Ed Murray has been in the solar business long enough to remember the bloodbath of 1985. That’s when President Ronald Reagan ended Jimmy Carter-era solar tax credits meant to decrease US reliance on fossil fuels following the 1970s oil crisis.
“It was a sad time,” says Murray, who is president of the trade group California Solar & Storage Association. Membership to the organization (which hadn’t yet added “storage” to its name) fell from 670 companies to just 37 “almost overnight,” Murray says, as hundreds of businesses went under without the tax credit. “I hope that that doesn’t happen to us again.” (Then-California Gov. George Deukmejian also cut a state tax credit for solar around the same time.)
The industry has managed to make a remarkable comeback since then, thanks in no small part to Congress reinstating a federal solar tax credit in 2005. Speeding the adoption of renewables like solar was meant to limit Americans’ dependence on foreign energy sources. “By developing these innovative technologies, we can keep the lights running while protecting the environment and using energy produced right here at home,” President George W. Bush, a Republican, said upon signing the measure into law.
“I hope that that doesn’t happen to us again.”
Now, as a result of Donald Trump’s One Big Beautiful Bill Act, the tax credit is set to expire at the end of 2025, and home solar companies face another cliff. Installers are racing to complete projects for customers wanting to take advantage of the tax credit while they still can, even as they face some major headwinds in the process. After that, the industry will have to figure out how to adapt to a very different solar landscape in the coming year.
“It’s a mad rush and it’s crazy,” Murray says.
It wasn’t supposed to be like this; solar companies and their customers thought they’d have the credit for much longer. The 2005 Energy Policy Act reestablished a solar federal tax credit in the US, which the 2022 Inflation Reduction Act (IRA) expanded and extended until 2035. That gave a residential solar customer an income tax credit equal to 30 percent of the cost of installation.
This year, the Trump administration has taken a wrecking ball to the IRA, which was the Biden administration’s signature climate and clean energy bill, as part of President Trump’s pro-fossil-fuel agenda. The Republican-controlled Congress voted in July to wind down the home solar tax credit by the end of the year.
Initially, that led to a spike in customers rushing to install home solar systems before the tax credit goes away. EnergySage, a nationwide solar marketplace in the US, says it saw a 205 percent year-over-year increase in homeowners communicating with installers on their platform after the Republican spending bill passed in July. That trend was echoed by Murray, who is also president of the Northern California-based company Aztec Solar, and other installers The Verge contacted. “It increased sales immensely, and so we have a rush to the end,” Murray says.
The surge in demand, however, has also come with bigger headaches for solar companies who say they now have to work with local permitting offices and utilities similarly scrambling to keep up with the sudden onslaught of installation applications. The lead time to secure a permit has doubled since August to about four to eight weeks for Northern California company Vital Energy Solutions, according to its director of sales and marketing, Kevin McGuire.
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