The new tax bill, known as the One Big Beautiful Bill Act, could significantly impact the solar industry by potentially repealing or significantly limiting tax credits for solar projects. Specifically, the bill would end the 30% tax credit for residential solar installations and potentially restrict or eliminate investment tax credits (ITCs) for new solar projects. This could lead to a decrease in solar installations and job losses in the industry.
Here's a more detailed breakdown:
Residential Solar Tax Credit:
The bill could remove the 30% federal tax credit for homeowners who install solar rooftop systems. This is a major incentive that has helped drive down the cost of solar for consumers.
Investment Tax Credits (ITCs):
The bill could deny section 48E investment tax credits to solar companies on new rooftop systems and solar hot water heaters that they install and lease to customers after this year. It also potentially limits or removes ITCs for larger solar projects that begin construction more than 60 days after the bill's enactment.
Construction Deadlines:
Projects that begin construction within 60 days of the bill's enactment must also be placed in service by December 31, 2028, to remain eligible for the tax credit.
Impact on Industry:
The bill could lead to a significant decline in the residential solar industry, with some analysts suggesting it could effectively end the industry as it currently exists. The changes could also impact the job market, potentially leading to job losses in the solar sector.
Potential for Reduced Investment:
The removal or limitation of tax credits could lead to a decrease in investment in clean energy projects, including solar, potentially slowing down the transition to renewable energy.