Solar project execution requires early planning and adaptability

New federal rules are making it harder to qualify for solar tax credits, and that could affect what a home solar system costs and which equipment installers offer you. Under the One Big Beautiful Bill Act, solar systems now need to meet "foreign entity of concern" (FEOC) sourcing rules just to get the base 30% tax credit. Going further and using enough U.S.-made panels, inverters, and racking can qualify a system for an extra 10% "domestic content" credit. The catch: many popular panels and components on the market right now don't meet these thresholds, and the allowed share of parts from restricted countries shrinks every year. The law also ended the residential tax credit for systems bought with cash or a loan.

This is pushing the market to split into compliant and non-compliant equipment, with non-compliant gear sold cheaper but without credit eligibility. If a system later turns out to use non-compliant parts, the IRS can claw back tax credits years afterward, which is a real risk to know about if you're financing or paying cash for a system.

Because of this shift, third-party-owned systems — where a company owns the panels and typically claims the tax credit itself, often through a lease or power purchase agreement — are becoming more common, since they sidestep some of these headaches. That said, these deals aren't available everywhere; some states have few or no third-party options, leaving cash or loan purchases as the only route. One bright spot: battery storage tax credits are set to last through 2030, even as solar credits wind down, so batteries may remain a strong value even if panel credits get harder to claim.