What the End of the Solar Tax Credit Means for Your Investment

by | Jul 30, 2025 | Blog, Solar

Rooftop Solar

What the Solar Tax Credit Means for Small and Mid-Sized Business Rooftop Solar

If your business is considering rooftop solar, the Investment Tax Credit (ITC) under Section 48E is one of the most important incentives you need to know about. For nearly two decades, it has been lowering upfront costs and accelerating payback for commercial solar projects.

But the rules have changed, and there’s now a firm expiration date for new projects. Here’s what you need to know.

Solar Tax Credit

The Current Solar Tax Credit for Businesses

  • For systems under 1 MW AC, businesses can claim a 30% federal tax credit on eligible solar project costs.
  • Unlike larger projects, sub-1 MW systems are exempt from prevailing wage and apprenticeship rules — making compliance simpler and the economics clearer.
  • Key deadline: all eligible projects must be placed in service by December 31, 2027 to qualify for the credit. After that, the federal incentive ends.

Why Rooftop Projects Are Well Positioned

Rooftop solar projects are typically sized well under 1 MW AC, making them ideal for the current ITC rules. They benefit from:

  • Full 30% credit with no additional labor requirements
  • Predictable installation timelines that fit comfortably within the 2027 deadline
  • Strong economics as energy costs continue to rise

Benefits Beyond the ITC

Even with a fixed end date, rooftop solar offers long-lasting advantages:

  • Lower utility bills and operating costs
  • Hedge against utility rate volatility
  • Improved ESG and sustainability profile
  • Energy resilience when paired with battery storage

Standalone battery storage projects also qualify for a 30% ITC if installed before the same 2027 deadline.

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How to Maximize the Opportunity

1. Act Early

With the ITC set to end, demand is rising. Early planning helps lock in project schedules and pricing.

2. Leverage Local Incentives

State and utility programs like net metering or solar renewable energy credits (SRECs) can stack on top of the federal ITC.

3. Consider Financing Options

Power purchase agreements (PPAs), leases, and green loans allow many businesses to go solar with little upfront cost.

4. Evaluate Storage

Batteries can reduce demand charges and provide backup power, while also earning the 30% ITC.

Solar Tax Credit

Are There Still Benefits to Going Solar?

Absolutely. Even without the Solar Tax Credit, solar offers:

  • Reduced electricity bills

  • Increased property value

  • Protection against utility rate hikes

  • Energy independence

  • Environmental impact reduction

According to EnergySage, most businesses can still save hundreds of thousands of dollars over the lifetime of their systems—even without federal tax help.

How to Maximize Your Solar Investment Post-Tax Credit

1. Move Fast Before the Deadline

If you’re still in the research phase, you may want to lock in your installation before the tax credit expires. Many companies are already seeing a surge in demand, which could lead to scheduling delays.

➡️ Contact Colite Technologies today to secure your system before the credit ends.

2. Consider Battery Storage

Energy storage is becoming more affordable and powerful. Batteries can:

  • Store excess energy for nighttime use

  • Provide backup power during outages

  • Improve the economics of your solar system

Many storage systems are eligible for standalone tax credits or rebates.

Solar Tax Credit

Final Thoughts: Secure Your Investment While You Can

For rooftop systems under 1 MW AC, the rules are clear: install and place your project in service by December 31, 2027 to lock in the 30% federal tax credit. After that date, the incentive disappears. There is no phase down period, it falls off a cliff from 30% in 2027 to zero in 2028. Note that to ensure you meet the 2027 deadline it would be safe to start your project no later than 2026. This is a smart way to anticipate potential delays with permitting and interconnection and to avoid the mad rush that will ensue as the deadline get closer.

For businesses, this is a rare window of certainty in federal energy policy — and an opportunity to take control of energy costs before the deadline closes.

✅ Ready to plan your rooftop solar system? Contact Colite Technologies today to maximize your benefits while the ITC is still in place.

 

FAQs: Solar Tax Credit Changes

Q1: Can I still get the Solar Tax Credit in 2025?

Yes, but the future runway has been shortened. Commercial solar tax credits that were allowed under the previous law until 2032 will now disappear in 2028.

Q2: Does battery storage qualify for any tax credits?

Yes. Standalone and solar-tied battery storage qualifies for a 30% tax credit. This will continue even after the solar panel credit ends.

Q3: Will solar panels get cheaper to offset the credit loss?

Possibly, as technology advances. But demand may drive up costs in the short term, especially as people rush to install before the deadline.

Q4: What additional incentives are there to the Solar Tax Credit?

State rebates, net metering, SRECs, and green loans can all help make solar more affordable in the post-tax credit era.