The Solar Investment Tax Credit (ITC) Is Under Threat:

What You Need to Know and How to Take Action

The Solar Investment Tax Credit (ITC) Is Under Threat — Here’s What to Do

The Solar Investment Tax Credit (ITC) has been a cornerstone policy driving solar energy growth since 2006 by making solar more affordable and creating hundreds of thousands of jobs.

But now, it’s at risk.

The newly introduced H.R. 1 (2025–2026), nicknamed the “One Big Beautiful Bill Act”, includes provisions that could severely weaken or eliminate the ITC—both for homeowners (Section 25D) and for commercial/third-party-owned systems (Section 48E). Here's what you need to know, why it matters, and how you can help protect it.

Solar panels on a residential home

What is the Solar Investment Tax Credit (ITC)?

The ITC allows homeowners and businesses to deduct a percentage of their solar photovoltaic (PV) system costs from federal taxes:

  • Section 25D offers a 30% credit for residential solar systems installed between 2022–2032.[1]
  • Section 48E applies the same rate to commercial projects and third-party-owned systems.

Since its enactment, the ITC has enabled a dramatic rise in solar adoption—up more than 200×—and has supported the creation of hundreds of thousands of U.S. solar jobs.[2]

Potential of rising solar energy costs

How H.R.1 (2025), the "One Big Beautiful Bill Act", Threatens the ITC

H.R. 1, introduced in May 2025, serves as a comprehensive tax reform and reconciliation bill.[3] However, it also:

  • Phases out or eliminates Section 25D for residential solar.
  • Caps and reduces Section 48E for commercial and leased systems.
  • Strips bonus credits for domestic content, low-income, and energy community projects.
  • Redirects funding from clean energy back to fossil fuel sectors.[4]

Passed narrowly in the House (215–214) on May 22nd[5], this bill could raise solar costs, stall growth, cut jobs, and threaten clean energy goals.

The Big Beautiful Act threatens solar energy in California

Why This Matters—Especially in California

California leads the nation with over 248 GW of installed solar capacity, enough to power 41 million homes.[6] But H.R. 1 could:

  • Increase installation costs, making solar less accessible.
  • Reduce deployment, slowing progress toward climate goals.
  • Threaten thousands of state solar jobs and related investments.
  • Hike energy costs, as seen in projections showing utility bills potentially rising 7–8%.[7]
Contact your representatives

What You Can Do: Take Action Now

1. Contact Your Representatives

Tell your local Representatives to Oppose H.R. 1 and protect the ITC.

If you live in a Republican Congressional District, find your local Representative HERE and call the number provided using the following script provided by CALSSA:

“Hi! My name is _____ and I live in _____ (CITY/TOWN) and am a constituent of Representative _____. I am calling to urge the Congressman/woman to support improvements to the solar investment tax credits when the budget reconciliation bill returns to the House. These credits support good-paying local jobs, help families reduce their energy bills, and keep America energy independent. Cutting them would hurt small businesses, homeowners, and workers in our state—all while doing little to reduce the deficit. Thank you!”

2. Spread the Word Online

Social media is a powerful force in swaying public policy. A single share can inform hundreds—or even thousands—about the threat to the ITC and inspire action. By commenting, sharing, and tagging representatives, you create visible public pressure.

📲 Follow us and share our post explaining how the ITC benefits you, your neighbors, and local businesses—and how H.R. 1 puts it all at risk. Every share, comment, and tag adds momentum. Let’s keep solar front and center in this debate.

3. Support Solar Advocacy Groups

Join forces with groups like CALSSA, the AMICUS Solar Collective, and SEIA. They are actively lobbying to preserve solar tax credits and clean energy funding. Donate, volunteer, or simply subscribe to their updates to stay informed and engaged.

The Stakes are High

The ITC has powered solar’s rise—from rooftop systems to utility-scale installations—and supported sustainable economic growth, clean air, and energy independence.

  • If H.R. 1 passes:
  • Solar becomes more expensive.
  • Projects are delayed or cancelled.
  • Jobs are jeopardized.
  • Renewable energy leadership shifts away from the U.S.

We’re Here to Help

At Alternative Energy Systems (AES), our mission is to guide you through the solar buying process, including informing you about the incentives and policy changes that will directly affect you. We’re here to answer your questions and help you act before it’s too late.

Click Here to get started or call us today at (530) 345-6980 to learn how to lock in your solar benefits and support California’s clean energy future.