Lock in the Federal Solar Tax Credit Before It’s Gone
The 30% Solar Tax Credit Is Expiring. The Best Time to Go Solar Is Now.
The federal government is phasing out the 30% solar investment tax credit. This valuable credit has already expired for residential homeowners, but there’s still time for businesses and farmers to receive it. To qualify, they must meet new critical deadlines to get their projects online over the next four years.
That means there has never been a better time to go solar than now.
Don’t miss the chance to save thousands of dollars on your solar energy system! Contact 1 Source Solar today to see how you can lock in your savings.
The Clock Is Ticking: Get a Free, No-Obligation Quote Today!
What You Need To Know About the Expiring Solar Tax Credits:
For Commercial Businesses & Ag Producers:
- Projects that start between now and July 3, 2026, must be placed in service by Dec. 31, 2030.
- Projects started AFTER that date must be placed in service two years sooner — by Dec. 31, 2027.
- TAKE ACTION: Early planning is key to meeting these deadlines. Contact us to plan your project now.
For Tax-Exempt Organizations
- The 30% federal direct pay that’s currently available to nonprofits, municipalities, schools, and other tax-exempt organizations follows the same deadlines as the tax credit.
- Learn more about the critical deadlines for nonprofits.
For Residential Homeowners:
- Residential tax credits ended Dec. 31 of 2025. Residential systems needed to be installed and “placed in service” by this deadline to qualify.
- While the tax credit is no longer available, solar still provides many financial benefits to homeowners. These include more control over energy usage, higher home values, and reduced environmental impact.
- If you are a residential homeowner considering solar, please contact us to talk more about other tax incentives your project may qualify for.
Understanding the New Foreign Entity of Concern (FEOC) Guidelines
Solar projects are now subject to new Foreign Entity of Concern (FEOC) provisions to receive the 30% credit. These provisions have placed tighter restrictions on materials sourced from certain countries.
Projects contracted after July 3, 2026, will face additional FEOC restrictions, which will likely cause more supply chain and component cost issues.
As an experienced solar EPC (engineering, procurement, and construction) firm, 1 Source Solar uses a vetted supply chain to make sure our components meet these guidelines. We will work with you to ensure your materials qualify for the credit.
Meet the July 3 Safe Harbor Deadline for the Best Chance of Savings
Due to the longer deadline, starting your project before July 3, 2026, will give you the best chance of receiving the tax credit. Beginning construction by this date will ensure you meet the “safe harbor” window to complete construction by 2030.
You can signify the start of your project by this date in one of two ways:
Begin Construction (Physical Work Test)
If physical work begins on the project before July 3, the project qualifies for the later deadline. This type of work could include digging the foundation, installing racking, or other initial construction activities. After this date, construction must remain “continuous” in nature to ensure you qualify for the tax credit.
Paying 5% of the Cost (5% Safe Harbor)
You can also establish the start of construction by paying or incurring at least 5% of the project’s total cost. However, this only applies to projects with a net output of 1.5 megawatts or less. Those with a higher capacity will need to meet the physical work test to qualify.
The 1 Source Solar team will ensure that we discuss the best timeline for your project in the early stages to give you the best chance of receiving the tax credit.
The Financial Impact: Understanding the 30% Solar Tax Credit
Federal legislation, signed last summer (July 4, 2025), is ending the federal solar tax credit for solar energy projects over the next four years.
While there are other incentives available for installing solar, the federal tax credit has been the largest and most impactful for homeowners, businesses, farmers, and others for years. It provides a dollar-for-dollar credit of 30% of the cost of the following from taxes:
- New solar panel systems
- Energy storage devices
- Installation expenses
For a business installing a $100,000 commercial solar system, missing the tax credit deadline would mean losing $30,000 in tax credits. That’s a direct, significant increase in your net cost.
There’s Still Time To Get These Benefits. Here’s How 1 Source Solar Can Help.
1 Source Solar is a turnkey solar installation company that handles your project from planning to construction to maintenance. We install solar panels for all types of customers across the Midwest.
We know your project needs to be placed in service quickly. That’s why reaching out to us as soon as possible is the best way to see how we can get your project placed in service by the time it’s needed.
Our experts know how to work efficiently to ensure we design the right solar panel system for you while streamlining the process.
Important Note: Our team will do everything within our power to complete your solar projects as fast as possible and help you capture your full benefits. However, due to several factors out of our control during the installation process, it’s important to note that we cannot guarantee completion to meet the defined federal tax deadlines. Please contact a tax adviser for the best financial guidance.