Major 2025 Tax & Energy Credit Updates for Electrical Businesses

By Yulia Sharapova, Founder, Sharapova & Co. 

Turning Tax Complexity into Business Gains 

I just got back from NATP Taxposium 2025 in Las Vegas, where some of the biggest updates to tax and energy incentives were discussed — and these changes will directly impact electrical and renewable businesses. 

At Sharapova & Co., we focus on helping electrical companies grow smarter, keep more of what they earn, and plan ahead for what’s coming next. 

Here are my 3 biggest takeaways that matter for your business right now: 

  Solar and Clean Energy Credits Are Changing Fast 

The One Big Beautiful Bill, signed into law on July 4, 2025, is accelerating the phaseout of solar and clean energy credits. 

Key updates: 

• The 30% residential solar tax credit ends entirely on December 31, 2025 — with no phase-out period. 

• Clean electricity production and investment credits for solar and wind projects are also being phased out faster. 

• Projects placed in service after 2027 generally won’t be eligible unless construction begins before July 4, 2026. 

• Other technologies like geothermal and hydropower will follow their original schedules. 

• New restrictions are being placed on projects tied to foreign entities of concern, which may affect eligibility. 

What’s still available (for now): 

Commercial and rental property owners can still benefit from solar, battery, and energy-efficiency upgrades. 

Certain energy projects still qualify for financial incentives — but rules are stricter and more documentation is required. 

Some businesses can still combine incentives with bonus depreciation — helping offset the cost faster. 

What’s changing: 

Special “bonus” credits (based on project location or labor requirements) are phasing out or harder to qualify for. 

Eligibility and documentation are more closely scrutinized — it’s not just about installing panels anymore. 

Mistakes in ownership, use, or documentation can now trigger repayment — especially if the property is sold or converted to personal use within five years.  If you don’t meet the holding period, the IRS can claw back a portion of the credit. 

Planning is urgent. While an investment credit still exists, the window is narrowing. We've seen businesses lose out on credits — or even have to repay them — if they sell or change the property’s use within five years of installation. 

If you're considering solar or energy upgrades, now is the time. 

Big Tax Changes Are Coming in 2026 — But There's Good News 

Several provisions of the 2017 tax reform will expire after 2025 — meaning higher tax rates and fewer deductions for many business owners. 

The good news: Under the new One Big Beautiful Bill Act (OBBBA), 100% bonus depreciation is permanently reinstated. 

This allows you to immediately deduct the full cost of most eligible property in the year it’s acquired and placed in service. 

Key benefits: 

• Immediate tax savings in the year of purchase 

• Encourages investments that improve productivity and cash flow 

• Permanent rule change — making long-term planning easier 

Combined with a higher Section 179 expensing limit, this is a great time to review capital investments and entity structure, especially if you're operating multiple LLCs or S-Corps. 

  IRS Scrutiny Is Increasing 

A clear theme from NATP Taxposium: The IRS is stepping up enforcement. 

Important notes: 

• ERC claims are under heavy review. Many businesses are being audited, and improper claims could result in repayment + penalties. 

• High-income businesses are in the spotlight. Companies with multiple LLCs or multi-state operations are seeing more audits. 

• State tax agencies are also increasing enforcement for sales tax, payroll, and income tax across borders. 

🔎 However, the situation is nuanced: 

• IRS audits increased in 2024 for high-income earners and complex partnerships. 

• Audit rates for lower- and middle-income taxpayers remain historically low — and aren’t expected to rise. 

• Future audit capacity is uncertain due to hiring freezes and workforce cuts. 

Bottom line: High-income businesses face more scrutiny now, but the long-term outlook is less clear. Strong compliance and clean records are more important than ever. 

Conclusion 

The tax and energy landscape is shifting quickly — with both time-sensitive opportunities and heightened regulatory pressures. Electrical companies positioned for growth must now be equally prepared for change. 

Understanding how new legislation impacts your business is no longer optional. From sunsetting energy credits to permanent depreciation updates and increased IRS attention, these developments should shape how you invest, plan, and protect what you’ve built. 

Staying informed and acting early will make the difference between reacting and leading.