On July 4, 2025, the President signed the One Big Beautiful Bill Act into law—a far-reaching piece of legislation that reshapes the clean energy landscape. Among its many provisions, the Act begins the phase-out of the federal Investment Tax Credit (ITC) for solar and wind energy projects. Just days later, Executive Order #14315 directed the U.S. Treasury to publish detailed guidance on how the ITC will wind down, including definitions of key terms like “Start of Construction,” “Safe Harbor,” and new limitations on equipment sourced from Foreign Entities of Concern (FEOC).
This represents a significant change—but it’s certainly NOT the end of solar. Far from it.
ITC Is Still Available—and Extremely Valuable
Solar projects currently qualify for 30% federal tax credit—or 40% in designated Energy Communities. Under the new law:
- Projects that start construction before July 4, 2026 have four years to be placed in service to qualify.
- Projects that begin construction after July 4, 2026 must be placed in service by December 31, 2027 to qualify.
This creates a valuable window for businesses and building owners to take advantage of the ITC while it’s still available.
Commercial-scale rooftop solar projects take 6 to 9 months to develop, including system design, interconnection, and permitting. Installation adds another 1 to 3 months. Existing “Safe Harbor” provisions allow an alternative to starting physical construction, with a 5% spend test and continuous development activities to demonstrate the project is proceeding. For projects that may not make the ‘start of construction’ and corresponding ‘placed-in-service’ deadlines, Safe Harbor may preserve the ITC value.
Plus, Bonus Depreciation is back. Businesses can deduct 100% of a project’s depreciable basis in the first year, reducing the payback period for system purchases.
The Bigger Picture: Rising Costs, Strong State Support
Two forces will continue to drive the value of solar—regardless of changes at the federal level: the rising cost of grid-delivered electricity and strong state incentive programs.
Rising Cost of Grid-Delivered Electricity
Electricity prices are expected to rise as power plants burn more fuels and utilities make major infrastructure upgrades—costs ultimately passed on to ratepayers. Fortunately, behind-the-meter solar provides a unique hedge, helping businesses, schools, and municipalities manage long-term energy expenses and reduce exposure to future rate hikes.
Strong State Incentive Programs
Many states offer generous financial support for solar. Massachusetts’ SMART 3.0, Rhode Island’s Renewable Energy Growth (REG) Program, and New York’s NY-Sun are examples of reliable, well-structured programs designed to accelerate adoption—even when federal benefits are gone.
What’s Next?
Solect Energy will share updates when Treasury releases guidance, likely by late August. In the meantime, if your building or portfolio of properties is a good candidate for solar, consider looking more closely to understand the potential financial benefits. Solar remains one of the smartest energy investments available.
We believe in the long-term value of solar—and we’re here to help you make the most of it.
July 22, 2025