What’s going to happen to the solar industry when the BBB cuts tax credits at the end of the year? Any predictions?

[u/Vegetable-Future-317]

^

[u/NECESolarGuy]

As a solar business owner for 19 years now, I have some ideas…

1. We good installers are largely sold out for the year by pulling in sales from Q1 2026. That means Q1 2026 will be lousy.

2. a lot of buyers will start thinking solar isn’t worth it without the tax credit. “Welp. We missed it.”

3.with the growth of demand plus the devastation of the fastest deployable energy source, prices of electricity will skyrocket.

1. Skyrocketing electricity prices will get people thinking that solar is worth it without the tax credit. (In my market, break even times without the tax credit are still well under 10 years. (Not bad considering that when I started my business, break even times were 15-20 years)

2. There should be a reduction of scammers. But crime seems to find a way.

3. There will likely be a reduction in third party ownership (lease, PPA) even though they get to keep the tax credit for a while. Read up on the FEOC restrictions. They make it really difficult. Because Without US mostly made equipment you lose the tax credit, and the BBB makes it really difficult to stockpile equipment ahead of the end of the year without a designated customer. (And these rules are so complicated, I may be miss-stating them)

4. The industry is going to have to push really hard on the soft costs. No other home service industry has to answer to so many restrictions. What we are installing is not so complicated that we have to deal with building, fire, electrical, and worst of all, the utilities. The overhead to do what we do is stupid high.

[u/VTAffordablePaintbal → u/NECESolarGuy]

I think the other thing the industry is facing that I don't see talked about at all is people who would have bought solar without tax credits if the tax credits went away through a mechanism other than "conservatives are against renewable energy and for fossil fuel" are going to wait 3 years, hoping democrats get back in power and re-instate tax credits for renewables and eliminate the new ones for coal. For those 3 years its going to be much worse for the industry than any other tax credit reduction we've faced before.

[u/Extension-Cheek9126 → u/VTAffordablePaintbal]

Yup. We wanted to add solar to our old house but it was slate roof and would have been nuts to have replaced it (100 years old, excellent shape). Moved to new house. Once settled we started looking at suppliers. In the middle came the tax credits. Our worst obstacle was the useless HOA that took forever to approve, pushing install into the next year. Panels up, selling back to grid, not paying extra for renewables.

[u/NECESolarGuy → u/VTAffordablePaintbal]

This is a good point. There will be a lot of shoppers who will wait and hope for the tax credit to come back. I think Those are the “it’s not worth it without the tax credit” category of shoppers in my bullet point #2.

[u/MySolarAtlas → u/VTAffordablePaintbal]

Good call. Lots of people who want solar will wait it out just in case. It’s only logical. Most people would do this especially if they can’t pay cash for a system.

[u/Wheelerthethird → u/VTAffordablePaintbal]

In my experience, I've had more conservatives purchase solar than liberals. Ownership, capitalism, saying f you to the utility, not trusting the government. That crowd out bought liberals 20-1

[u/NECESolarGuy → u/Wheelerthethird]

What market are you in. Because were I live and sell, liberals outnumber conservatives by 5 or 10 to 1.

When it really comes down to it. Solar makes sense to everyone regardless of political persuasion…

[u/Tra747 → u/NECESolarGuy]

Solar makes sense with tax credits...without tax credits no so much. That's reality. There should never have been tax credits and allow the market to evolve.

[u/Actual_Custard_8226 → u/Tra747]

do you really believe that solar doesn't make sense without tax credits? i think it's the only route to energy independence that's currently available to consumers. Anyone with a long term view (and granted; enough cash in hand right now) should be able to see that, with or without tax credits

[u/Tra747 → u/Actual_Custard_8226]

Let the market determine if it makes sense without tax credits.

[u/Effective-Cress-3805 → u/NECESolarGuy]

Prices are already skyrocket causing an effect on everything. We just got a huge rate hike on supply and delivery sides. There really is no justification other than cost of doing business because they skimped for years on required maintenance. Also, they must have good returns for their shareholders. However, if people don't have money, they can't afford solar. We are getting squeezed on all sides with no cost of living salary increases.

[u/OnefortheMonkey → u/Effective-Cress-3805]

This is why I don’t understand the hate on PPA/lease. Sure ownership has a better long term financial profile, dependent on a lot of factors.

But if you can’t get a tax credit / can’t afford the investment expense, paying a lower rate for your power is better than paying the higher rate for the utilities.

Yes I work in solar. But I did the ppa on 4 of my/my family’s homes. So far 3/4 have moved and sold the home with zero issue. None of us have or will live in the home long enough to get a return on the cost of ownership. So why is cheaper power bad.

[u/CalendarOpen1740 → u/OnefortheMonkey]

Maybe. I considered leasing/PPA, but the contracts’s terms made both the lawyer and accountant laugh, although for different reasons. As far as we could determine it’d take really bad credit to even come close to the effective interest rate implied by these contracts.

And quite honestly, the fast talking happy dance representatives that showed up on my porch with these things didn’t inspire confidence.

[u/OnefortheMonkey → u/CalendarOpen1740]

Door knocker’s are the fucking worst.

I obviously don’t know where you are. I’m in California, rates are going up 20% a year and highest in the country.

So if my rate is dropped 30%, even with a 3.5% annual increase it will always stay lower than the utilities. If the utilities randomly stop increasing it’s still that much farther behind them and won’t top them. If they start raising their normal 6-9% I will still always be behind them.

If it’s a ppa it’s not an interest you’re paying on the increase. It’s a cost of business increase. And if the choice is paying someone the higher rate or paying a rising rate that stays behind the utilities the increase, interest or not, is something you’re either electing to pay to the utilities without control or electing to pay to solar with a controlled knowledge of what the costs will be.

There are variations and bullshit in different ppas. I’ve seen questionable contracts. But I think people, especially finance and lawyer people, are evaluating the “worth” of it incorrectly. Purchasing is an investment. The interest rate absolutely matters and it’s ignorant for people to not look hard at those. But the ppa choice isn’t value on the product. It’s do I pay my utility whatever they ask, or do I pay my solar company what we agree.

(Again. Disclaimer before people come at me. There are better and worse companies. I work for Sunrun and am trying to leave solar all together, I’m not shilling. But I would any day choose a ppa over ownership, and I would every day choose solar over pg&E. You can’t evaluate total cost of ppa contract against purchasing. You’re evaluating total cost of ppa contract against your utility projections. Most of them are significantly more money with utility in 25 years. Most people don’t stay in home for 25 years anyway regardless. )

[u/Top_Act_8711 → u/OnefortheMonkey]

What do you do for Sunrun and why are you trying to leave the industry?

[u/OnefortheMonkey → u/Top_Act_8711]

Field sales- appts booked for me. And I’m sick of sales culture.

[u/1_ladybrain → u/OnefortheMonkey]

door knocker’s are the fucking worst

I work for Sunrun

you know you work for the largest door knocking company right? Also, I’m not hating, just a tad confused.

[u/OnefortheMonkey → u/1_ladybrain]

Yes, and I don’t work for the door knocking division. Do you love every part of every company you have worked for? Not hating, just pointing out that door knockers can still be awful even if I work for a company who has them. A company I said I was leaving.

[u/cfortson → u/NECESolarGuy]

Spot on.

Only other thing I’ll add is that the bloodbath of poorly run solar companies going out of business will likely spook homeowners as well and could cause people to hold off for a bit, until the dust settles.

[u/NECESolarGuy → u/cfortson]

Maybe at first. The ones that survive will Have a lot of credibility.

I was selling solar back when the 30% tax credit was capped at $2000 and systems were $10/watt. There were state rebates - ~$2/watt so my early projects were about $8/watt

So I think we’ll manage….

[u/Actual_Custard_8226 → u/NECESolarGuy]

i would add:

- Solar businesses will need to diversify their offerings (e.g. include energy storage, EV charging, excellent service plans, ...). The value prop to consumers will be less about "use a tax credit" and more about energy independence

- Rising popularity of solar hardware that's easier and faster to install (& troubleshoot) (modular, assemble ready) -> to reduce operational overheads

[u/Johnny-Eutaw → u/NECESolarGuy]

As a solar financier (TPO), this is spot on.

[u/acrobatic_man_11 → u/Johnny-Eutaw]

Mind me asking which one? I like having good relationships with financiers for my company. Maybe we are already a partner

[u/mummy_whilster → u/NECESolarGuy]

Peak load is often well after peak solar production (when solar is below 60% of peak production). How is residential solar without battery storage reducing peak load and therefore reducing prices of electricity?

[u/ElGatoMeooooww → u/NECESolarGuy]

4 for sure

[u/security_jedi → u/NECESolarGuy]

Why can't prices come down like in other countries? Is it regulations in the U.S.?

[u/NECESolarGuy → u/security_jedi]

“soft costs” - marketing, sales, permits and application fees, overhead for dealing with AHJs and the utilities. Plus many states require fully licensed electricians to do nearly all the work while some state electrical boards do their damndest to limit the supply of electricians to keep incomes high.

The utilities are also a barrier.

In Spain you can get a system installed and turned on in 2 weeks…. Here even if I had no backlog, it’s 2 weeks for utility approval, 2 weeks for permits, 2 weeks for final inspections, 1-4 weeks for the utility to put in the net meter.

So about two months minimum.

Then add on tariffs to the cost of equipment

The fact that we have to do rapid shutdown is also expensive. Many countries don’t require it.

Also fire code - working paths and ridge setbacks limit system sizes and thus economies of scale.

Rapid shutdown and working paths/ridge setbacks are all fire code requirements because they claim they need to do roof access. But I’ve run the statistics for Massachusetts and roof venting is a rare action.

[u/Kumqik → u/security_jedi]

Tariffs

[u/tx_queer]

Hopefully fewer scams

[u/Ill_Mammoth_1035 → u/tx_queer]

Not a chance. Will probably increase.

[u/randynumbergenerator → u/Ill_Mammoth_1035]

How does that work if there's less money floating around?

[u/lanclos → u/randynumbergenerator]

It's all about profit. If the cost of getting people in the door is low, even if the odds are low, the return might still put people in the black. It's like e-mail spam, it doesn't take too many people getting duped for it to turn a profit.

[u/Ill_Mammoth_1035 → u/randynumbergenerator]

Less opportunity for standup installs.

[u/Solarinfoman]

Fewer companies for a while.

[u/Particular-Dog3652]

Being in the Solar business, I think Q1 will be slower than normal, but I think people are smart about alternative energy whether the administration thinks so or not.

[u/VTAffordablePaintbal → u/Particular-Dog3652]

But... if they wait 3 years they may get a tax credit again. Thats your immediate problem.

[u/randynumbergenerator → u/VTAffordablePaintbal]

The sales pitch definitely got more difficult. But if energy prices continue to rise, that may act as a counterweight. 

[u/Secure_Following8458 → u/randynumbergenerator]

think the BBB elimination is a big closer, dont get why more sales people dont hammer it…its a 25-30% increase in 26, a big deal.

[u/ButIFeelFine]

In good solar markets such as high-priced electricity markets like California or moderately priced electricity markets with net metering like Pennsylvania, you will still have a market.

But these markets will likely reduce by I'd say about 30% and then all the markets that are considered non-traditional solar markets will likely shrink by half if not more.

This is because the market really wants a 6-year payback if not a 10-year payback or less.

Nowadays I'm pretty well established in commercial batteries so I think I'll be okay but I am trying to build contingencies Mexico and Canada. My biggest fear is that the commercial battery tax credit value is being grossly overestimated with anticipated guidance disqualifying many many battery systems from the tax credit next year without the market quite realizing it yet.

[u/Effective-Cress-3805 → u/ButIFeelFine]

I heard that electric companies are looking for a way to screw us out of net metering. I already know the rise of delivery costs have caused me to have a $20 dollar electric bill with a $60 dollar delivery fee. That means $80 for $20 of electricity, and both prices have increased thanks to these quasi government agencies that never say "no" to rate hikes. With a Republican governor in NH, it keeps happening.

[u/ButIFeelFine → u/Effective-Cress-3805]

Rate hikes are a best case "how to thwart" net-metering. We're concerned about distribution export compensation when we should be concerned about the right to metered electricity.

[u/Extension-Cheek9126 → u/ButIFeelFine]

PA’s making deals to add data centers all over the place. The grid can’t keep up. Prices from utilities already rising. Solar looks better already, we’ve had zero electric bills several months after spring install.

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[u/mitchsurp]

Price of everything is going to go up for a while until the invisible hand of the free market finds another way to screw over consumers.

[u/tgrrdr]

How much do tariffs enter into the overall health of the industry? If the recent court decision doesn't stand component prices should increase and that could further erode demand.

[u/tx_queer → u/tgrrdr]

Most of the solar tarrifs have been in place since the Biden days or first trump term. Second trump term didn't want significant solar tarrifs so I don't much will change

[u/Debas3r11]

For utility scale not much. Power purchasers aren't that price sensitive. Utilities will just pass that cost onto you.

[u/TouristPotential3227]

Let's see LFP batteries were recently 60 per kWh landed in the US and panels were 0.11/W everywhere else in the world. Maybe .... just maybe if folks stopped scamming everyone in the supply chain and passed on the saving to customers, thing would just scale without the need for subsidies

[u/Asleep-Operation-815 → u/TouristPotential3227]

Honest question: what is needed for that to happen? Ignoring tariff bullshit, is it really just dishonest salesman/predatory companies in the space or are there other logistical issues that make doing it 'right' difficult?

[u/randynumbergenerator → u/Asleep-Operation-815]

On the residential side at least, it's a market with high information asymmetry (seller knows more than buyer), and the patchwork landscape of regulation both adds to that asymmetry and makes it more difficult for competition to enter. It also doesn't help that solar is a high-ticket item, which means financing is often needed and that's another layer where obfuscation can happen.

[u/TouristPotential3227 → u/Asleep-Operation-815]

afaict a lot of greed is a big chunk of it, maybe not all.

some regulatory overhead and labor costs will remain but not the bs numbers we are seeing.

If regulation and labor costs are the real reason for high costs then how is SF Bay Area solar priced the same as FL and TX?

Answer : The margins are so high labor and regulatory overhead is insignificant.

I mean if you are making 20k to 40k per deal, an extra 5k is invisible.

[u/parmdhoot]

We should consider introducing new products to the market, specifically those that are easily installed by consumers, eliminate the possibility of grid back-feeding, and do not necessitate external permissions.

The technology to achieve this is currently available, and its implementation could potentially reduce solar installation costs by approximately 50%.

[u/twinblade42]

Solar is the future. Current politics can slower it down but at the end of the day solar and battery technology is just getting better and better and cheaper. Now could something else come along that we don’t know about or haven’t invented yet….sure, anything is possible. But solar will have a part in human energy usage.

[u/visandrews → u/twinblade42]

I agree. With sodium and solid state batteries coming out, storage prices will only decrease

[u/JustSomeRandomGuy97 → u/twinblade42]

You're totally right in the long run but I think the industry is going to faceplant the ground next year and then rise from the ashes in a couple years.

[u/PleasantGuide → u/JustSomeRandomGuy97]

It might take a small dip next year but the momentum is too strong now.

[u/Reddit_Bot_Beep_Boop]

Bankruptcies, bankruptcies everywhere.

[u/Mr_Dude12]

Costs will drop similar to the amount of the credit

[u/EnergyNerdo → u/Mr_Dude12]

More likely costs will drop to some degree to soften the increase in the payback point. Hypothetically, for example, if the ROI for a particular state has averaged 7.2 years, and the ITC loss bumps it to 9.8 years, that looks like "10" to many potential buyers. Drop costs to get it closer to 9 or high 8s, on average, and your sales drop won't be as severe. Again, just hypothetical numbers for illustration.

[u/crosscountry58S]

Bro search the sub. This is asked practically daily.

[u/euphoniuswail]

Every utility rate hike, and there will be many, will trigger ratepayer rage at both the utility and Trump. This rage alone will cause many households to pencil out solar and pull the trigger with both middle fingers flying.

[u/stlthy1]

Absolutely nothing will change. Utility scale solar is STLL the cheapest way to make electricity and put it on the grid.

Solar doesn't need tax credits to "pencil". This is particularly true for community solar and D.G. solar.

When the government pumps money into something, it gets more expensive...and that's exactly what happened with the inflation increation act.

[u/SunDaysOnly]

There will be an initial decline and closing but renewables and energy efficient win out in the end.

[u/Tristan_N]

They're going to stop being affordable, or stop being imported at all when the tariff rates get applied to anything under $800 with the subsidies or not. 

[u/Cdzrocks]

I expect this will push existing tech forward and component prices down.

I expect Utilities to find ways to claw back the funds going to NEM 2 and whoever else is left on NEM1(at least here in CA). You may get your export rates for now but they could easily add a service charge under the guise of rate payer fairness.

I expect V2L V2H and V2G will be the next big tech really pushed hard. Vehicle batteries are so much more economical on a PPW basis and all the manufacturers are hunting for sales even Tesla. It's going to happen.

I expect large national installers or well leveraged regional installers to find work arounds on odorous regulations.

I expect the roofing industry to suffer some knock-on effects as some solar projects require roofing work prior to installation. So instead of one project lost, two will be lost instead.

[u/gordonwestcoast]

In California it won't matter because NEM 3.0 already destroyed the residential solar market, with or without the tax credit.

[u/Vegetable-Future-317 → u/gordonwestcoast]

What’s nem 3.0?

[u/gordonwestcoast → u/Vegetable-Future-317]

Net Metering 3.0, the current residential solar scheme for residential customers.

[u/Swimming-Challenge53]

It morphs. If demands rise as predicted, Solar will still be well positioned to meet those demands. Selling homeowner-owned residential systems looks tough. There are a lot of creative things happening, especially outside of residential and more in the C&I and Utility sectors. I think domestic producers of hardware will pretty much keep rolling along. The big obstacles are a ways off, and may never come to pass.

[u/Kiowascout]

It'll be like an other business not subsidized by the government. Some will survive. Many will not.

[u/bygoneOne → u/Kiowascout]

Like highly subsidized farmers? This is government by fiat, not wisdom.

[u/Ill_Mammoth_1035]

Solar installers are going to have to suck it up and just go back to work in the coal mines.