Impact of Investment Tax Credit Changes on Reach Code Development
On July 4, 2025, the One Big Beautiful Bill (H.R. 1) was signed into law, officially ending the 25D federal solar tax credit for homeowners on December 31, 2025. The expiration of this tax credit is likely to impact FlexPath reach codes, as the federal financial incentive reducing the first cost of investment for homeowners will disappear. This is expected to have the greatest impact primarily for jurisdictions in milder climate zones with lower cooling loads and for newer vintage homes.
For instance, looking at Chula Vista (CZ10) as an example, the number of points for the earliest vintage (pre-1978) home under its FlexPath score totals 39, with nearly 45% of the total points coming from solar PV options. For the 1992-2010 vintage category, the solar PV options account for 85% of the total available points.
While PV options may be less valuable to FlexPath approaches, they may still bring significant value in specific situations. The graph below illustrates FlexPath targets for all 16 Climate Zones with cost effective PV options.
The statewide Local Energy Codes team just published a Memo to the original Cost Effectiveness Study discussing this point as well as incorporating 2025 changes and the analysis findings into the online Cost Effectiveness Explorer.
For more information, or to discuss jurisdiction-specific circumstances, please contact info@localenergycodes.com.
