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

 

House Resolution 1 (“H.R.1”), signed into law on July 4, 2025, introduces 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 offers a substantial financial resource for clean energy projects, providing at least 6% of the total project cost (and at least 30% for projects meeting federal prevailing wage requirements) back as a tax credit.

Projects located in low-income communities, serving low-income communities or public housing, or using a high share of domestic content could increase that credit to up to 70% of total project cost. When combined with other incentives such as those offered through Illinois Power Agency (IPA) programs and procurements, these tax credits make clean energy investments significantly more affordable and accessible.

Since the window to lock in contracts, get quotes, and schedule installations is now compressed, the IPA encourages those considering investing in solar to act quickly in order to have a better chance of benefitting from the tax credits before they expire.  Delays could lead to either having to meet additional requirements or more aggressive installation timelines, or to missing the opportunity for the credit entirely.

 

  • Residential Solar Projects (owned by the resident): Only projects that begin construction by December 31, 2025, will remain eligible for federal clean energy tax credits.
  • Commercial Solar Projects: Projects commencing construction on or after January 1, 2026, will face additional eligibility requirements, including foreign entities of concern and placed-in-service date. All federal clean energy tax credits under H.R.1 are scheduled to expire after 2027. This includes projects located on a residence but owned by a commercial entity (benefitting the resident through a lease or PPA).

 

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

While federal incentives are ultimately being phased out, Illinois remains firmly committed to advancing a clean energy future. 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.

The IPA’s mission remains unchanged: to build an equitable clean energy future for all Illinoisans.

 

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

IPA Educational Webinar:

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

Date: September 26, 2025

Time: 12:00-1:00 p.m. CT