Solar Power Adoption Surges Among Homeowners as Federal Tax Break Nears Expiration

In the heart of the American solar industry, concerns are mounting as the deadline for the federal tax credit approaches. The 30% tax credit, a key driver for residential solar systems, was eliminated nearly a decade early under President Donald Trump's 2017 tax law.

Montana Busch, founder of Alternative Energy Southeast, expresses his concern about the impact of the government's actions on his industry. Busch's solar company, established in 2007, has seen a record number of project sales in the past few weeks, a surge driven by homeowners racing to install solar panels before the tax credit ends.

The looming deadline has caused demand to jump "three to fourfold overnight" for Busch's company. Nationwide, about 280,000 people worked in the solar industry in 2023, according to the Interstate Renewable Energy Council. However, one in four solar installers are considering leaving the industry due to the ending of the federal tax credit.

The solar industry is navigating not just the ending of the tax credit, but also tariff swings and the fragile rollout of the $7 billion federal program Solar For All. The program, meant to expand solar access, had a strong demand launch in Georgia, but its long-term future is uncertain.

EnergySage, a company that connects homeowners with solar installers, reports a 59% increase in registrations from prospective customers from June to July. Emily Walker, director of content and insights at EnergySage, states that the company has seen its biggest weekly registration numbers since its founding in 2014.

Despite the challenges, Busch believes the 30% federal tax credit provided a means for him to build his business from the ground up. Third-party leasing companies can still claim the 30% tax credit through 2026, but homeowners cannot. This disparity poses a significant challenge for businesses like Busch's to manage their growth.

More than 90% of solar installers surveyed by EnergySage believe that losing the federal tax credit would harm their business. Busch perceives the government as being against the solar industry, with nearly two-thirds of solar installers expecting "dramatic harm" from the ending of the federal tax credit.

The coming year could determine whether the solar industry boom continues or comes to an end. As the industry navigates these challenges, it remains to be seen how the solar energy landscape will evolve in the United States.

Solar Power Adoption Surges Among Homeowners as Federal Tax Break Nears Expiration