By Kyle Ritland, Sun Valley Solar Solutions
After many months of negotiation and ample media attention, the One Big Beautiful Bill Act has now been signed into law, completing Congress’s fast-track repeal of many Inflation Reduction Act (IRA) incentives for renewable energy. For Arizona homeowners, the headline here is simple: The 30% Residential Clean Energy Tax Credit (IRC 25D) will disappear for solar energy systems installed after December 31, 2025. Also gone after 2025 is the stand-alone battery tax credit. For any Arizona homeowners considering solar, the time to act is now, as any system installed after 2025 will effectively be 30% more expensive than it is today.
What the Law Changes
- Residential solar & batteries – Home-owner-owned solar energy systems (cash or loan) and batteries must be installed by 12/31/25 to claim the full 30 % credit. Leases and PPAs were already excluded.
- Commercial & community projects – Large solar and wind developments still have access to the solar tax credits, but these commercial systems must break ground within 12 months of the law’s enactment or be placed in service by Dec 31, 2027. Otherwise, the incentive vanishes for commercial solar projects, as well.
Why it Matters in the Valley
- A shrinking construction window
Utility interconnection, HOA approvals, and city permits routinely add 90-180 days to residential timelines. With the loss of federal tax incentives, 2025 schedules and backlogs will be more congested than usual. Losing even a week to paperwork could push projects past the 2025 cutoff. If solar has been on your mind, schedule a consultation now! - Rates are climbing — again
The Arizona Corporation Commission OK’d an 8% APS hike last year and the utility has already filed for another 14% increase starting mid-2026. SRP customers face a 2.4% bump in November 2025. With Arizona’s booming growth and hotter summers driving prices ever higher, rooftop solar is a reliable hedge against escalating utility costs. - APS buyback rate drops on September 1
APS will trim its solar buy-back rate again on September 1, reducing the credit they give for excess solar energy by up to 10%. Today’s export rate is 6.857 ¢/kWh — wait past the September 1 deadline and you’ll likely get barely six cents for surplus power. Sign up before September 1, 2025 and you’ll lock-in today’s better rate for 10 years. - No change to state incentives
Arizona’s 25% tax credit (capped at $1,000) survives, so stacking state and local rebates still softens payback times even without federal help.
Timeline & action plan for homeowners
Demand is already spiking as news about the loss of federal solar incentives spreads The newly signed law specifies that a system must be fully commissioned by the utility — also known as Permission To Operate (PTO) — by December 31, 2025 to qualify. Utilities often have reduced staff through the holidays, further extending timelines that will already be packed. As such, the deadlines below are estimates — not guarantees — for what is likely to be a race to the finish line for thousands of solar customers. The smartest move is to get started right away so your system is installed, inspected, and fully commissioned (PTO) by December 31, 2025.
Note: Deadlines assume typical Maricopa County lead times; rural jurisdictions may require additional margin.
Should you add batteries now?
Yes! Because stand-alone batteries also qualify for the 30% federal tax credit that will end after 2025. Batteries provide additional savings while ensuring critical backup power during summer outages — an increasingly common worry as extreme-heat events continue to staring Arziona’s electrical grid.
Bottom Line
The new law sets an 18-month hourglass for maximizing federal solar benefits. Combined with rising APS and SRP rates, every month you delay could cost thousands in lost incentives and higher power bills. Schedule a site visit, secure your place in the installation queue, and — if you’ve been on the fence — make 2025 the year you let the Arizona sun work for, rather than against, your wallet.
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