From Green Light to Red Tape: What the End of Federal Solar Tax Incentives Means for Hawaii Homeowners

With the recent signing of the “One Big Beautiful Bill,” or OBBBA, major changes are underway that will reshape how federal tax incentives for solar and battery storage work—especially here in Hawai‘i. If you’re a homeowner considering solar, the clock is ticking to take full advantage of the tax credit before it goes away permanently.  

Here’s what you need to know:

President Trump signed OBBBA into law on July 4th, 2025, which ends the 30% residential solar tax credit (ITC) on December 31, 2025—nearly a decade ahead of schedule. 

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The 25D Homeowner Solar Tax Credit Is Going Away

If you’re a homeowner planning to own your solar system outright (cash or loan financing), this is the most urgent update: 

  • The current 30% tax credit (Section 25D) is only available for residential solar and battery systems installed before December 31, 2025. 
  • After 2025, no federal tax credit will be available for new homeowner-owned systems under the new legislation. 

For example, a $50,000 solar-plus-battery system would qualify for a $15,000 federal tax credit.  The tax credit helps accelerate the return on investment for home solar by about 3 years on average in Hawaii.   

Takeaway: If you’re considering solar for your home, you need to act now. Projects must be under contract and installed before the end of 2025 to qualify for tax credit and save thousands. If you wait or delay and miss the window, the ITC will no longer be available. 

With the current availability of the Federal Tax Credit, the Hawaii State Income Tax Credit, and the new BYOD+ rebate program from HECO, the next few months are going to be the best and most affordable time to go solar for the foreseeable future; the cost of waiting is real and measurable.  

The industry expects a surge in demand with this deadline fast approaching.  We recommend that customers act now to avoid potential bottlenecks with supply chains and permitting timelines that are anticipated in late 2025.  

What You Can Do Now 

  1. Get a free solar quote now to see how much you can save before the 30% Federal solar tax incentive disappears. 
  2. Start your project by fall 2025 to allow time for permitting and installation before the December 31 deadline. 
  3. Ask about battery storage—the 30% credit applies to batteries too. 
  4. Talk to your tax advisor to confirm how the credit will apply to your personal situation.