Navigating H.R.1: Resources for Residential and Commercial Solar Projects

House Resolution 1 (“H.R.1”), signed into law on July 4, 2025, introduced significant changes to clean energy tax credits previously available under the Inflation Reduction Act. These changes have implications for clean energy customers, developers, and communities across Illinois.

The clean energy tax credit provides a substantial financial resource for certain clean energy projects, making clean energy investments significantly more affordable and accessible. It is important to be aware of how these changes could affect your solar project.

IPA Educational Webinar Resources

The One Big Beautiful Bill Act—What it Means for Clean Energy, Tax Credits, and the Road Ahead

Changes

Residential Solar Projects:

(owned by the resident)

Only projects that completed construction by December 31, 2025, are eligible for federal clean energy tax credits.

Elective Pay:

H.R.1 introduced significant changes to clean energy tax credits made available under the Inflation Reduction Act, including those that can be claimed via Elective Pay. If you are an eligible entity or Approved Vendor (AV) interested in IPA’s resources on Elective Pay, please contact the IPA. Additional information is available at the IPA website’s Elective Pay page.

Commercial Solar Projects:

(including projects located on a residence but owned by a commercial entity, benefitting the resident through a lease or PPA)

Projects that began construction before July 4, 2026, have up to four years to be completed. Projects that began construction on or after July 4, 2026, must be placed-in-service by December 31, 2027

Projects commencing construction on or after January 1, 2026, will face additional eligibility requirements, including foreign entities of concern restrictions .

All federal tax credits for wind and solar under H.R.1 expire after 2027.

While federal incentives for solar projects are ultimately being phased out, Illinois remains firmly committed to advancing a clean energy future. The IPA’s mission remains unchanged: to build an equitable clean energy future for all Illinoisans.

Illinois’ two solar incentive programs, Illinois Shines and Illinois Solar for All, are state-funded and independent of federal programs. These programs will continue to make clean energy more accessible and affordable for households, businesses, and communities across Illinois.

To alleviate the known challenge of the lost availability of the federal Investment Tax Credit (ITC) for Small DG customer-owned projects, a $20/REC adder for customer-owned Small DG projects will be available during the 2026-27 Program Year. “Customer-owned” refers to a project where the Approved Vendor’s customer owns the project rather than leasing or executing a Power Purchase Agreement.

A project will be eligible only if: (1) it is a Small DG category project, (2) it is identified as customer-owned when approved through the Part I application process, (3) the Approved Vendor demonstrates that the customer contract is for customer ownership (i.e. not a lease or some other arrangement), and (4) the Approved Vendor demonstrates that the project has not received or will receive an ITC or residential clean energy tax credit.

To learn more please see this announcement on the Small DG Customer-Owned REC Adder.

Relevant Educational Resources on H.R.1 for Residents and Businesses:

To help stakeholders stay informed about these changes, the IPA has compiled the resources below. Please note that the Agency does not manage federal clean energy tax credits and cannot provide tax advice or guidance. Consult a tax professional to make sure your project qualifies under H.R.1 rules and guidance.