Vanishing Renewable Energy Tax Credits Will Effect Indiana
The past several weeks, the House and Senate have been working on reconciliation legislation that is suppose to balance the U.S. budget. One of the things Trump wanted to make sure disappeared from governmental support was the renewable energy sector. Senators and Representatives granted his wish, even though “red” states would be hurt most by the disappearance of tax credits. Below is a rundown of what we know so far about this new legislation, known as the Big, Beautiful Bill.
Residential Tax Credits – Section 25D
The residential renewable energy tax credits for customer-owned systems, known as Incentive Tax Credit, will expire at the end of 2025. All residential projects must be completed and energized by December 31, 2025 in order to utilize the credit. Moving forward this means systems will likely only be affordable for the wealthier population.
Commercial Credits – Section 48E/45Y
Commercial energy tax credits will also be phasing out over the next couple of years. All projects must begin construction within 12 months of the bill signing. Further, the projects must be completed and put into service by December 31, 2027 to remain eligible for the full Incentive Tax Credit. Safe-harboring will no longer protect commercial clients from losing the credits. Also, projects that start construction after December 31, 2025 will not qualify for the renewable energy tax credit if any content originates in China. Rules restricting content from China are still being clarified, but since many U.S.-made components often still use some Chinese components in their process, it may be difficult to find qualifying products throughout a project.
If you are a customer who would like to install solar on your home before the end of 2025, we recommend that you sign a contract with the installer of your choice ASAP, certainly before August 1st. Many installers are going to see an uptick in customers and installation schedules will fill up fast.
Commercial clients should also work diligently to get projects firmed up and scheduled. Since commercial projects are larger and more comprehensive, permitting and interconnection can take longer. Components for these types of installations also tend to carry longer lead times for delivery.
GAI Energy will work with all our customers to make sure we can get installations defined and installed as quickly as possible to meet the new ITC deadlines. Call today for a consultation: 765-480-4138.
