The deadline for the solar tax credit is hard set for the end of this year for residential solar installations. This change, a result of the recent budget bill which was passed in July, has created a run on the industry as homeowners try to secure a new or expansion installation to take advantage of the current federal incentives. It’s safe to say that those who are currently clamoring for installations are aware of the ticking clock hanging over these appointments, but there is a second deadline that many are not aware of.

This second deadline is not as clearcut as the one outlined in the budget bill, and it will likely vary from company to company, but it’s an important and consistent part of this and any industry rush. Knowing the when and why of this second deadline will help you make the most of this current tax credit situation, and will also serve you well in future situations like this one. These kinds of industry-defining shifts don’t happen every day, but when they do occur it’s in your best interest to be prepared to identify the hidden second deadline, so you can come out ahead of the pack instead of stuck on a waitlist hoping to make it in under the wire.

What is the deadline for the solar tax credit?

The solar tax credit officially expires for residential solar installations and expansions on December 31st, 2025. Come January 1st of the new year, new solar projects and system expansions will no longer qualify for the 30% solar investment tax credit, and will instead benefit only from other federal and state incentive programs, not to mention the property value increases and energy bill savings that come standard with any solar system. We are certainly sad to see the tax credit go, as it was a great way to help people invest in clean, renewable energy; a goal we should all consider important as it contributes to the health and wellbeing of our shared environment.

That being said, even when the deadline passes and the tax credit ends, solar will remain a smart, strong investment for those who are interested in combatting the out of control energy rates in California and around the country. Our aim with this current push is to help as many people as possible get in and qualify for the tax credit, as we’re not likely to see another federal incentive like it for some time. This is where the second deadline comes into play, as we want to ensure people are fully informed about how this current run on the industry will play out.

What is the second deadline?

Whereas the first deadline for the solar tax credit is pretty straightforward, the second deadline is less clearly defined. This is because one is a set end date to a federal program, and the other is a variable date determined by the individual organizations who design and install solar systems. That second date is the last date by which a solar provider can guarantee that sold projects can qualify for the tax credit. This will differ from company to company, but for Simply Solar, we’re projecting that our second deadline will be some time in September. After that point, we won’t be able to guarantee that new projects will be completed before the federal deadline, due to the massive increase in interest.

It’s difficult to have to make that decision, as we’d like to help as many people as possible access the tax credit, but we saw a similar situation a few years ago with the switch from NEM 2 to NEM 3 in California. Back then, we had a similar second deadline in place, and we worked hard to help as many people get in under the wire, with some bookings coming on the day of the deadline itself! Because this second deadline is self imposed, there may be some flexibility as luck and circumstance allows new spaces to open up on the calendar, but it’s important to be very clear that these are exceptions to the rule, and you’ll be better off getting in before that date than you will be hoping for the stars to align on a lucky appointment opening up.

Deadline Variations

Something to consider in a situation like this is what exactly causes such variation in second deadline setting for different organizations. The size of a solar company certainly has something to do with it, as larger organizations are likely to have more resources to work with, but don’t discount planning and preparation as you examine this rush. Any solar company worth their salt has spent the last few months preparing for this event, knowing a rush would soon follow any change to the tax credit legislation.

Simply Solar has been expanding teams and preparing resources in anticipation of this run on the industry, and already we’re seeing that pay off as other local installers close up their calendars well before our projected September date. We’re all in the same boat, and we’d all like to help as many people as possible make it in before the deadline, but at the end of the day there are only so many spots available to claim that 30% tax credit before it disappears.

End of the Line

So, now we come to the end of the line - you’ve got the first deadline marked on your calendar, and you know September is when we’re forecasting our second deadline will be. What can you do with that information? Well, our main advice for you would be to book a free consultation now, before September gets here. Space is limited and appointments are filling up quickly, and things are only going to accelerate in the coming weeks. Getting in now gives you the best chance at securing a spot on our installation calendar, ensuring you’re able to get in and qualify for the tax credit before it expires. Don’t wait too long - that second deadline is coming up fast.