Home / News / What’s Next as the Residential Solar Tax Credit Phases Out?

As 2025 draws to a close, the federal solar Investment Tax Credit (ITC) for residential systems is set to expire, leaving many Central Oregon homeowners wondering: is solar still a smart move?

The answer remains a resounding yes, perhaps now more than ever.

While the 30 percent residential solar tax credit has been a powerful driver for solar adoption nationwide, it’s important to remember that the strongest case for going solar in Central Oregon is not just about incentives. It’s about protecting yourself from rising utility rates, locking in energy costs, and gaining long-term resilience and stability for your household budget.

The Value of Solar Doesn’t End with Tax Credits

For years, the residential solar tax credit reduced upfront costs by nearly a third, making solar a highly attractive investment for thousands of families across the state. Yet, as we shift into a post-tax-credit era, Central Oregon’s solar economics still pencil out favorably, especially as Pacific Power and local electric co-op rates are on the rise.

The financial return for residential solar has always depended on long-term savings and energy independence. Typical payback periods for a Central Oregon system, factoring in local rates and modest utility inflation, remain about seven to nine years (and that’s even with the federal tax credit going away).

After this change, you can expect payback to lengthen by about one to three years (depending on the size of the system you install). However, warranties often last 25 years or more, leaving plenty of time for ongoing savings and reliable solar power, generated right on your property.

Local Incentives Make a Big Difference

Here’s where Central Oregon homeowners get an extra advantage: the Energy Trust of Oregon offers cash-back incentives that lower the upfront cost of residential solar and battery storage, and these are more substantial than in years past.

Beginning in 2026, you may be eligible for a $2500 solar incentive, depending on your utility, along with a storage incentive of $4,000 or $5000, through Portland General Electric or Pacific Power, respectively. These local incentives help soften the impact of losing the federal credit and make solar surprisingly affordable for more families in Central Oregon.

As an Energy Trust trade ally contractor, E2 Solar is up to date on equipment that meets qualifying standards, and we are happy to answer your questions about these incentives.

Storage Makes Solar Even Smarter

As time-of-use pricing and wildfire-related outages become more common in Central Oregon, battery storage is growing in popularity. A solar + storage setup lets you avoid expensive peak-hour electricity and weather power outages with confidence. Depending on your utility company, every kilowatt-hour you generate and use or store for use later directly could reduce what you pay for energy use.

By maximizing how you consume your solar energy, you not only gain greater independence from the grid, but also protect yourself from rising utility rates. Energy security and bill savings go hand in hand.

The Sun Continues Shining in Central Oregon, With or Without the Residential Solar Tax Credit

Ultimately, federal tax credits may be subject to changing administrations, but the fundamentals remain unchanged: Central Oregon’s abundant sunshine, rising energy prices, and attractive Energy Trust incentives keep solar as compelling as ever.

We recommend that you don’t wait for rates to climb higher. Now is a great time to consider solar or solar + battery storage for your home, or to encourage friends and family to request a quote.