The House of Representatives passed a budget bill with last-minute amendments early Thursday morning that could spell doom for residential solar and significantly hamper large-scale solar. Changes from the first budget bill to this one would impact all solar markets.
Amended budget bill changes
- Prohibits solar leasing companies like Sunrun from collecting the ITC (48E)
- Removes phase-outs for ITC (48E) and PTC (45Y)
- Projects must begin construction within 60 days of enactment or be placed in service before December 31, 2028, to receive credits
- Moves up the date for FEOC compliance to December 31, 2025
- Restricts projects from collecting incentives if they involve any “material assistance” from a prohibited foreign entity if they start construction after December 31, 2025
The final bill includes the following elements first revealed in the first draft:
- Eliminates residential ITC (25D) after December 31, 2025
- Preserves full value of manufacturing tax credit (45X) through 2029 before phase-down through 2031
The residential solar ITC has been extended numerous times over the last few decades. When it was extended in 2015 through 2021, then-SEIA president and CEO Rhone Resch said:
“This historic vote brings the solar industry to the forefront of the conversation about American energy. The ITC extension makes America and its solar industry the world’s preeminent producer of clean and affordable energy.”
With still-high interest rates and solar panel tariffs already putting residential solar out of reach for many Americans, killing the 30% federal tax credit will no doubt hammer the country’s residential solar installers, many of which are small local businesses.
“If Congress does not change course, this legislation will upend an economic boom in this country that has delivered an historic American manufacturing renaissance, lower electric bills, hundreds of thousands of good-paying jobs, and tens of billions of dollars of investments primarily to states that voted for President Trump,” said SEIA president and CEO Abigail Ross Hopper.
“This unworkable legislation is willfully ignorant of the fact that deploying solar and storage is the only way the U.S. power grid can meet the demand of American consumers, businesses, and innovation. If this bill becomes law, America will effectively surrender the AI race to China and communities nationwide will face blackouts,” she continued.
The bill will now go to the Senate for deliberation.
