House GOP Tax Proposal Threatens Future of Rooftop Solar Incentives

Over the last twenty years, more than five million American households from states like California, Georgia, and Maine have installed solar panels on their roofs, harnessing solar energy to reduce electricity costs.

However, this rapid growth faces an abrupt threat.

A significant policy bill passed recently by House Republicans proposes ending tax credits for both homeowners and solar leasing firms by year’s end—credits that have been central to the widespread adoption of rooftop solar. Experts and industry leaders warn that if enacted, the legislation could cause an immediate and steep drop in solar panel installations.

Ben Airth, policy director at Freedom Forever—one of the nation’s largest residential solar companies—explained, “This would be a major setback. Having been in the industry for over two decades, I recall a time when solar panels were primarily installed by wealthy individuals, survivalists, and environmental advocates.”

Research from Ohm Analytics, a data analytics firm, suggests that rooftop solar installations could decline by 50 percent next year if the tax credits are removed. Without these incentives, the average homeowner would face a 17-year payback period on their solar investment. Meanwhile, a more cautious forecast by Morgan Stanley anticipates an 85 percent reduction in rooftop solar demand through 2030.

While the GOP’s plan also targets tax breaks for other renewable technologies such as wind and utility-scale solar farms, the impact on rooftop solar could be disproportionately harsh. Residential solar systems generally cost two to three times more per unit of electricity compared to large-scale solar installations located on farms or in desert regions, making the sector highly sensitive to subsidy changes.

Currently, the Senate is drafting its own version of the domestic policy bill. Industry representatives have gathered in Washington to advocate for a more gradual phase-out of solar tax credits, emphasizing that the solar sector supports approximately 300,000 jobs and helps homeowners reduce their monthly energy expenses.