made in 2025.

• Design the right system (solar + battery) for your home or business

• Provide documentation you and your tax pro need to file Form 5695

Book your free consult now → Contact Us Today

Phone: 340-209-2916
Email: service@iriesolarvi.com
Website: www.iriesolarvi.com
Facebook: facebook.com/iriesolarvi

Sources

• pv magazine USA – What do the changes in the One Big Beautiful Bill Act mean for residential solar companies? (includes the Bryen Alperin quote). pv magazine USA

• Reuters – U.S. rooftop solar companies say Republican House bill would be a major setback. Reuters

• EnergySage – Congress passes bill ending residential solar tax credit / Federal Solar Tax Credit in 2025: How does it work?. EnergySageEnergySage

• NAHB – Expiring energy tax credits: Section 25D changes under OBBBA. nahb.org

• Rewiring America – Federal 25D rooftop solar tax credit explainer. Rewiring America Homes

• Greenlancer / 8MSolar – Industry explainers on the 2025 deadline. GreenLancer8MSolar