The House passed the GOP’s sweeping tax, budget, and immigration bill—which includes a measure to eliminate the 30% residential solar tax credit (Section 25D of the U.S. Tax Code) by the end of this year—early Thursday morning. After initial arguments among key conservative members that the original bill draft didn’t do enough to reduce the deficit, the House negotiated changes that significantly impact both residential and commercial solar.
Changes to the bill’s language were released after 9 p.m. EST on Wednesday. While proposed cuts to Section 25D remain the same, the new bill text includes a provision to prohibit companies from claiming the commercial solar tax credit (Section 48E of the U.S. Tax Code) for third-party-owned systems on residential properties. The provision is potentially retroactive for all of 2025, which means any residential solar systems installed as part of a lease this year would not qualify for the tax credit, though this interpretation is under legal review. Residential systems purchased with cash or a loan and installed in 2025 would still be able to claim the tax credit under 25D.