The End of the ITC is Sooner Than You Think

Placed In Service by 2027: What That Actually Means for Your Project

While the July 4th safe harbor deadline has passed, there is still time for businesses to claim the Investment Tax Credit (ITC).  

California businesses realistically have about three months left to commit to a commercial solar project and have a chance to still claim the 30% federal Investment Tax Credit. 

The ITC Expiration Timeline: What changed

The One Big Beautiful Bill Act, passed July 4, 2025, replaced the old multi-year phase-out with two key dates.

The first has already passed. Projects that began construction on or before July 4, 2026 are not subject to the accelerated deadline and have roughly four years to be placed in service provided there is continued construction progress. 

If you did not meet the July 4th deadline, your system must be placed in service by December 31, 2027 to be eligible for the credit. Realistically, this means signing and starting work no later than October 31st, 2026.

Of course every project is unique, but after October, it becomes much harder to start and finish a project by the placed-in-service deadline. After December 31st 2027, the 30% commercial solar tax credit and 10% adders expire. That means the net cost of a commercial solar system will increase by 30-50%.

Placed in service comes at the end of a long process

Installing a commercial solar system is a complicated process. These projects are complex with multiple stages including:

• Engineering and system design
• Utility interconnection application and study
• AHJ permitting and plan check
• Equipment procurement
• Construction and commissioning
• Final inspection and utility signoff

A typical commercial project in California, runs about 9 months from signed contract to placed in service. Interconnection is usually the longest step, and it is the one nobody controls. Each utility company is a bit different, with different turn around times.  However, "Placed in service" means the system has the capability of producing energy, and PTO can often come later.  

To be placed in service by December 31, 2027, our deadline at TENCO SOLAR is that projects need to be under contract by October 31, 2026. 

Timelines will also get tighter as more projects race the same deadline. Equipment lead times stretch, crews book up, and interconnection queues grow.

What is still available

For projects that make the window:

• 30% base ITC on total system cost
• 10% Bonus adders for domestic content, energy communities, and qualifying low-income projects. Most zip codes in California qualify as an energy community.
• Accelerated depreciation under MACRS, which for many businesses is worth nearly as much as the credit
• Direct pay for nonprofits, schools, and government entities that do not pay federal taxes. 

Battery storage is on a separate schedule and stays eligible for 48E into the 2030s.

The best time to go solar is now.

There’s never been a better time to go solar. California energy rates are rising fast, and the largest federal offset against solar cost has a fixed end date. Solar remains one of the few ways to stabilize energy costs for businesses that use a lot of power.  

Next steps

Each project is unique in terms of eligibility. Contact TENCO SOLAR today at 888-507-6937 for a detailed breakdown of the tax credits available for your project.

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