What’s next for residential solar financing as 25D expires?

<h2 class="wp-block-heading has-medium-font-size" id="h-in-a-new-power-forward-episode-baywa-r-e-s-josh-tinaglia-breaks-down-tax-credit-changes-tpo-loans-and-why-installers-should-take-a-deep-breath-before-2026">In a new Power Forward episode, BayWa r.e.’s Josh Tinaglia breaks down tax credit changes, TPO, loans, and why installers should take a deep breath before 2026</h2>

<p>When the residential solar Investment Tax Credit under Section 25D <a href="https://solarbuildermag.com/news/trump-guts-solar-tax-credits-in-obbba-and-hints-at-more-executive-actions/">sunsets at the end of 2025</a>, it will reshape how installers sell, finance, and deliver projects. In the latest episode of <em><a href="https://solarbuildermag.com/power-forward/">Power Forward</a></em> — Solar Builder’s video and podcast series in collaboration with <a href="https://www.baywa-re.com/en">BayWa r.e</a>. — Editor-in-Chief Chris Crowell sat down with Josh Tinaglia, finance program manager at BayWa r.e., to unpack what’s changing, what’s uncertain, and how installers can stay competitive.</p>

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<p><strong>Topics include:</strong></p>

<ul class="wp-block-list">
<li> What the 25D tax credit sunset means for installers and homeowners </li>

<li>Why third-party ownership (TPO) will play a bigger role starting in 2026</li>

<li>Questions to ask your TPO providers</li>

<li>The outlook for solar loans, dealer fees, and new finance products</li>

<li>Prepaid leases and transferability of tax credits </li>

<li>The uncertainty of FEOC rules and domestic content requirements </li>

<li>The impact of cancelled programs like Solar for All and the Greenhouse Gas Reduction Fund</li>
</ul>

<p>Watch the full episode above (and <a href="https://www.youtube.com/@SolarBuilder">subscribe to our YouTube channel</a>). You can also listen to this as a podcast on <a href="https://podcasts.apple.com/us/podcast/solar-builder-radio/id1776180852">Apple Podcast</a> | <a href="https://open.spotify.com/show/2FwoGZBQbTJ86ouUTZvO4a?si=7d17469c23634832">Spotify</a> | <a href="https://music.amazon.com/podcasts/1c027ae7-baf9-418c-a33f-cd9257f2b715/solar-builder-radio">Amazon</a> | <a href="https://ccrowell.podbean.com/e/solar-financing-after-25d-what-installers-need-to-know-for-2026-power-forward/">Podbean</a>. Below are some key quotes.</p>

<h3 class="wp-block-heading">“There’s panic … but also optimism”</h3>

<p>Installers are riding two waves at once: a surge in sales as customers rush to lock in the 25D credit, and anxiety about what comes after.</p>

<p>“That is such an important question,” Tinaglia said when asked whether contractors are panicked. “All installers right now are either at a place where they’ve had record months, record quarters … but that doesn’t change what happens December 31. There’s panic because no one knows. The crystal ball is telling each and every one of these installers: where do I go next?”</p>

<h3 class="wp-block-heading">Solar loans aren’t going away</h3>

<p>With tax credits shifting to third-party ownership (TPO) deals starting in 2026, many assume customer-owned loans will dry up. Not so, Tinaglia said.</p>

<p>“Dealer fees are probably going to start to go away,” he noted. “We’re going to see a lot more lenders coming out with new products … maybe longer-term loans to try and compete with TPO, to compete with utilities. There’s still a place for loans. There are always going to be homeowners who are adamant about owning the system.”</p>

<h3 class="wp-block-heading">TPO opportunities — and risks</h3>

<p>The survival of residential leasing and prepaid lease models will be central in 2026. But Tinaglia urged caution when selecting partners.</p>

<p>“You want to make sure you’re not getting in there with someone who’s going to be a bankruptcy risk,” he said. “Ultimately you have to serve your customers. Trust but verify … If you’re going to put all of your money in that bag, be mindful of how they’re sourcing their funds.”</p>

<p>He also advised installers to maintain multiple finance relationships. “It does not hurt to have three or four finance tools in your back pocket … because ultimately if one falls out, you have someone you can call onto the field.”</p>

<h3 class="wp-block-heading">Policy uncertainty adds more complexity</h3>

<p>Beyond 25D, installers must watch two other developments: FEOC sourcing rules for batteries and modules, and the collapse of federal programs like Solar for All and the Greenhouse Gas Reduction Fund.</p>

<p>“Those rules will start to get drafted in the first half of next year,” Tinaglia said of FEOC. “That is a huge challenge if you’re an investor trying to figure out your tax equity piece … Now, it adds a lot of uncertainty.”</p>

<p>The loss of Solar for All funding, he added, will hit contractors serving low-income households especially hard. “If your business model was to focus on those low-income households and now that rug has gotten pulled out from underneath you, that’s absolutely going to hurt your business.”</p>

<h3 class="wp-block-heading">Finding resilience in a shifting market</h3>

<p>Despite the challenges, Tinaglia closed on a hopeful note: “We’re in the solar industry. Resilience is one of our key benefits. Now we’ve got to learn to do it ourselves. It’s going to be maybe a hard 2026, but those that figure it out might prosper and have better years than they did previously. Positions like this make innovation happen.”</p>
<p>-- Solar Builder magazine</p>