Congress recently passed legislation to cut the 30% residential solar tax credit by December 31, 2025. This bill enhances state-level renewable energy incentives and strengthens Ohio’s solar future, but at a high cost: federal solar tax credits, formally known as the 25D Residential Clean Energy Credit, are set to disappear after 2025, leaving homeowners to face thousands of dollars in extra costs.
Right now, Ohio homeowners have a special window where state and federal incentives overlap to deliver historic savings on solar installations. But when the clock strikes midnight on December 31, 2025, homeowners who waited will be left paying far more for the same system.
In this blog, we break down how the newly passed federal bill cuts the 30% solar tax credit and what that means for Ohio homeowners. You'll learn what incentives are still available, how much you could lose by waiting, and why 2025 is your last, best chance to maximize solar savings in Ohio.
Latest Updates on the “Big Beautiful Bill” and What It Means for Homeowners
The recently signed Big Beautiful Bill has introduced major changes to federal solar incentives. Signed into law by President Trump on July 4, 2025, this legislation brings an end to the residential solar tax credit.
The most important change for homeowners:
- The 30% federal solar tax credit (Section 25D) for residential solar systems will officially end on December 31, 2025.
- To qualify, your solar system must be fully installed and operational by this deadline.
- After this date, homeowners will no longer be able to claim this credit on their personal tax returns.
The bill also clarified the following:
- Solar leases and power purchase agreements (PPAs) will still qualify for a 30% tax credit (claimed by the installer) through 2027, helping to reduce costs for homeowners who lease their systems.
- Battery storage systems installed through leases or as standalone projects will continue to qualify for a 30% credit through 2032.
- New restrictions will apply starting in 2028 for projects using components from companies controlled by foreign entities of concern, such as Chinese manufacturers.
The Bottom Line for Homeowners
If you’re considering solar, 2025 is the best and possibly last chance to maximize your savings. After this year, the 30% residential solar tax credit will be gone, leaving future projects significantly more expensive.
To secure your savings, schedule your solar installation well before the December 31, 2025 deadline. Installer capacity, permitting timelines, and weather delays could all impact your ability to meet this critical date.
Federal Solar Tax Credit Explained
For 2025, the federal government offers a 30% solar tax credit for solar panel systems installed and operational by December 31, 2025.
Let’s say, if you install solar panels on your home and turn them on before December 31, 2025, the federal government gives you back 30% of the total cost when you file your taxes. That means if your solar system costs $20,000, you could get $6,000 back as a tax credit.
When you combine this with Ohio's solar rebates, utility incentives, and other local programs, you could slash your total solar installation cost nearly in half.
The credit was supposed to last until 2034 under the Inflation Reduction Act, but it will abruptly end on January 1, 2026. This drastic change creates a rushed timeline that could cause significant market disruption.
If you’re thinking about going solar, 2025 is the year to act.
"The savings window is closing faster than most realize, and the cost of waiting will hit your wallet hard."
Is the Inflation Reduction Act (IRA) Facing Cuts?
Yes. In 2025, Republicans significantly scaled back key parts of the Inflation Reduction Act (IRA) during the budget reconciliation process to help fund the extension of the Tax Cuts and Jobs Act (TCJA). In May, the House Ways and Means Committee introduced legislation to eliminate several clean energy incentives, including the full removal of the 30% residential solar tax credit (Section 25D) for homeowner-owned solar and battery systems at the end of 2025. The House passed this measure on May 22, sending it to the Senate for further action.
After several revisions, the Senate finalized the bill with a firm deadline: the 25D solar tax credit will end at midnight on December 31, 2025. Homeowners must have their solar and battery systems fully installed by then to claim the 30% tax credit.
In a partial win for the industry, the Senate removed a proposed restriction on residential solar leases and power purchase agreements (PPAs). As a result, these systems remain eligible for the 48E tax credit through the end of 2027. President Trump signed the final version of the bill into law on July 4, 2025.
Currently Available Ohio Solar Power Incentives in 2025
Let’s first look at the available Ohio solar power incentives available right now in 2025, which dramatically lower your overall installation cost:
- 30% Federal Solar Tax Credit: Covers nearly one-third of your total system cost if installed by December 31, 2025.
- Local Utility Rebates: Programs from AEP Ohio, FirstEnergy, and Duke Energy Ohio.
- Net Metering: Lock in credits before future regulatory changes disrupt the market.
- Property Tax Exemptions: Solar panel systems are exempt from increasing your home’s taxable value.
- SRECs: Sell your solar energy production through Ohio’s SREC market.
- Low-interest Green Energy Loans: Offered by Ohio banks and credit unions, sometimes in partnership with OEPA.
Why Ohio Solar Incentives Are at Their Peak in 2025?
In 2025, Ohio homeowners are availing multiple solar incentives. However, here’s what’s at stake if you wait to install solar any further:
- 30% Federal Solar Tax Credit — disappearing after 2025 due to new federal legislation.
- Statewide property tax exemptions — at risk of future budget cuts.
- Ohio’s favorable net metering policies — always subject to change.
- SRECs that provide annual revenue — could be phased out.
A Real-World Example:
A typical Ohio homeowner could save 40–50% off the total cost of a solar system today. Wait until 2026, and you’re looking at a $6,000-$8,000 higher price tag, with no guarantee of local incentives.
Solar Panel Incentives Ohio Homeowners Often Overlook
Beyond state programs, there are solar panel incentives Ohio homeowners frequently miss:
- Columbus Green Energy Fund: Limited-time rebates and loans.
- Cincinnati Solarize Program: Bulk-purchase discounts that expire.
- County-level Energy Efficiency Rebates: Available in Franklin, Hamilton, and Cuyahoga counties.
Ohio businesses can also benefit from accelerated depreciation and USDA REAP grants.
What Happens If You Wait Until 2026 or Later?
Delaying could cost you more than you think:
- Smaller Savings: The federal tax credit will start dropping, and Ohio's incentives may be reduced or changed.
- Higher Costs: Equipment prices, utility interconnection fees, and labor costs are expected to rise with demand and inflation.
- Policy Risk: Future changes in state or federal leadership could weaken or cancel current solar support programs.
- Bigger Energy Bills: As electricity rates keep climbing, waiting means you'll pay more, both upfront and over time.
- Longer Payback: The more you wait, the longer it takes to break even on your solar investment.
The Urgency is Real: Why Ohio Solar Installers Are Booking Up Now
Solar companies across Ohio report a spike in demand following the bill’s passage:
- Fall/winter 2025 installation slots are filling fast.
- Weather delays and permitting backlogs could push projects past the tax credit deadline.
If you wait to start, you may miss out completely.
How to Claim Your Ohio Solar Incentives Before the Deadline
- Request a solar audit from YellowLite, Ohio’s trusted solar company.
- Apply for your federal and state solar tax credits and rebates.
- Schedule your installation before December 31, 2025.
Bonus Tip: Ask about $0 down payment options to lock in savings with no upfront cost.
Key Takeaway
Waiting until 2026 could cost you thousands in lost incentives and higher prices. 2025 is your last, best shot to lock in Ohio solar incentives, the 30% federal solar tax credit, and maximum savings.
At YellowLite, we’re helping Ohio homeowners make the switch easily with $0 down financing, free consultations, and expert solar solutions tailored for Ohio’s changing energy landscape. Don’t wait until it’s too late.
FAQ
Q1: What are the best Ohio solar incentives available in 2025?
The best incentives include the 30% federal solar tax credit, utility rebates, net metering, SRECs, and property tax exemptions, all at their peak in 2025.
Q2: Does Ohio offer its own solar tax credit?
No separate Ohio solar tax credit, but state and local incentives stack with the federal credit for big savings.
Q3: Can I combine Ohio solar power incentives with federal tax credits?
Yes, you’ll maximize savings by combining rebates, net metering, SRECs, and property tax exemptions with the 30% federal solar tax credit.
Q4: How do solar panel incentives Ohio homeowners qualify for differ by city or county?
Cities like Columbus and Cincinnati offer additional rebates or loan programs. County energy programs vary widely.
Q5: What happens if I install solar after 2025?
You’ll lose solar savings, get fewer local incentives, and likely have higher installation costs and wait times due to demand spikes and policy changes.
