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Bill would scrap 30% tax credit for homeowners with solar

panels

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Rooftop solar companies employ more than 100,000 workers

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Many top residential solar markets are in Republican

states

By Nichola Groom

May 15 (Reuters) - Companies that put solar panels on

U.S. homes say a Republican budget bill advanced in Congress

this week would deal a massive blow to the industry by

eliminating a generous subsidy for homeowners that had

buttressed the industry's growth.

The bill would scrap a 30% federal credit for taxpayers who

put up rooftop systems, stifling an industry that has grown

ten-fold over the last decade and which now employs more than

100,000 workers, industry players said.

"It certainly is a giant setback," said Charlie Hadlow,

president of EnergySage, an online solar marketplace. "I have

solar installers in our large network passing around the contact

information for bankruptcy attorneys. That's not alarmist,

that's happening."

Many of the biggest residential solar markets are in states

that voted for President Donald Trump, including Texas, Florida

and Arizona, according to the Solar Energy Industries

Association trade group.

The House of Representatives Ways and Means Committee voted

this week to allow the 25D tax credit to expire at the end of

this year, nine years earlier than planned, as part of a

Republican effort to roll back subsidies from former President

Joe Biden's signature climate law, the Inflation Reduction Act.

A spokesperson for Republicans on the committee did not

immediately respond to a request for comment.

The bill still has several hurdles to clear before getting a

broad package of tax cuts, spending hikes and safety-net

reductions through Congress.

The White House did not immediately respond to a request for

comment. Trump wants to undo federal regulations and programs

introduced by Biden that are aimed at expanding clean energy and

combating climate change.

More than half of residential installations qualify for the

25D tax credit, according to EnergySage, which estimates that

rooftop systems will be about $8,000 or $9,000 more expensive

without it.

The subsidy has been critical for small installers whose

customers pay cash or take out loans and then claim the credit

on their tax returns.

For panels that are owned by a third party, such as a bank,

and leased to homeowners, system owners are able to claim a

separate tax credit that the House bill would leave in place

until 2032 but start to phase out in 2029.

That market is dominated by large players like Sunrun ( RUN ).

"You want to just place a larger burden on the regular Joe

who pays taxes? It doesn't seem fair," said Jack Ramsey, CEO of

Altsys Solar in Tulare, California.

Ramsey anticipates cutting his nine-person staff to four or

five people if the credit is eliminated.

At the end of 2024, the U.S. boasted 36 gigawatts of

residential solar capacity, up from 3 GW in 2014 and a level

equivalent to a third of the nation's nuclear power capacity.

Rooftop solar accounts for more than a third of solar

industry jobs, according to the Interstate Renewable Energy

Council.

Rob Kaercher, CEO of Absolute Solar in Lansing, Michigan,

has 24 employees and wants to hire more, but will not if the

credit goes away.

"I strongly urge the credits to be maintained, because it

would do a tremendous amount for local businesses just like ours

to be able to continue to hire and grow," Kaercher told

reporters.

The move to eliminate the credit caught many in the industry

off guard.

Thomas Clark, the owner of Northstone Solar in Whitefish,

Montana, met with staff from his state's Congressional

delegation in Washington earlier this year and came away from

the meeting feeling the credit was safe.

"Obviously this happening so quickly after those meetings

really hurts as a constituent," Clark said.