Navigating H.R.1 and Its Impacts on Solar Tax Credits for Participants

Program Update

On July 4, 2025, House Resolution 1 (H.R.1), known as the One Big Beautiful Bill Act, was signed into law. The bill introduces significant changes to federal clean energy tax credits that were previously available under the Inflation Reduction Act.

The federal clean energy tax credits available under the Inflation Reduction Act offered substantial savings for many residents, providing at least 6% of the total project cost (and at least 30% for projects meeting federal prevailing wage requirements) back as a tax credit.

Since the window to access federal clean energy tax credits is now compressed, the IPA encourages those considering solar to act quickly for a better chance of benefiting from the tax credits before they expire. Delays could lead to solar companies either having to meet additional requirements, more aggressive installation timelines, or missing the opportunity to receive the tax credit.

CHANGES

Residential Solar projects (owned by the resident):
- Only projects that completed construction by December 31, 2025, will remain eligible for federal clean energy tax credits.
Commercial Solar projects (including Residential Solar leases or PPAs):
- Projects commencing construction on or after January 1, 2026, will face additional eligibility requirements, including foreign entities of concern and the placed-in-service date. All federal clean energy tax credits under H.R.1 expire after 2027. This includes projects located on a residence but owned by a commercial entity (benefitting the resident through a lease or PPA).

Although federal incentives are being phased out, Illinois Solar for All is a state-incentive program with an independent funding stream, separate from federal programs, and will continue to support income-eligible residents accessing the benefits of solar energy.

The IPA’s mission remains unchanged: to build an equitable clean energy future for all Illinoisans.

Visit the Illinois Power Agency’s website for more information on what Illinois residents need to know about these changes and view a recorded webinar from September 26, 2025, outlining the road ahead.