Summary
- Commercial solar projects a shrinking window of time to capture the 30%-60% ITC before it’s gone.
- Companies can reach the “Safe Harbor” point in the project in this time and install later.
- If the current bill passes Congress by July 4 as planned, 60 days start then.
- Act quickly to allow time for design, engineering, and procurement.
The commercial solar landscape in the U.S. is facing a major financial turning point — and if commercial energy users don’t act quickly, they could lose out on significant investment tax credits (ITC) that have long made solar such a smart business decision.
A new federal budget bill has just cleared the U.S. House of Representatives and is expected to be signed into law by July 4, 2025. This legislation accelerates the phase-out of the Federal Investment Tax Credit for solar projects — a move that could cost your company from 30%-50% of project value if action isn’t taken soon.
Why This Matters Now
If the bill passes in its current state, only projects that begin construction within 60 days of enactment will be eligible for the full ITC. Additionally, these projects must be placed in service by December 31, 2028. That gives your business a narrow window to preserve the economic viability of your commercial solar investments.
Without the ITC, here are how economics could be impacted:
– 3 year paybacks increase to 6.5 years (for 50% ITC)
– 4.8 year paybacks increase to 10 years (for 40% ITC)
– PPA Prices increase substantially increase 50%-100%
The Safe Harbor Strategy: Your Best Move
Fortunately, there’s still a path to secure your project savings: the IRS-approved Safe Harbor provision. By contracting your solar project and ordering modules representing at least 5% of your total project cost, you can lock in today’s full tax credit rate — while buying time to kickoff construction in the coming years.
This is a common and proven strategy many solar companies and commercial clients have used during previous ITC phase-down periods. But it requires immediate planning.
To meet the Safe Harbor deadline, contracts need to be executed in the next 1–2 months to allow time for design, engineering, applications for utility and permit approvals, and procurement. Missing this opportunity could fundamentally alter your project’s financial outlook.
The Bottom Line
Commercial solar has never been just about sustainability — it’s about smart economics. Losing access to the full ITC can reduce project ROI, delay break-even points, and increase long-term costs.
At OnSwitch, we are fully prepared to help businesses like yours fast-track the solar process, meet Safe Harbor requirements, and protect your investment. But we need to get started now.
What You Can Do Today
1. Start internal approvals for your solar project immediately. Engage relevant teams and department heads as soon as possible.
2. Schedule a consultation with OnSwitch to begin design and procurement (Schedule a Meeting). We are here to answer all your questions and are fully prepared to get your company to Safe Harbor and save your investment.
3. Contact your local Senator or Representative to voice support for maintaining the ITC. Join the movement and make your voice heard here.
Don’t let a policy shift erase 25 years or more of potential savings from generating solar energy. Let’s preserve your solar future — while there’s still time.
Disclaimer: Please consult your tax accountant to verify benefits and strategies particular to your organization. OnSwitch is not a tax advisor.
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