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Solar energy experts warn of impending industry fallout after officials threaten to wipe out lucrative incentives: '[This] will literally kill the industry'

"I don't think we would have been able to do that without tax credits."

"I don’t think we would have been able to do that without tax credits."

Photo Credit: iStock

Solar energy experts are worried for the state of solar — here's why.

What's happening?

Solar panels are a great way to save money on energy bills while reducing your household's carbon footprint, but valuable incentives allowing homeowners to affordably access panels are at risk. 

The loss of these incentives could be disastrous for customers and the industry, as detailed in a YouTube short by EnergySage.

The Inflation Reduction Act of 2022 expanded the Residential Clean Energy Credit, allowing eligible homeowners to claim a tax credit on solar panel installation. 


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Over 750,000 Americans were able to install home solar in 2023 thanks to the IRA credits, according to The New York Times.

However, the House of Representatives has passed the reconciliation bill, which includes expediting the end of the 30% residential solar tax credit. 

The tax credit originally had a phase-out date of 2034, but if the Senate passes the bill, the solar tax credit will end in 2025 — nearly a decade early. 

The effects of this bill could be catastrophic for homeowners and local businesses. Kyle Elpel, the owner of Serv Solar in California, warned that "a dramatic drop-off will literally kill the industry in about a dozen states," per an EnergySage YouTube short.

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Why are solar tax credits important?

Going solar is one of the best ways to save money on home energy while helping the environment, but one of the biggest barriers to accessing the benefits of solar is the upfront installation cost. 

Prices vary, but the average system is around $33,000 before incentives. EnergySage has quick, easy-to-use, free tools to help you find estimates and compare quotes, and access the incentives available to you.

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Solar tax credits can take thousands of dollars off the cost, making solar energy more viable for the average American. Without available incentives, many homeowners would be unable to install solar, and with fewer customers, many solar companies could go out of business.

"We are now 100% running our house off solar with a battery backup, and I don't think we would have been able to do that without tax credits," solar customer Sam Potasznik told EnergySage.

What's being done to save solar incentives?

EnergySage urged Americans to contact their local representatives and ask them to save Section 25D, also known as the Residential Clean Energy Credit. 

The fate of the incentives is uncertain; it could be valuable to act quickly now and potentially save yourself thousands. 

If the Senate passes the bill, homeowners only have until the end of the year to make the switch to solar. If you're interested in solar panels but aren't sure where to start, EnergySage offers tools and resources that make installation easier than ever. With installation quotes, savings estimates, and verified contractors, EnergySage will help you get the lowest price on the best system, potentially providing up to $10,000 off the total cost. 

The cost of installation varies by state, as do the incentives. EnergySage's mapping tool can show you each state's average installation cost and specific incentive offerings.

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