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You Make the Call - Nov. 26, 2025

Published:
By: NATP Staff
Two workers on a residential rooftop installing large solar panels, preparing the system for placement in service under updated energy credit rules.

Question: In 2025, Sam decided to install solar panels on his home. His installer explained that the One Big Beautiful Bill Act (OBBBA) had changed the rules for the residential clean energy credit. Under the terms of the contract, Sam paid in full before the end of 2025, but the installation was not scheduled to begin until January 2026. Can Sam claim the credit on his 2025 tax return? 

Answer: No. Although Sam prepaid for the solar panels, he cannot claim the credit. 

Under §25D, eligibility for the residential clean energy credit is based on when the property is installed and placed in service, not when it is paid for. Because Sam's solar panels will not be installed until January 2026, the system is not considered placed in service during 2025. Therefore, Sam cannot claim the credit on his 2025 tax return, even though he paid for the project in full before the end of the year. 

 Although OBBBA ends the credit for expenditures made after Dec. 31, 2025, §25D still requires the system to be installed and placed in service in the year the credit is claimed. The payment date does not determine eligibility; only the completion and placed-in-service dates do. 

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NATP Staff

The NATP team is dedicated to supporting tax professionals with expert insights, industry updates, and resources that help them serve their clients with confidence.

Information included in this article is accurate as of the publication date. This post does not reflect tax law changes or IRS guidance that may have occurred after the publishing date.