If you’ve been thinking about installing solar panels for your home or business in Massachusetts, now’s the time to act.
President Trump officially signed the “One Big Beautiful Bill Act” (OBBBA) into law on July 4th, ushering in huge cuts to clean energy tax credits.
The law eliminates the 30% tax credit for residential solar panels at the end of 2025 and implements a fast-paced phase-out of commercial solar tax credits.
At My Generation Energy, we’re committed to helping homeowners and businesses on Cape Cod, the South Shore, the South Coast, and throughout the Greater Boston area take advantage of these savings while they’re still available, but the clock is ticking.
Here’s what you need to know.
What Is the Solar Tax Credit?
The solar tax credit is a government incentive that reduces the cost of solar panels. It’s been a key driver of solar adoption and clean energy growth in the United States for decades.
There are two versions of the credit, one for residential solar installations and another for commercial projects:
- Residential Clean Energy Credit (25D) – Reduces your federal income tax liability by 30% of your home solar and/or battery storage installation costs.
- Clean Energy Investment Tax Credit (48E) – Reduces a business’s federal income tax liability by 30% of their total solar project costs. Tax-exempt organizations can claim a direct payment of equal value.
How Are Solar Tax Credits Changing?
The new law doesn’t change how the solar tax credits work, but it significantly shortens the amount of time they’re available.
A few years back, in 2022, the Inflation Reduction Act laid out reasonable timeframes for both credits, with the residential solar tax credit expiring in 2035 and the commercial solar tax credit beginning its phase-out in 2033.
Now, those deadlines are shortened to less than a year for the residential tax credit and only slightly longer for the commercial version.
Here’s a closer look at what’s changing.
| Tax Credit | Who Qualifies? | Previous Law | Changes Under OBBBA |
| Residential Clean Energy Credit | Residential solar installations | 30% credit available until 2032. Percentage reductions from 2033-2035. Tax credit ends in 2035. | Now only available for purchases made by December 31, 2025. |
| Clean Energy Investment Tax Credit | Commercial solar projects | 30% credit available for projects beginning construction by 2033 or until the US power sector cuts emissions by 75% compared with 2022, whichever is later. | Now only available for projects that begin construction by July 4, 2026, and finish within 4 years, or are placed in service by Dec. 31, 2027. |
What Do These Changes Mean for You?
Cuts to clean energy tax incentives hurt everyone. Developers depend on these credits to build large-scale solar projects that reduce emissions and meet growing electricity demand. Without them, solar expansion will slow, raising energy costs and delaying climate progress.
You Need to Go Solar Soon to Claim Savings
Projects need to move quickly to qualify for federal tax credits. Residential systems must be completed by the end of 2025. Commercial installations have a little longer, but large-scale projects also take longer to complete. If you wait too long, you risk permitting and approval delays that could cause you to miss tax credit deadlines.
The Value of Solar Will Increase as Energy Costs Go Up
A lot of people wonder whether solar panels will still be worth it once the tax credits are gone. The answer is yes, solar will still be valuable.
Energy costs are already climbing, and the impacts of the OBBBA are expected to send them even higher. Experts expect costs to rise by $110 per household annually, with some states seeing even higher increases of $200 or more.
