Ed Murray, president of the California Solar & Storage Association, recalls the impact of the 1985 elimination of solar tax credits during the Reagan administration. This decision led to a dramatic decline in the solar industry, with membership in Murray’s organization plummeting from 670 to 37 companies almost overnight. Since then, the industry has seen a resurgence following the reinstatement of a federal solar tax credit in 2005 designed to reduce reliance on foreign energy.
However, the federal tax credit is scheduled to expire at the end of 2025 due to recent legislation linked to the One Big Beautiful Bill Act. As a result, solar companies are experiencing a surge in demand as homeowners rush to install solar systems to benefit from the tax credit before it ends. Despite the increased demand, solar installers face challenges, including delays in local permitting processes that have significantly increased lead times for installing systems.
California, recognized as the largest solar market in the U.S., is not alone in grappling with these delays. Industry experts argue that the permitting processes are the biggest hurdle in achieving cost reduction goals in solar energy. With many projects at risk of not being completed by the deadline to qualify for the tax credit, some companies are calling for an extension to the deadline.
Installers report that the current surge in demand is further complicated by supply chain disruptions and delays in securing necessary installations. Companies are exploring diversification within their services to adapt to the changing landscape, including offering new solar financing options.
Industry leaders generally express optimism about the future of residential solar, anticipating continued demand driven by rising electricity costs and changing regulatory environments. Murray advises fellow installers to prepare financially for potential challenges ahead.
Source: https://www.theverge.com/science/844852/solar-energy-panel-installation-tax-credit-trump