What to Know About the Commercial Solar Tax Credit in 2025?

Introduction to the 2025 Commercial Solar Tax Credit

The cost of powering a business is rising every year, and many companies are now considering solar as a practical solution. For those thinking about a commercial solar installation, one of the most valuable opportunities in 2025 is the federal Investment Tax Credit, or ITC.

This credit allows businesses to reduce their federal tax bill by claiming a percentage of their solar project’s cost. It’s one of the strongest incentives for companies looking to cut energy costs and improve their bottom line. But there’s a catch: the rules have changed, and deadlines are approaching.

With the 2025 Reconciliation Bill now in effect, the window to take full advantage of the ITC is shorter than before. The sooner a business starts the process, the more likely it will be to lock in the maximum benefits.

Table of Contents

1. Understanding the Investment Tax Credit (ITC)
2. How the 2025 Reconciliation Bill Changes the Game
3. Why Acting Now Can Protect Your Energy Costs
4. The Bottom Line
5. FAQs

Understanding the Investment Tax Credit (ITC)

The ITC has been a driving force behind the adoption of solar in the commercial sector for years. In simple terms, it lets businesses deduct a portion of their solar installation cost from their federal taxes. The deduction has typically been between 30 and 50 percent, depending on project details and timing.

What makes the ITC so effective is its ability to combine with other incentives. State-level tax credits, utility rebates, and depreciation benefits can stack together, creating a much larger financial impact. Many of Rocknoll Energy Systems’ clients have seen exceptional results from this combination.

For example, a manufacturing facility in Utah completed a large solar project and saw a full payoff in under a year. That system is expected to generate $2.9 million in savings over its lifetime. In Kansas, another facility will save more than $1.6 million, thanks in part to the ITC lowering upfront expenses. Even small businesses have seen major wins, like an Indiana glass company that paid off its solar system in less than 12 months and now saves over $2,000 annually.

These cases show how powerful the ITC can be when timed correctly and paired with expert planning. But with the new 2025 bill in place, businesses will need to pay attention to new rules to avoid losing this advantage.

How the 2025 Reconciliation Bill Changes the Game

Signed into law on July 4, 2025, the 2025 Reconciliation Bill, sometimes called the Big Beautiful Bill, has brought two major changes for businesses planning a commercial solar installation.

First, the deadline for claiming the full 30 percent ITC is now December 31, 2027. Projects that are completed after January 1, 2028, will not receive any ITC at all. This is a sharp departure from previous phase-out schedules, where the credit was reduced gradually over several years.

Second, 100 percent bonus depreciation has returned. This allows a business to deduct the full value of its solar system in the first year. Even better, this can be combined with the ITC for a much greater tax benefit. In practical terms, this means a company could cover a large percentage of its installation cost through tax savings alone, right from the start.

These changes put a premium on timing. Businesses that act now can secure the full benefits, but waiting until the last minute risks delays from equipment supply chains, contractor scheduling, or permitting. Missing the 2027 deadline would mean losing both the ITC and the bonus depreciation opportunity, which together can save a business hundreds of thousands, or even millions, of dollars.

Why Acting Now Can Protect Your Energy Costs

The financial benefits of the ITC are only part of the story. Rising energy costs are another big reason to consider solar sooner rather than later. Reports from 2025 show that U.S. electricity demand is projected to increase by 78 percent by 2050. Meanwhile, the country’s energy infrastructure is expected to deliver 340 gigawatts less capacity by 2032. The gap between supply and demand means prices are likely to keep going up.

The numbers are already telling the story. Businesses in Indiana saw a 14 percent rate increase from Duke Energy this year. In Virginia, Dominion Energy proposed a similar 14 percent hike. PJM market forecasts show that commercial users could see their rates jump by as much as 29 percent. Nationally, commercial electricity rates are 28 percent higher today than they were ten years ago.

For many companies, these rising rates are eating into profit margins. Solar offers a way to take control. Once installed, most of the electricity a system produces is essentially free. That stability protects a business from unpredictable utility rate changes. It also makes long-term financial planning easier because energy costs become more predictable.

By combining lower energy bills with the ITC and bonus depreciation, businesses can shorten their system’s payback period and enjoy savings much sooner. The result is a strong return on investment that keeps improving over time.

The Bottom Line

The 2025 commercial solar tax credit remains one of the best opportunities for businesses to save money and gain energy independence. But the window to claim it is closing. The deadline of December 31, 2027, means there’s less than three years to complete a project and secure the full benefit.

Rocknoll Energy Systems has helped more than 850 businesses across the country design and install solar systems tailored to their needs. Our team handles everything from system design to securing permits and finding every available incentive. We also run detailed financial analyses so you know exactly what to expect in terms of savings, payback period, and long-term returns.

If solar is the right fit, acting now ensures you can lock in the maximum tax benefits while avoiding the risk of future rate hikes. Every month you wait is another month of higher utility bills and another step closer to the ITC deadline.

Your business deserves a reliable, cost-effective energy solution. Let Rocknoll Energy Systems help you take the next step toward securing your energy future. Contact us today to see how much the 2025 commercial solar tax credit could save your business.

FAQs