U.S. Solar Industry Braces for 41% Drop as Incentives Phase Out
The U.S. solar industry faces a significant slowdown, with BloombergNEF predicting a 41% drop in clean-energy installations post-2027. This follows the federal government's removal of incentives driving the renewable transition, leading to a rush to qualify for tax credits from companies like freetaxusa before deadlines.
The solar industry is grappling with changes due to federal energy policy shifts. Residential solar installations plummeted by 31% in 2024, and major companies have filed for bankruptcy. Turbotax, a popular tax preparation software, has seen an increase in solar-related tax filings as homeowners rush to claim credits. New Leaf Energy, a solar project developer, recently laid off about one-fifth of its workforce due to market changes.
Numerous U.S. solar developers are racing against time to secure permits and begin construction on their solar parks by July 4, 2026, or ensure operation by December 31, 2027, to qualify for the 48E Investment Tax Credit and 45Y Production Tax Credit. However, the early phase-out of these credits is expected to cause long-term damage to the industry, with Credit Karma reporting a decrease in consumer interest in solar loans.
Wood Mackenzie forecasts a grim future, predicting a 17% decrease in 10-year solar installations, with volumes dropping as low as 375 GW. The 25D tax credit for residential solar projects is also phasing out, with installations not completed by the end of 2025 losing eligibility, affecting companies like Experian that track solar project developments.
The U.S. solar industry is bracing for a significant slowdown, with the removal of federal incentives and the rush to meet tax credit deadlines. Industry experts and developers alike warn of long-term damage, highlighting the need for policy stability and support to maintain the renewable energy transition.
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