If your business is exploring solar energy, time is running out to lock in maximum federal incentives. A new Senate proposal – part of the One Big Beautiful Bill Act (OBBBA) – would slash the Federal Investment Tax Credit (ITC) for commercial solar projects starting January 1, 2026.
The good news? As of this posting, you can still secure the full tax credit in 2025 by “safe harboring” your project – even if you aren’t ready to start construction.
What’s Changing Under the Senate Version of the OBBBA?
The 30% Solar Tax Credit Phases Out Fast
Starting in 2026, the ITC would drop to 18%, and then as low as 6% by 2028. That could mean losing out on hundreds of thousands in savings per project.Projects That Are Safe Harbored in 2025 Are Protected
Projects that meet IRS safe harbor guidelines this year will still qualify for the full 30%, even if construction happens later.Tighter Rules on Foreign Components
Starting in 2026, solar projects using components from certain foreign suppliers (like Chinese manufacturers) may become ineligible for tax credits.Energy Storage Systems (ESS) Still Eligible Through 2033
If you’re considering solar + battery storage, you’re in luck — the 30% tax credit for energy storage remains untouched until 2033 under the current bill.
What Business Owners Should Do Now
Every month that passes makes it harder to qualify for safe harbor. To protect your tax credit:
Evaluate your energy use and property feasibility
Begin procurement or make a qualifying payment in 2025
Work with a team that knows how to navigate safe harbor compliance
At HES Renewables, we’ve helped dozens of businesses secure their incentives early and avoid financial surprises from policy changes.
Don’t Wait!
The federal landscape is shifting fast. If you wait until next year, you could be stuck with a fraction of today’s incentives. Let our team help you optimize your system design, timeline, and financing strategy while the full credit is still available.
Get in touch today to secure your 30% solar tax credit before it disappears.
Need More Details? Read Below:
BIGGEST NEGATIVE IMPACT FOR COMMERCIAL SOLAR: Quick phasedown of the Investment Tax Credit (ITC)
The Senate version of the OBBBA would phase out the 30% Investment Tax Credit (ITC) at a much more accelerated schedule. In the current version of the bill, commercial solar projects that begin construction would still qualify for the full solar incentive, though large scale projects would be challenged to reach this deadline for the start of construction.
POSITIVE LANGUAGE FOR SOLAR TAX CREDITS: Transferability Preserved
The bill’s language currently preserves the ability to transfer the ITC to third parties. This leaves open financing/ownership options and tax equity structures.
CHANGES FOR COMMERCIAL SOLAR COMPONENTS: Stricter Rules on Foreign Content
Beginning in 2026, the current senate bill would make certain solar projects ineligible for the ITC. This would be focused on adherence to non-use of components from Foreign Entities of Concern (FEOC), including certain Chinese companies that supply solar project components.
SAFE HARBOR FOR SOLAR TAX CREDITS: No impact to Projects Already Under Construction
Solar construction projects that are already underway are currently viewed to be unaffected by the One Big Beautiful Bill’s impact on future solar projects. Those commercial solar system projects already underway would receive “safe harbor” from the list of impacts of the OBBBA.
ENERGY STORAGE SYSTEM TAX CREDITS: Firm Power Tax Credits
The current bill would extend “technology-neutral” tax credits for firm power sources. As this relates to companies looking to build their own solar and storage system, this would provide tax credits for Energy Storage Systems (ESS) (which increase the benefits of commercial solar) as well as for geothermal, hydroelectric, and nuclear systems. For private companies looking to build their own energy system, clearly an ESS is the most practical option.
The positive news for commercial energy storage systems is that the 30% Investment Tax Credit for commercial batteries is currently written to continue as a 30% tax credit until 2033. This is a benefit to private companies looking to control and lower their energy costs, as well as to the reliability of the electric grid for all businesses and homes.
WHAT TO DO NOW REGARDING COMMERCIAL SOLAR + STORAGE SYSTEMS?
Watch this blog for updates as the One Big Beautiful Bill’s language changes as it goes through the process of being presented to be voted into law.
For companies looking toward commercial solar and/or commercial energy storage systems, there is an urgency to act. The smartest route toward receiving all the available energy tax credits and incentives would be to immediately investigate how a solar + storage system can make your company more competitive with lower and more-predictable energy costs.
The team at HES Renewables is ready to help you evaluate your current energy use, your future energy needs, and your property’s capacity for the right solar + storage system for your business. Nearly every business and property in California will benefit from a solar and energy storage system with energy cost savings over the coming decades.
We encourage you to reach out to us while there is still time to receive the current solar tax credits. Changes are looking to possibly take effect on January 1, 2026, and your project likely will need to reach certain milestones before that date. Our top solar team is ready to optimize your project structure, financing strategy, and construction schedule.
The only certainty is change. For companies looking to gain independence and energy cost savings, the changes on the horizon for commercial solar look negative. Act quickly, before they impact your project’s cost.
