What Does H.R.1’s Sudden End to Clean Energy Tax Credits Mean for You and the Industry?
In July 2025, a sweeping and controversial piece of legislation—H.R.1, formally titled the "One Big Beautiful Bill Act"—was signed into law by President Trump. Among its many provisions, perhaps none has sparked more debate than its sudden repeal of the clean energy tax credits originally introduced under the Inflation Reduction Act (IRA) of 2022.
This move abruptly accelerates the timeline for ending federal incentives that supported solar power installations, electric vehicles, energy-efficient home upgrades, and more. The consequences will ripple across homeowners, clean energy companies, and the broader economy.
At Energy Advantage Roofing and Solar, we understand how disruptive this change can be for families and businesses weighing the switch to solar. In this article, we dive deep into what this means, who it affects, and what you can do if you’re considering going solar or buying an EV.
Clean Energy Tax Credits: What’s Being Cut?
The Inflation Reduction Act of 2022 introduced a host of tax credits to encourage adoption of clean energy technologies and reduce greenhouse gas emissions. The most impactful of these included:
30% Residential Clean Energy Credit (25D): For rooftop solar, battery storage, geothermal systems, and more.
Electric Vehicle Credits: Up to $7,500 for new EVs and $4,000 for used ones, provided they met domestic production and mineral sourcing requirements.
Home Efficiency and Electrification Credits (25C and 45L): For insulation, HVAC upgrades, heat pumps, induction stoves, etc.
Commercial Clean Energy Investment and Production Credits (45X, 48C): Supporting manufacturers and developers of clean power infrastructure.
Under H.R.1, most of these credits will now end on December 31, 2025—up to seven years earlier than originally planned. Even worse, some programs like EV tax credits are set to expire even sooner, by September 30, 2025.
The Timing Trap: Why 2025 Is a Hard Deadline
Previously, homeowners could claim tax credits based on when their system was placed in service. Under H.R.1, eligibility now depends on when money is spent. This means:
You must sign contracts and make significant payments before the end of 2025.
If your system is installed in 2026, you can still qualify if you prepaid in 2025.
Delays in permitting or installation could cost you thousands if they push project completion past the cutoff date.
Given that rooftop solar installations often take 60 to 90 days or more—from consultation to inspection to utility approval—this is an urgent issue. With installer demand surging, homeowners must act by fall 2025 at the latest to ensure qualification.
How Will the End of Clean Energy Tax Credits Financially Impact Households?
For many households, clean energy tax credits have been a key factor in deciding whether to invest in sustainable technologies.
Example: Rooftop Solar
A typical home solar system costs $20,000–$30,000.
With the 30% federal credit, homeowners save $6,000–$9,000.
Without the credit, the payback period for solar rises from 7–10 years to 15–20 years in some regions, dramatically reducing the financial appeal.
Example: Home Battery Storage
A Tesla Powerwall costs roughly $10,000–$12,000 installed.
The 30% tax credit saves $3,000–$3,600.
Without incentives, fewer homeowners will invest in battery systems, potentially increasing grid stress during outages or peak demand.
Example: Heat Pumps and Energy Efficiency
Upgrading to an electric heat pump could cost $15,000 or more.
With IRA tax credits and rebates, the out-of-pocket cost could drop to $5,000–$8,000.
H.R.1 removes these rebates and credits, disincentivizing electrification in older homes.
For lower- and middle-income families especially, these credits often made clean energy financially feasible. Without them, many will delay or cancel planned upgrades.
Will the Industry Slow Down Without Tax Credits?
Beyond individual households, H.R.1’s repeal of clean energy credits threatens to stall a fast-growing sector of the U.S. economy.
Job Losses
According to the Solar Energy Industries Association (SEIA), the clean energy sector supported over 263,000 jobs in 2024, with significant growth projected under the IRA. With H.R.1 reversing course:
Job losses in installation, sales, and manufacturing are likely.
Small businesses that specialize in solar, batteries, or energy audits may close.
States like Texas, Florida, and Arizona—with robust solar growth—could be hit hardest.
Investment Cuts
A 2024 report from BloombergNEF projected that the IRA would spur over $1 trillion in private investment in renewable infrastructure through 2035. H.R.1 threatens to derail that, including:
$263 billion in solar/wind project pipelines
$110 billion in U.S. manufacturing commitments
Reduced confidence from international and domestic investors
This could lead to higher energy costs for all Americans over time, as the pace of decarbonization slows and utilities rely more on fossil fuels.
What Are the Environmental Consequences of Ending Clean Energy Tax Credits?
The IRA was expected to help cut U.S. emissions by 40% below 2005 levels by 2030. H.R.1 reverses much of this progress.
Rooftop solar adoption will slow, especially in suburban areas where state-level incentives are weak.
Electric vehicle purchases will plateau as credits expire and prices remain high.
Carbon emissions from residential heating, transportation, and power will rise in the late 2020s.
This shift undermines the U.S.’s commitments under the Paris Agreement and could hurt global efforts to combat climate change.
Policy Landscape and Public Pushback
H.R.1 passed the Republican-led House and narrowly cleared the Senate. Critics argue it prioritizes fossil fuels and corporate interests at the expense of middle-class families and long-term sustainability.
The bill also includes provisions expanding drilling leases and fast-tracking fossil fuel infrastructure.
Environmental advocates and clean tech companies are lobbying for restoration of at least some credits in future legislation.
Public support remains strong: A 2025 Pew survey found that 68% of Americans favor tax credits for solar and EVs, regardless of political affiliation.
Some lawmakers are already proposing “bridge bills” to extend key credits beyond 2025. However, progress will depend heavily on the 2026 congressional makeup and the outcome of the next presidential election.
What You Should Do Now (Before December 31, 2025)?
If you’re considering clean energy upgrades, you still have time, but you must act fast. Here are your next steps:
1. Schedule a Consultation ASAP
Solar, HVAC, and battery contractors are receiving record inquiries. Delays of several weeks are common. Reach out early to get a quote and begin design/permit work.
2. Finalize Your Contract Before Q4 2025
Installers recommend locking in your contract—and ideally making a substantial payment—before October 2025 to avoid holiday season bottlenecks.
3. Keep Clear Records
Save your invoices, signed contracts, and payment confirmations. These documents are essential for claiming your tax credit in 2026.
4. Use Trusted Installers
As incentives disappear, some newer or unstable companies may exit the industry. Work with established installers with good reputations and clear warranties.
5. Consult a Tax Advisor
Confirm your eligibility and strategy for claiming 2025 credits. Some payments (even deposits) may qualify—but consult a professional.
Alternatives After the Federal Credits Expire
Once the federal incentives expire, homeowners may still benefit from:
State and utility rebates (varies by region)
Net metering programs (where utilities buy back excess solar power)
PACE financing or green loans to reduce upfront costs
Community solar subscriptions for renters or apartment dwellers
However, these options are typically less generous and less predictable than federal tax credits.
Conclusion: A Pivotal Moment for Clean Energy in America
The repeal of clean energy tax credits under H.R.1 marks a pivotal shift in national energy policy. While the Inflation Reduction Act represented the boldest climate investment in U.S. history, this reversal casts uncertainty over the future of solar power, electric vehicles, and household electrification. At Energy Advantage Roofing and Solar, we’re urging homeowners to recognize that there’s still a brief window—through the end of 2025—to take advantage of powerful incentives that can save thousands of dollars and reduce carbon emissions for decades to come. But time is running out. If you’ve been waiting to go solar, install battery backup, or switch to cleaner appliances, the message is clear: act now—because these credits won’t be around much longer.
FAQs
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Major incentives winding down include the 30% Residential Clean Energy Credit (solar, battery storage), the Energy-Efficient Home Improvement Credit (insulation, heat pumps, windows), and both new and used EV tax credits. These all expire by December 31, 2025, though EV credits may be eliminated as early as September 30, 2025
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It's unclear. Under prior IRA rules, unused credits could be rolled over to future tax years—but H.R. 1 may change that. Experts and advocacy groups are still waiting on IRS guidance for definitive answers.
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H.R. 1 prohibits tax credit eligibility for projects receiving material assistance from “prohibited foreign entities.” Targets include Chinese, Iranian, Russian, or North Korean companies. For solar and wind projects starting after 2025, a cost‑ratio threshold applies—forcing companies to source a majority of labor and material domestically to qualify.
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To claim investment (ITC) or production credits (PTC), wind and solar facilities must begin construction by July 4, 2026, and be placed into service by December 31, 2027, to qualify under the accelerated phase-out schedule
