Potential Decline of Rooftop Solar as GOP Proposes End to Tax Credits

Wed Jul 30 2025 18:56:20 GMT+0300 (Eastern European Summer Time)
Potential Decline of Rooftop Solar as GOP Proposes End to Tax Credits

The proposed domestic policy bill could significantly impact the rooftop solar market by eliminating essential federal tax incentives.


A recent bill backed by House Republicans threatens to cease federal tax credits that have fueled the growth of rooftop solar installations across the U.S. Analysts warn this could lead to a dramatic decrease in installations, with potential drops in demand reaching as high as 85% by 2030.



In recent years, more than 5 million homes across the United States have adopted rooftop solar panels, a trend that could be severely jeopardized by new legislation. The domestic policy bill, which Republican-majority House passed last month, aims to eliminate vital tax credits for homeowners and solar leasing companies as soon as the end of this year. Experts predict this move could lead to a substantial decrease in solar panel installations.

"Such a change sets us back tremendously," expressed Ben Airth of Freedom Forever, a leading residential solar installer. He highlighted that the solar market has been diversifying, moving beyond early adopters to a broader consumer base. According to an analysis by Ohm Analytics, if the proposed bill is enacted, residential solar installations could be halved in the coming year. Without these incentives, homeowners may face a prolonged financial recovery period—from an average of a few years to up to 17 years to recoup their investments in solar energy systems.

Morgan Stanley's projections are even more alarming, estimating that there could be an 85% reduction in rooftop solar demand up to 2030. While the GOP's intent includes reducing tax breaks across various renewable energies, the direct hit on rooftop solar could be immensely detrimental; residential systems often cost significantly more per unit of electricity than larger solar farms.

As the Senate works on its version of the aforementioned policy bill, members of the solar industry are urging lawmakers to consider a more gradual phasing out of these critical energy credits. With around 300,000 jobs at stake, the ripple effects of these changes could be far-reaching, affecting both the economy and homeowners' energy costs.

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