The loss of solar tax credits may deliver a ‘significant blow’ to residential solar industry

The phasing out of the 25D residential clean energy tax credit is going to be a huge loss for the residential solar industry, according to a new report from research firm Wood Mackenzie.

• Per the report, residential solar adoption in the US could decrease by up to 46% by 2030, because without the tax credit, residential solar will be too expensive for many homeowners.
• In an analysis of the report, Wood Mackenzie Principal Analyst Zoë Gaston said such a decrease in residential solar “would be a significant blow for the industry.”

By 2050, though, the report found that the residential solar market will be “substantial”—so substantial, in fact, that it could produce more energy than is currently generated in the US by all energy sources. Residential solar adoption will also remain an attractive way for consumers to score affordable energy as power prices rise.

A projected temporary dip in the residential solar market is in line with reporting Tech Brew did earlier this month on how the solar industry writ large could be affected by the sunsetting of tax credits for residential solar power, as well as decreased investment and production.

“We’re at a steady state now that works. We will be at a steady state in the future,” COO and managing director of clean energy firm Aligned Climate Capital Brendan Bell told us. “There’s going to be this three-year period where things are really chaotic.”

During that “really chaotic” period, Wood Mackenzie forecast that many solar power companies will fold. Steve Hamile, COO of Nevada-based solar provider Sol-Up, told Tech Brew that such a dramatic loss in jobs will essentially “purge the industry.”

“There may be some good players that aren’t able to participate for whatever reason,” Hamile said of companies not being able to stay open without tax credits, “but I think what you’re going to find is a much more resilient and probably a more ethical industry that survives this.”