Last night, the House passed its version of President Trump’s “One Big, Beautiful Bill.” Republican lawmakers are attempting to repeal the Inflation Reduction Act and scale back solar tax credits that make going solar enticing.
Thankfully, there’s still plenty of time to go solar and claim today’s record-high incentives. This legislation will still need to go through the Senate to become law. If it passes in its current form, homeowners will still have until year-end to claim the residential credit.
In this article, we’ll look at the legislative process in depth and lay out a few examples of what might happen as Congress goes through this process.
If you’ve been on the fence about going solar, now is the time. Incentives for going solar are at an all-time high, power bills are set to increase 15-20% this year, and tariffs will likely make solar components more expensive in the coming months.
Going solar is still the best way to opt out of ever-increasing energy bills.
If you’re ready, find out if solar is a good fit for your home or business today.
If you want to inform yourself further about what’s happening, read on! Exact Solar is staying on top of this evolving situation, and we’ll keep you informed every step of the way. If you’d like to receive weekly updates about the latest news in solar, you can follow our new channel, This Week In Solar.
Table of Contents
What’s Going On In Washington
Republican lawmakers have launched a budget drive to repeal major pieces of President Biden’s landmark climate law, the Inflation Reduction Act (IRA).
Our Research and Policy Specialist, Aaron Nichols, was interviewed by EnergySage last week on the impact this bill would have on the American people.
In a series of late-night committee sessions on Capitol Hill, the GOP majority crafted what President Donald Trump calls his “One Big Beautiful Bill,” a multi-trillion-dollar budget package that, if passed, will roll back several clean energy programs.
By using a special process called budget reconciliation, Republicans aim to fast-track these repeals with only a simple majority vote in the Senate, sidestepping the usual 60-vote filibuster hurdle.
Under reconciliation, Congress can attach policy changes to a budget bill as long as they directly affect federal spending or revenue, allowing those changes to pass the Senate with a simple majority. This is the exact mechanism that Democratic lawmakers used to pass the Inflation Reduction Act.
Republicans are using a special process called budget reconciliation to change this landmark law. This process lets Congress pass laws that affect the federal budget with just a simple majority (they can move faster and don’t need as many votes).
In the early hours of the morning on Thursday, May 22nd, 2025, House Republicans passed their version of President Trump’s “One Big, Beautiful Bill.”
What Reconciliation Could Mean for Solar
How They Plan to Do It
Republicans are using budget reconciliation to cut costs and fund tax breaks promised by former President Trump. To do this, they are looking to remove or shrink clean energy programs in the IRA. This includes tax credits for homeowners, electric cars, solar projects, and clean energy factories.
The House of Representatives, where Republicans hold the majority, has already started moving this plan forward. The tax-writing committee in the House, called the Ways and Means Committee, proposed major cuts and advanced the bill on May 14th, 2025. On May 18th, the budget committee added their language and advanced the bill.
What They Want to Cut
Several incentives in the Inflation Reduction Act were designed to boost domestic manufacturing of solar panels and the adoption of solar energy nationwide. Here are some of the major clean energy programs that could be changed or ended:
- Residential Solar Tax Credit (25D): This lets homeowners get 30% off the cost of solar panels through a federal tax credit. It was supposed to last until 2032. The new plan would end the credits on December 31st, 2025.
- Tech-Neutral Tax Credits (45Y and 48E): These credits support commercial projects (solar on businesses). The new bill would end both credits completely after 2028, with no phase-out.
- Construction Deadline for 48E Projects: Projects must start within 60 days of the bill becoming law or be in service by the end of 2028 to qualify for the 48E credit. This short window could make it hard for many projects to qualify.
- Manufacturing Tax Credit (45X): This credit helps companies build solar panels and batteries in the U.S. The current budget plan would end this credit in 2031 with no slow phase-out if passed.
- Transferability: The IRA allows companies to sell their tax credits for cash. This helps small and new companies. The new bill would stop this mechanism two years after it passes.
The proposal also adds new Foreign Entity of Concern (FEOC) restrictions that block projects from getting credits if they use parts or technology from certain foreign countries, especially China.
Taken together, this package is a sweeping rollback of the IRA’s climate investments. “This is largely a repeal of the Inflation Reduction Act,” said Evan Chapman, Senior Policy Director at Clean Tomorrow, emphasizing that the bill would reverse much of the law’s support for clean power.
Why This Matters for Solar
The solar industry has grown quickly thanks to the IRA. Since 2022, companies have built new solar factories and launched thousands of projects across the U.S. The IRA has led to over $300 billion in clean energy investment already, with more than $500 billion still planned.
Much of this is going to solar. 66% of the new electricity-generating capacity added to the grid last year was solar, largely because of the Inflation Reduction Act’s incentives.
If the new plan passes, the solar industry could lose much of that momentum. Here’s how:
- Homeowners May Stop Investing in Solar at the Same Rate: Without the 30% credit, it will be more expensive to put solar panels on a home. Many families may decide it’s not worth it.
- Installers Could Lose Jobs: Small businesses that install solar panels could struggle. Fewer customers mean fewer jobs, meaning small installers would likely have to lay off part of their workforce.
- Factories May Delay or Cancel Plans: Many new factories that make solar panels and batteries were built because of the IRA. If the credits are repealed, companies may slow or stop their plans.
- Big Solar Projects Could Slow Down: Large solar farms take years to build. If the credits end, some projects will be delayed or cancelled.
What the Solar Industry Is Saying
Solar companies and trade groups are very concerned. They say the new plan could cause factories to shut down and workers to lose their jobs unnecessarily.
Many of these new projects are in Republican-led states, like Texas, Georgia, and South Carolina.
Raghu Belur, co-founder of Enphase Energy, said his company built new manufacturing plants in the U.S. because of the IRA. He expected some changes but called the current plan “abrupt.” He says the solar industry needs a clear path, not a sudden stop.
The Solar Energy Industries Association (SEIA) said that 75% of the jobs and investments at risk are in Republican districts. They called the IRA “the most successful industrial policy in U.S. history.”
Many of the largest residential solar markets are in Republican-led states like Texas, Florida, and Arizona. Industry leaders note that the policy would hurt constituents in those states and undercut those same local economies.
“At a time when billions of dollars are being invested in states that overwhelmingly voted for President Trump, this proposed legislation will effectively dismantle the most successful industrial onshoring effort in U.S. history… “But that’s not all: Americans’ electric bills will soar. Hundreds of factories will close. Hundreds of billions of dollars in local investments will vanish. Hundreds of thousands of people will lose their jobs. Families will lose the freedom to control their energy costs. And our electric grid will be destabilized” the Solar Energy Industries Association (SEIA) said in a statement.
Senate Republicans Want Changes
The bill may pass the House, but some Senate Republicans are not fully on board. They say the cuts are too deep and could hurt new technologies like advanced nuclear and geothermal power. These technologies are not ready yet and need more time and support.
Senator Kevin Cramer from North Dakota said, “It’s too short for truly new technologies.” He wants the credits to last longer for these newer energy sources.
Other senators, like Shelley Moore Capito and John Hoeven, said the House bill is a “starting point.” They expect it to change in the Senate.
A group of four Senate Republicans also wrote a letter warning that cutting these credits could raise energy prices and hurt manufacturing. They want to avoid causing damage to businesses that have already made big investments.
All that being said, last year, 21 House Republicans voiced their support for the credits in a letter, but when push came to shove, it wasn’t an important enough issue for them to advocate for it.
What Happens Next
The House plans to vote on the bill by the end of the week. If it passes there, it will go to the Senate.
Senators can change the bill, but any changes must go back to the House for another vote. Because Republicans hold only a small majority in both chambers, they will need to stay united to pass the final version.
Many groups are working hard to protect the clean energy credits. Solar companies, environmental groups, and even some utility companies are meeting with lawmakers to explain how the IRA is helping their communities.
If you’d like to do your part to protect the credits, the Solar Energy Industries Association has created a tool that you can use to find your representative and contact them to advocate for clean energy in your local community.
Defend American Energy
What Budget Cuts Mean for Solar Going Forward
If the proposed cuts go through and become law, the solar industry could face a temporary slowdown. The loss of tax credits would make it more expensive to build solar projects. Jobs could disappear as company owners are forced to downsize. Investment could slow down. Homeowners could lose their chance to own their power and opt out of ever-increasing energy bills.
The IRA was meant to help America lead the way in clean energy. The new bill would be a big step back in its current form.
However, the final decision hasn’t been made yet. The Senate still has a chance to make changes, and people across the country are watching to see what Congress does next.
As uncertain as things are, it’s important to note that these incentives are still in place, and energy costs are still continuing to climb. If you’ve been sitting on the sidelines, now is the time to get into the game. You still have time to take advantage of these incentives before they potentially disappear at the end of the year.
Contact us today and let our team scope your home or business for solar!