Senate passes budget bill without solar excise tax

On July 1, the U.S. Senate passed its version of the 2025 budget reconciliation bill, with Vice President JD Vance casting the tie-breaking vote. While the final legislation still poses challenges for the clean energy industry, several significant changes were made—some of which may help utility-scale and residential solar projects push forward in the short term.

What’s Changed in the Final Senate Bill?

The 50% Excise Tax on Chinese Solar Components—Removed

Originally proposed as a major blow to solar developers, the excise tax on solar projects tied to Chinese materials has been stripped from the final version. This is a huge relief to many in the industry, though foreign sourcing rules still remain on the horizon.

Residential Solar Tax Credit (25D) Still Set to Expire

The 30% residential solar tax credit (ITC) is still scheduled to expire at the end of 2025. Homeowners must install systems by December 31 to claim the full credit. (SEIA Overview Here)

Utility-Scale Projects Get a Temporary Lifeline

Projects that begin construction within 12 months of the bill’s enactment and are placed into service within four years can still qualify for the full ITC/PTC (48E/45Y). According to Roth Capital Partners, this could effectively extend the 100% tax credit to mid-2030 for projects that begin construction by mid-2026. Projects that miss that timeline must be placed into service by the end of 2027 or risk losing incentives.

What’s Still Intact (or Repaired)

• Residential leasing companies can now receive the 48E commercial ITC

• Storage tax credit (48E) remains untouched—still available through 2033

• Manufacturing tax credit (45X) is preserved and stackable, allowing wafer-cell-panel manufacturers to receive layered incentives if made at the same facility

What About Foreign Entity Restrictions?

Projects that start construction in 2025 are exempt from the Foreign Entity of Concern (FEOC) rules.

However, starting in 2026, developers can no longer receive “material assistance from a prohibited foreign entity”—a clause that will complicate sourcing and pricing for many U.S.-based solar companies.

Industry Leaders Respond

Abigail Ross Hopper, President and CEO of SEIA, issued a stark warning:

“If this bill becomes law, families will face higher electric bills, factories will shut down, Americans will lose their jobs, and our electric grid will grow weaker.”

“This would destabilize our energy future and strip millions of families of the energy savings, resilience, and independence that solar and storage provide.”

What Comes Next?

The bill now heads back to the House of Representatives, where lawmakers must approve the Senate’s revisions before it moves to the President’s desk.

In the meantime, homeowners and businesses still have a narrow window to take advantage of the current 30% solar tax credit—and that opportunity is closing fast.

Don't Wait Until the Window Closes

If you’re considering solar for your home or business, now is the time to act. The incentives are still available—but this bill makes it clear: they won’t be around for long.

👉 Schedule your solar consultation today and lock in your 2025 installation before it’s too late.

Senate version of Trump's "big, beautiful bill" would pummel renewable energy industry with new tax

The latest version of President Trump’s sweeping second-term legislative agenda poses a serious threat to the future of clean energy in the United States. The Senate version of the so-called “Big, Beautiful Bill” introduces a new excise tax on wind and solar projects, accelerates the end of renewable energy tax credits, and imposes strict foreign sourcing restrictions—changes that could increase energy prices, halt clean energy development, and eliminate millions of jobs.

What’s in the Bill That Impacts Solar and Renewables?

1. New Excise Tax on Clean Energy Projects

Buried on page 558 of the Senate bill is a proposed excise tax on all wind and solar projects that begin construction after June 16, 2025, or are placed into service after 2027.

• This tax is expected to cost clean energy developers $4–$7 billion by 2036, according to the American Clean Power Association.

• Consumers may see electricity prices increase by 8–10% as a result.

2. Foreign-Sourced Material Restrictions

Projects would be taxed if they source components from “prohibited foreign countries” like China. While the policy aims to promote U.S. manufacturing, clean energy experts warn that avoiding Chinese components is currently cost-prohibitive, particularly for solar developers.

This could drive energy-hungry companies like AI and data center operators to source power overseas, defeating the bill’s intended goals.

3. Accelerated Sunset of Renewable Tax Credits

The Senate bill would also eliminate or phase out tax credits for solar, wind, electric vehicles, and energy-efficient technologies sooner than previously planned:

• Inflation Reduction Act tax credits, originally slated to run through 2032, would now end in 2027 or 2028, depending on the version passed.

• The Senate version ends credits earlier than the House version—one more blow to long-term project viability.

A study from Rhodium Group estimates that this could result in a 72% drop in new solar and wind installations over the next decade.

Reactions Across the Spectrum

Elon Musk broke his silence, calling the Senate bill:

“Utterly insane and destructive... A massive strategic error... It will destroy millions of jobs and leave America extremely vulnerable.”

Even conservative energy analysts and pro-business groups were taken aback:

• Alex Epstein, a known critic of green subsidies, said: “I just learned about the excise tax and it’s definitely not something I would support.”

• The U.S. Chamber of Commerce called the tax “bad energy policy” and warned it would increase electricity prices during a time of rising demand.

And in a rare moment of unity:

• The North American Building Trades Union declared the bill could become “the biggest job-killing bill in the history of this country.”

• Their statement compares its impact to “1,000 canceled Keystone XL pipeline projects,” estimating 1.75 million jobs and $148 billion in annual wages and benefits lost.

What This Means for Solar Installers, Homeowners, and the Future of Clean Energy

If passed, this bill would mark a sharp reversal of the U.S.'s clean energy policy, with devastating consequences for:

• Homeowners seeking to install solar before the credit expires

• Installers and contractors who rely on incentives to drive business

• Local communities counting on clean energy jobs and grid resilience

The bill creates financial uncertainty, threatens supply chains, and shifts momentum back to fossil fuels—a move many experts view as economically and strategically shortsighted.

With a looming December 31, 2025 deadline for the 30% federal solar tax credit, now is the time for homeowners and businesses to act. The current political climate puts solar’s future on the line—and waiting may cost more than just money.