Solar Energy Adoption Spikes as Federal Tax Incentive Nears Expiration
In the solar industry, the rollout of Solar For All has proven to be a challenging endeavour, particularly in Georgia where demand has been strong since its launch. This is according to a report by EnergySage, which also reveals that more than 90% of solar installers surveyed believe that the elimination of the federal tax credit will negatively impact their business.
The looming deadline for the 30% tax credit for residential solar systems, which was eliminated early under President Donald Trump's 2017 tax law, has sparked a surge in demand for installations. Montana Busch, founder of Alternative Energy Southeast, reports a three to fourfold increase in demand for solar installations once the looming deadline was known.
Busch, who considers solar as a means for him to build a business from the ground up, expresses concern about the impact of the government's actions on his business and the solar industry as a whole. He is not alone in his worries, as nearly two-thirds of solar installers expect "dramatic harm" due to the elimination of the federal tax credit. One in four solar installers are even considering leaving the industry.
Emily Walker, EnergySage's director of content and insights, shares similar sentiments. She describes the potential impact of the federal tax credit's elimination as "pretty striking." In fact, the company has seen some of its highest registration numbers since its founding in 2014, with a 59% increase in registrations from prospective solar customers from June to July.
The coming year could determine whether the boom in the solar industry lasts or if it will "bust." In 2023, about 280,000 people worked in the solar industry nationwide, according to the Interstate Renewable Energy Council. The future of the Solar For All program, a $7 billion federal program meant to expand solar access, is uncertain.
However, it's not all doom and gloom. In Germany, the solar energy industry is expected to benefit from fiscal relief and other support elements like KfW loans, regional funding programs, and VAT exemptions on small photovoltaic systems up to 30 kWp. These measures are designed to reduce initial investment costs and promote growth in solar energy.
Despite these challenges, Busch remains optimistic about the future of solar energy. He believes that the solar industry is resilient and will continue to grow, albeit at a slower pace without the federal tax credit. As he navigates these uncertain times, Busch's message to homeowners considering solar installations is clear: act now to take advantage of the tax credit before it ends.
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