On May 22, 2025, the U.S. House of Representatives passed the “One Big Beautiful Bill Act” with a razor-thin 215-214 vote, a piece of legislation that could reshape the future of solar energy in the United States. This bill, which now awaits Senate consideration, proposes significant changes to clean energy incentives introduced under the Inflation Reduction Act (IRA) of 2022. For those considering solar panels for their homes or businesses, the bill’s provisions could make solar energy less affordable and slow its adoption. Below, we break down the bill’s main provisions, its possible effects on solar adoption, and what it might mean for consumers, businesses, and the broader clean energy landscape.
What Is the One Big Beautiful Bill Act?
The One Big Beautiful Bill Act is a comprehensive tax and spending package that includes provisions to extend tax cuts, increase deductions for state and local taxes, and boost funding for sectors like the military and border enforcement. However, its most controversial provisions involve scaling back clean energy incentives, particularly those supporting solar energy. The bill targets tax credits established under the IRA, which have been instrumental in driving the recent boom in solar installations across the country.
According to a detailed summary by Buchanan Ingersoll & Rooney PC, the bill passed the House on May 22, 2025, and is now under Senate review, where modifications are expected due to differing priorities among Republican senators. The narrow House vote and ongoing Senate debates highlight the bill’s contentious nature, making its final impact uncertain.
How the Bill Impacts Solar Energy
The bill includes several provisions that directly impact solar energy adoption:
- Termination of the Residential Solar Tax Credit: The 30% federal Investment Tax Credit (ITC) for residential solar installations, a cornerstone of solar affordability, would end by December 31, 2025, instead of its planned 2034 expiration. This credit has allowed homeowners to deduct 30% of their solar installation costs from their federal taxes, significantly reducing upfront expenses.
- Elimination of Credits for Leased Solar Systems: Many homeowners opt for leased solar systems to avoid high initial costs. The bill would remove tax credits for these systems, potentially limiting access to solar for those who cannot afford to purchase panels outright.
- Accelerated Phase-Out for Commercial Solar Projects: Commercial solar projects would need to begin construction within 60 days of the bill’s enactment and be completed by the end of 2028 to qualify for tax credits. This tight timeline could discourage investment in large-scale solar developments.
- Broader Clean Energy Rollbacks: The bill also proposes ending clean electricity production tax credits (PTC) and investment tax credits (ITC) by 2030, two years earlier than planned, and imposes restrictions on clean energy factories using Chinese equipment or inputs, as noted by Energy-Storage.News.
These changes could fundamentally alter the financial incentives that have driven solar energy’s growth in recent years.
How Will This Affect Solar Energy Adoption?
The proposed changes could have far-reaching effects on the solar industry and its adoption:
Reduced Financial Incentives
The 30% ITC has been a major driver of solar adoption, making it more affordable for homeowners and businesses to install solar panels. Ending this credit nearly a decade early could increase the cost of going solar, potentially deterring new installations. Similarly, eliminating credits for leased systems could exclude lower-income households from accessing solar energy, as leasing often requires little to no upfront payment.
Economic and Job Impacts
Industry leaders have raised alarms about the bill’s economic consequences. Abigail Ross Hopper, CEO of the Solar Energy Industries Association, called the bill “willfully ignorant” of solar’s role in meeting U.S. energy demands, warning that it could lead to blackouts and cede technological leadership to countries like China (CNBC). Sunrun CEO Mary Powell estimated that the legislation could result in 250,000 job losses in the solar sector, a significant blow to an industry that has been a source of employment growth.
Higher Electricity Costs
By slowing solar adoption, the bill could lead to higher electricity costs for consumers. Solar energy has become one of the cheapest sources of electricity in many regions, and reducing its growth could force reliance on more expensive or less sustainable energy sources. Reuters reported that clean energy companies saw their shares drop significantly after the bill’s passage, reflecting market concerns about its impact.
Global Competitiveness
The bill could undermine U.S. leadership in clean energy technology. As other countries invest heavily in renewables, scaling back incentives could put the U.S. at a disadvantage in the global clean energy race. Scientific American described the bill as a “nightmare scenario” for clean energy, highlighting its potential to reverse progress made under the IRA.
Industry and Public Reactions
The solar industry and clean energy advocates have strongly opposed the bill. Cynthia Alvidrez, a solar energy consultant, expressed shock at the bill’s provisions, noting that the solar community was “completely alarmed” by the last-minute inclusion of clean energy cuts (ABC7 Los Angeles). Analysts like Philip Shen from Roth Capital noted that the bill’s impact was worse than expected, with clean energy companies facing immediate financial challenges (Reuters).
However, supporters of the bill, including some Republican lawmakers, argue that it prioritizes broader economic goals, such as extending tax cuts and increasing funding for other sectors. They contend that these measures could stimulate the economy, even if they come at the expense of clean energy incentives.
Political Context and What’s Next
The bill’s passage in the House was narrow, with a 215-214 vote, indicating significant political division. It now heads to the Senate, where Republicans hold a slim 53-47 majority. However, opposition from senators like Rand Paul and Ron Johnson suggests that the bill may face challenges or amendments. Buchanan Ingersoll & Rooney PC noted that Senate Republicans have differing priorities, which could lead to changes in the bill’s clean energy provisions.
The uncertainty surrounding the Senate’s actions means that the bill’s final impact on solar energy is not yet clear. If the Senate preserves some clean energy incentives, the effects on solar adoption may be less severe. Conversely, if the bill passes as is, the solar industry could face significant setbacks.
What This Means for Your Solar Plans
If you’re considering installing solar panels, the potential end of the 30% ITC by December 31, 2025, could affect your decision. Acting sooner rather than later may allow you to take advantage of existing incentives before they expire. For businesses, the tight deadlines for commercial projects mean that planning and investment decisions need to be made quickly to secure tax credits.
To better understand the bill’s impact, refer to these resources:
- CNBC for industry perspectives and economic impacts.
- Yale Climate Connections for a climate-focused perspective.
- Scientific American for a broader look at clean energy implications.
The Future of Solar Under the Bill
The One Big Beautiful Bill Act represents a major turning point for solar energy in the United States. By scaling back critical tax incentives, it could make solar less accessible, slow industry growth, and impact jobs and electricity costs. However, the bill’s fate in the Senate remains uncertain, and changes are still possible. We’ve outlined the challenges and the ongoing political debate to help clarify what’s at stake. If you’re concerned about how this could affect clean energy progress, now’s a good time to reach out to your senator and let them know you oppose the One Big Beautiful Bill.
Stay tuned as the Senate moves forward, and consider how these shifts might affect your choices.
Thinking about going solar? With policy changes on the horizon, now might be the right time to take action. Visit Sunwise Energy to learn more about your options before incentives shift.
