Time Is Running Out to Maximize Solar Incentives for Your Business

If you are considering solar for your business, NOW is the time to act. The Big Beautiful Bill (which is now headed back to the House) includes significant reductions in tax credits for solar that could negatively impact future energy projects, if passed.

What Does This Mean for Your Business?

The 30% Commercial Solar Tax Credit Will Go Away

Currently, businesses can claim a 30% federal tax credit on commercial solar projects. Under the Senate’s latest bill, commercial solar projects that have already been planned, financed, and approved still qualify for the applicable tax credit, as long as they begin construction before June 2026 or are operational by the end of 2027. Projects may be “safe harbored” and may include materials that do not meet FEOC (Foreign Entity of Concern) requirements if construction begins by the end of 2025.

Other solar-related provisions in the Senate’s bill include:

• Residential leasing companies can receive the 30% Federal Tax Credit, or ITC (48E).
• Commercial solar projects that start construction less than 12 months after the bill’s enactment and are placed into service within four years can still claim the full ITC (48E) credit, as long as equipment meets FEOC requirements. (Equipment cannot include material from a prohibited foreign entity or Foreign Entity of Concern)
• 10% Domestic Content Adder is available:
  • Equipment must be 40% US Material if installed before 6/16/2025
  • Equipment must be 45% US Material if installed between 6/16/2025-12/31/2025
  • Equipment must be 50% US Material if installed after 1/1/2026
  • Equipment must be 55% US Material if installed after 1/1/2027

It is important to start planning your project NOW to have the best chance to qualify for the tax credit.

 

Tax Credits for Energy Storage Remain Intact

Looking at battery storage? You’re in luck. The 30% ITC for Energy Storage Systems (ESS) remains intact through 2033, making now a smart time to plan for solar + storage.

Batteries can help reduce your reliance on the grid during high-demand hours when energy rates are highest for Time of Use rate structures to allow your business to cut energy costs. Batteries can also reduce monthly utility bills by dumping their electrons into your facility during high power events during the day. The battery is then recharged during lower power usage hours, effectively reducing demand charges that the utilities add to your bill. This is called Peak Demand Shaving. Demand charges (based on instantaneous kilowatts of power) can be as expensive on some customer bills as the energy charges (based on kilowatt hours of energy), By combining on-site solar generation with battery storage, your business can strategically use solar power and stored energy to avoid drawing expensive electricity from the grid while also lowering its carbon footprint. Batteries improve energy stability and security by potentially keeping your business running when the grid goes down, if that is a design consideration.

Don’t Miss the Window of Opportunity

More changes may occur to the big beautiful bill during the legislative process, as the House works to pass the bill. But one thing is clear: Waiting puts your full incentive at risk.

Our team can help you:

• Analyze your site and utility data
• Design the optimal solar + storage solution
• Navigate safe harbor requirements
• Structure your financing to maximize available credits

Start the Solar Process NOW

Federal policy is shifting quickly. The 30% commercial solar tax credit may soon be a thing of the past. To ensure you don’t lose out, begin your solar project as soon as possible.

* This blog post has been updated to reflect changes made to the Senate’s budget reconciliation bill passed on July 1st. More changes may take place as the bill returns to the House.