On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, officially eliminating the 30 % federal tax credit (ITC) for residential solar and battery systems after December 31, 2025. Previously, the credit had been scheduled to remain at 30 % through 2032 under the Inflation Reduction Act, but the new law moves the sunset forward by seven years.
Unlike previous proposals that included a multi-year phase out with a staged step-down process over the course of several years, the new law simply eliminates the solar and battery tax credit altogether beginning January 1, 2025.
Unfortunately, the solar tax credit is ending just as Arizona’s three largest utilities are pushing through sizable rate hikes. SRP’s increase takes effect this November, and both TEP and APS are seeking another 14 percent boost in 2026—only two years after APS’s previous rate hike in March 2024.
2025 is the last year to install solar—or add battery storage—and still claim the 30 % federal tax credit. To qualify, your system must be fully installed and commissioned by December 31, 2025. Even in a normal year this process takes months, and high demand will only lengthen contractor schedules and permitting backlogs, so starting NOW is essential.
Bottom line: if you’re considering solar or adding battery storage, don’t wait. The sooner you start, the better your chances of having everything installed and commissioned before the December 31, 2025 deadline.
Arizona Public Service (APS) has asked regulators for a 14 % residential rate increase that would add roughly $20/month to the average bill starting mid‑2026. This request comes just one year after APS’s previous rate hike in March 2024. KJZZ News
Tucson Electric Power (TEP) has filed for a 14 % residential increase that could take effect in September 2026—another sign that energy costs are headed one direction only.
Salt River Project customers will see an approved 2.4 % bump on November bills, with additional pricing proposals already moving through SRP’s public‐process pipeline.
APS resets its Resource Comparison Proxy (solar export credit) every September. This is the rate the utility pays solar customers for any excess solar energy sent back to the grid. The current credit of 6.857 ¢/kWh (Tranche 2024) expires September 1, 2025 with a new rate set to be 10% less if the yearly precedent set in 2018 continues to hold true.
Taken together, all of these changes make one thing clear: energy costs keep climbing, and Arizona’s summers are only getting longer and hotter. If you want to avoid being locked into rising utility rates, solar is the ONLY available alternative to grid power—and it’s unlikely to ever be more affordable than it is today.
With the 30 % federal solar tax credit ending after 2025, we expect a surge of last-minute projects that will strain contractor schedules, permitting offices, and utility inspection teams. Starting the process now is the only way to be sure your system is installed, inspected, and fully commissioned before the December 31, 2025 deadline—so reach out as soon as possible to secure your place in the queue.
Ready to lock in your 30 % tax credit and protect yourself from rising rates?
Contact us for a free quote or call 480‑689‑5000.