If you’re considering a Power Purchase Agreement (PPA) or Roof Lease to go solar — especially to comply with BEPS requirements in DC, Montgomery County, or Maryland — there’s a narrowing window to take advantage of the full federal solar tax credit. Here’s what you need to know:
The 30% Solar Tax Credit Is Getting Phased Out
The recently passed “One Big Beautiful Bill” significantly shortens the timeline to qualify for the 30% Investment Tax Credit (ITC) for solar projects.
Here’s what the law now requires:
- Projects must begin construction by July 4, 2026, or
- Be placed in service by December 31, 2027
If your project misses both of those milestones, it likely won’t qualify for the 30% tax credit — and may not qualify for any federal credit.
Timing Is Now Unclear (But Here’s What We Do Know)
While those dates are in the legislation, we’re still waiting on key Treasury guidance that’s expected by August 21, 2025. This guidance will clarify:
- What officially counts as “under construction”
- Early indications suggest it’ll be stricter than the current 5% safe harbor rule
- How new Foreign Entity of Concern (FEOC) rules will impact project eligibility
- These rules are designed to limit Chinese-made components and influence in solar development
Until that guidance is released, there is no firm way to guarantee that solar projects started in 2026 will qualify for the full tax credit.
**Many solar providers are treating December 31, 2025 as the last safe deadline to sign contracts under current ITC conditions.**
Why This Matters for PPAs & Roof Leases
Third-party solar developers (the ones offering PPAs and roof leases) rely on the 30% ITC to make project financing pencil out. Here’s how a reduced or missing tax credit affects your offers:
- Significantly higher PPA rates in DC (or none at all)
- For example: DC PPA rates could increase from 0¢ / kWh to 8-10¢ / kWh
- Lower roof lease payments in DC (or none at all)
- Fewer financiers bidding, especially in more challenging jurisdictions
In Maryland especially, where the economics for third-party solar are already tight, some providers may stop offering PPAs or leases altogether if the ITC drops.
Want to Preserve the 30% Credit? Sign Before Year-End
While the legislation technically allows you until mid-2026 to begin construction, you should move before December 31, 2025 if you want:
- The most favorable financing terms
- A wider pool of bidders
- Less risk from future regulatory changes
In a BEPS Jurisdiction? Solar May Be Part of Your Compliance Plan
If you’re in DC, Montgomery County, or Maryland, you may be subject to Building Energy Performance Standards (BEPS).
Solar may be one of your most feasible and affordable Energy Conservation Measures (ECMs) to avoid penalties. If that’s even a remote possibility:
- It makes sense to secure solar while the 30% ITC is still in place
- Waiting could cost you tens or hundreds of thousands in missed incentive value
TL;DR: What You Should Know
- The 30% ITC is not gone yet — but the clock is ticking
- We’re still waiting for federal guidance, but it might arrive too late to help 2026 projects
- If you act before the end of 2025, you can still qualify under current rules
- If you need solar for BEPS compliance, the sooner you start, the better
Honeydew’s Role: Bringing the Market to You
We don’t install solar — we help you get the best deal by:
- Running a competitive bidding process across vetted solar developers and financiers
- Securing multiple offers for your PPA, roof lease or fully owned system.
- Breaking down the pros and cons of each proposal so your board or management can make a confident decision
We’ve helped dozens of buildings go solar — and right now, our job is to help you beat the clock. The solar opportunity is still golden — but the door is closing fast. Want our help navigating the chaos? That’s what we ‘dew!