With a 30% federal tax credit on residential solar panels set to expire Dec. 31, industry professionals are bracing for impacts that may include a downturn in business next year and a short-term spike in sales as consumers purchase solar panel systems before the deadline.
“I hope for [solar companies] there is going to be a nice big spur during this next six-month push,” said Kelly Miller of Stilwell Solar, a Southwest Florida service company based in Estero. “It’s kind of like stores having their final going out of business sale.”
But she adds, “I think when you have a great product it keeps going and people continue to want it. So, we’re not going anywhere.”
While speculation about the new rule’s impact is not all negative, concerns remain about how it could shake up the solar industry as companies prepare for a market without the long-running credit. It began in 2005 and was set to phase out by 2034 under the Inflation Reduction Act before being eliminated as part of President Donald Trump’s tax and spending bill signed into law July 4.
One effect of ending the credit could be a buildup of supply for manufacturers as demand for panels goes down. Hopefully, Miller said, that would in turn bring prices down on equipment to soften the blow for installers and in turn their customers.
A slide in sales could also impact employment for manufacturers and installers, said Bill Johnson, president of the Florida Solar Energy Industries Association and founder of Sarasota-based solar company Brilliant Harvest. “We’re probably not going to be hiring like we would have, and the industry is not going to grow like it would have.”
That 30% credit is “a significant chunk of change,” said Dominick Zito, co-owner of Florida Solar Design Group in Fort Myers. Roughly estimated, tax rebates for his customers have ranged from $12,000 for small systems to $40,000 or more for larger ones. While Zito said he has seen an uptick in recent business due to the ending credit, he expects to take a hit in the coming year.
“It’s a dramatic effect, a huge detrimental effect on communities because we’re local, all our employees are full-time employees,” he said. “If peoples’ solar businesses are down 30%, 40%, 60% (and) there’s no work, there is that much less work for employees.”
Orlando-based solar company Soligo has been training employees in HVAC and roofing for several years over concerns that the tax credits might end, said Josh Randolph, the company’s chief marketing officer. “We’re hopeful that the solar industry will still survive but we are expecting some big changes to happen.”
People who are interested in getting panels installed before the deadline are calling Cape Coral-based Solar Energy Solutions of America on a daily basis. If a loan for a solar panel system used to take about seven years to pay for itself in energy cost savings, it could take nine or so without the tax credit, said Adam Tourlakes, the company’s sales manager.
“Which still makes it attractive to a lot of people,” he said. “It’s just a matter of letting the dust settle when [the ending tax credit] happens.”
That’s also just speculation, Tourlakes adds. “Who knows?”
Stilwell Solar’s Miller points to solar panels’ benefits as a potential hedge against utility price increases and a resilient power source after storms.
“Elimination of [the credit] does push the return on your investment in purchasing solar out a few more years, but the elimination of paying for your electricity is instant, as is the appreciation of the value of your home,” she said.
Eliminating the credit could also impact how quickly the U.S. is able to expand renewable energy compared to other countries.
“The reality is that this is a global competition and countries that we are not friendly with right now, China in particular, they are moving forward as fast as they can on renewable energy,” said FlaSEIA’s Johnson.
