Solar PPA Rates Could Rise 60% After June 30

The One Big Beautiful Bill Act in 2025 pushed up the dates when the federal tax credit for solar power at commercial scale would expire. On paper, the tax credit remains in place through the end of 2027. But in reality, solar projects can only take advantage of it with any confidence if they’ve started construction by June 30 of this year.

That’s because projects with a Beginning of Construction (BOC) date prior to an IRS safe-harbor deadline of July 4 are granted a full four years to complete and still qualify for the federal solar tax credit. Given the vagaries of today’s supply chain for solar panels, inverters, and other equipment, along with a tight labor market for solar installers, it will certainly take longer than usual to get solar arrays built and operating. Starting early enough to qualify for a four-year runway is the safest way to go.

Feeling lucky? Be careful. Projects started after July 4 can still qualify for the tax credit, but they must be completed by the end of 2027, giving such projects a maximum of 18 months to build, which is less than half the 48 months allowed for safe-harbored projects.

Few solar developers will want to push their luck by betting they can finish a solar project on such a short timeline in today’s market. The stakes are too high. Missing either federal deadline for completion, whether a year and a half or four years away, means that a solar project won’t quality for federal tax credits.

The shorter the timeline, the greater the risk of coming in late and coming up short. Very short.

Without the tax credits, solar projects will probably cost 50% or 60% more, an increase that will be passed along to the customer through higher rates for PPAs. This would make many solar projects too expensive to pursue.

Commercial solar developers are now scrambling to get customers started quickly enough to meet the safe harbor deadline. Allowing for office closings over the July 4 holiday weekend, that means starting construction on June 30. Working back from that date, our company is sharing the timeline below with our potential customers in the public sector where a city council, county board, or school board must approve project agreements. Businesses with a more streamlined decision-making process may be able to go faster.

2026 Beginning of Construction (BOC) Accelerated Success Path

As you can see, planning to start construction on June 30 means that schools, counties, and cities have to decide if they want to go solar through a power purchase agreement and then request a draft PPA contract by the beginning of April — which is next week.

In the long term, solar power will certainly become the world’s main source of energy. However, in the meantime, the loss of the federal tax credit will disrupt the U.S. market and raise the cost of commercial solar for the indefinite future. Despite some unknowns, it’s safe to say that now will be the cheapest time for a long time to go solar.