If you’ve been thinking about switching to solar, now’s the time to act. Thanks to the federal solar Investment Tax Credit (ITC), homeowners can currently claim 30% of their total solar installation costs back on their taxes. But that benefit may not last.
In May 2025, lawmakers introduced a new proposal that could eliminate the 30% solar tax credit as part of a larger rollback of clean energy incentives. While no final decisions have been made yet, there’s a real risk that this major savings opportunity could vanish before the decade is out.
In this post, we’ll break down everything you need to know about the solar tax credit in 2025, what’s changing, and how you can still lock in major savings by going solar now.
What Is the Solar Investment Tax Credit?
The federal solar tax credit — officially called the Investment Tax Credit (ITC) — lets homeowners deduct 30% of the cost of their solar panel installation from their federal taxes. This credit applies to both residential and commercial systems and covers a wide range of expenses, including:
- Solar panels and inverters
- Mounting equipment and wiring
- Labor costs for on-site prep and installation
- Permitting, inspection, and design fees
- Battery storage (3 kWh or greater)
For example, if you install a $20,000 system on your home in Kansas City, you could receive a $6,000 credit when you file your taxes. And because the credit has no maximum cap, even larger installations can benefit.
What’s Changing in 2025?
On May 13, 2025, the House Ways and Means Committee introduced a draft budget that includes a proposal to eliminate the 30% residential ITC. This is part of a broader push to reduce funding for clean energy programs initiated by the Inflation Reduction Act (IRA).
If passed, the bill would:
- End the 30% tax credit for residential solar
- Begin phasing out other clean energy incentives
- Reduce financial benefits for homeowners considering solar
The proposal is still under review and has not yet become law, but it marks a significant threat to Kansas City solar energy efforts and solar incentives nationwide. The credit is currently scheduled to step down gradually after 2032, but new legislation could cut it much sooner.
Can I Still Get the 30% Credit?
Yes — as of now, the 30% solar tax credit is still available for 2025. Congress has already allocated funding for this year, and many of the current administration’s proposals to pause or repeal clean energy initiatives are facing legal challenges.
In short: if you install solar this year, you are still eligible to claim the full credit. That’s why the best solar companies Kansas City Missouri homeowners trust are encouraging customers to act now, while incentives are guaranteed.
Who Qualifies for the Federal Solar Tax Credit?
To qualify, homeowners must meet a few simple requirements:
- You must own (not lease) your solar panel system
- The system must be installed in the U.S.
- It must be new, not used or refurbished
- You must owe federal income tax to claim the credit
And here’s some good news: if your tax bill isn’t large enough to use the full credit in one year, you can roll over the remaining amount to future tax years.
What Does the Solar Credit Not Cover?
While the ITC is generous, it doesn’t cover everything. Here’s what’s excluded:
- Tree removal or trimming
- Roof repairs or replacement
- Maintenance costs after installation
Also, if you install solar on a second home, you can only claim the credit for the portion of the year that you live there.
Why It Still Makes Sense to Go Solar in 2025
Even with uncertainty in Washington, installing solar in 2025 is a smart move for many Kansas City homeowners. Here’s why:
- Immediate savings: Cut installation costs by 30% with the tax credit
- Long-term savings: Reduce or eliminate your monthly energy bill
- Energy independence: Protect your home from rising utility rates
- Environmental benefits: Lower your carbon footprint and support cleaner energy
Solar panels also increase home value and are a top selling point for eco-conscious buyers. With many systems paying for themselves in under 10 years, the return on investment is hard to beat.
The Fight to Keep the Tax Credit Going
Industry leaders, including the Solar Energy Industries Association (SEIA), are urging Congress to preserve solar incentives. They’ve called on businesses and homeowners alike to speak up and support clean energy policies that benefit working families, not just corporations. And we’re in on the fight, too.
Here’s how you can help:
- Send an email to your members of Congress
- Join a local solar site tour with your elected official
- Write an op-ed supporting solar incentives in your community
Every voice matters when it comes to preserving programs that support affordable, clean energy.
Don’t Wait — The Time to Go Solar Is Now
Whether you’re just starting to explore solar energy or ready to get a quote, now is the time to act. The 30% federal solar tax credit is still active in 2025, but its future is uncertain.
If you’ve been searching for the best solar companies Kansas City Missouri or KCK has to offer, KC Solar is here to help. Contact us today to schedule a free consultation and receive your solar panel quotes. Discover why we’re the best solar company in Kansas City and how we can help you make the switch to clean, renewable energy with confidence.
We are a local company made up of KC natives with KC pride — in our city, and in our work. Which means we’ll always give you the best of ourselves.
Get in touch with us today. Act while you can.
And be sure to download our Free Solar Panel Buying Guide for more information.
We look forward to serving you!
