SAN DIEGO, Calif. (KGTV) — President Trump's tax and spending bill, known as the "One Big Beautiful Bill," is cutting short the timeline for homeowners to claim thousands of dollars in clean energy tax credits. The rebates, originally set to last for seven more years, will now end this December.
Homeowners like Alex Dam of Rancho Bernardo are feeling the impact of this policy change. Dam recently installed a new heat pump to replace his 16-year-old system, saving money in the process.
"It was $20,000. The gas AC was gonna be $25,000," Dam said.
When Dam files his taxes next year, he could receive up to $2,000 back through tax credits established by the Inflation Reduction Act of 2022.
"It's great. It's one of the reasons I went with a higher-end system," Dam said.
Dam, who is about to retire, had been planning additional clean energy upgrades for his home that would have qualified for tax credits. Now those plans have changed.
"I will probably wait for a water heater pump, which is one of the next things I was gonna get. But without the rebate, those are too expensive for me," Dam said.
The Inflation Reduction Act of 2022 had set aside billions in rebates and tax breaks for homeowners upgrading to clean energy systems like heat pumps, insulation, EV chargers, and solar panels. President Trump's new legislation eliminates these incentives.
The president says the change will save more than $500 billion in federal spending over the next decade. He also argues that the green energy push was costing too much and undermining oil and gas sources, which he believes are more reliable.
Dam says his neighbors are now rushing to make improvements before the December deadline.
"So this year will be probably a banner year for energy improvements, while next year will probably be a desert for energy improvements," Dam said.
Brad Gastineau, a tax partner at GPW Certified Public Accountants, recommends that homeowners act quickly, especially for solar installations.
"I'm suspecting that solar is going to be very difficult," Gastineau said.
Solar panels qualify for a 30% tax credit if they're operational by the December deadline. However, Gastineau advises consulting with an accountant before making any purchases.
"You need to have a tax liability in order to benefit from that credit," Gastineau said. "Depending on household income, they may find out they don't qualify for the tax credit and maybe they get a smaller unit. But if, for whatever reason, you don't benefit from this tax credit, it may not be quite as good a deal as you thought at the beginning."
Gastineau said with the clientele he's been assisting, he's seen property owners spend anywhere between $ 50,000 and $150,000, depending on the property.
"The biggest impact is going to be the solar panels because that's obviously a very high-dollar piece of equipment to install in a house," Gastineau said. "Now we're talking less than six months, so everybody's going to be rushing to get solar panels put on, and it has to be fully installed and operating to get the credit. So I definitely would recommend jumping on it now."
