Residential solar installers face a rush before end-of-year tax credit deadline

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For the Philadelphia-based residential solar installer Solar States, business is booming right now, but this rush on solar installations is not necessarily welcome.

“Right now, our sales people are as busy as they’ve ever been, but we’re also looking at an enormous cliff at the end of the year,” said Micah Gold-Markel, Solar States founder.

“It’s very difficult to deal with,” Gold-Markel said. “We’d much rather have it spread out over time, because people want to get their solar installed prior to the end of the year so that they can capitalize on the 30% federal tax credit.”

Gold-Markel said he’s also rushing to hire new employees to handle the rush, but that layoffs will have to happen come January.

“And so that creates a lot of problems because we have an enormous amount of work [now],” Gold-Markel said. “Our model is one of constant employment, but it’s very likely not going to continue into the future. So how you plan for that is very difficult. The thing that you need in business is surety.”

The federal budget passed earlier this month put a halt to tax credits for residential rooftop solar starting Jan. 1, 2026. That means customers must have everything installed by the end of the year to qualify for the credits.

“Time is of the essence for those that are looking to take advantage of the residential clean energy credit, which is 30% of the system cost,” said Stephen Irwin, founder of Amicus Solar Cooperative, whose members include solar installers, developers and construction companies.

Irwin warned that some are unaware of the details of the deadline and urged anyone seeking to take advantage of the credit to make sure installation is complete and the system is completely online by Dec. 31.

Irwin said the residential tax credit applies to homeowners who own their solar panels and is separate from the business tax investment credit for third-party solar installers.

Those solar installations work more like leasing a car, said Irwin, and include larger companies that may have power purchase agreements for big installations. In that case, Irwin said that while the tax credits have new restrictions, those can be completed by the end of 2027 as long as construction begins by July 4, 2026.

Origins of the residential solar tax credit

The 30% tax credit was originally created by President George W. Bush in 2005.  The Biden administration extended it until 2032, with phase outs until 2034. The consistent and long-lasting credits helped spur a boom in residential solar for companies like Solar States.

But President Donald Trump’s clawback now has homeowners rushing to get everything installed and paid for by Dec. 31.

Gold-Markel said he’s fielding lots of questions from customers that are difficult to answer, especially since the end of the tax credits are mixed up with uncertainty over tariffs.

“I can’t plan for things that are going up and down and left and right, without any rhyme or reason, and that’s really the situation that we’re in now,” Gold-Markel said. “People ask us for our expertise, we can give it, but we have to give the big caveat. This is our best advice, but we don’t know. The rules just aren’t clear.”

End of solar tax credits could mean the loss of more than 75,000 jobs by the end of this year

The Solar Energies Industry Association estimates up to 80,000 jobs will be lost by 2026 due to the rollbacks of residential solar tax credits.

“America is in the midst of an energy manufacturing boom, with new solar and storage factories opening across the country thanks to the forward-looking policy this law will upend,” said Abigail Ross Hopper, president of the Solar Energy Industries Association, in a statement. “Now many of these brand new factories will be forced to shut down and lay off thousands of workers, gutting communities that were finally seeing the kind of industrial revival rural America needs and handing an untimely and strategic victory to China.”

Gold-Markel said he’s not sure how many employees he will have to lay off, but he’s working to shift his business in other directions, including maintenance and education. But he’s finding other political barriers to his business.

“We were on a call with an education partner in New Jersey yesterday, and they said, ‘You know, the students give your classes the highest reviews, the teachers love working with you, but we get some federal funding for these programs, and we were told by the federal funders that they will not fund anything with the word solar in it,’” Gold-Markel said. “I mean, these are the times we’re living in, it’s insane.”

Stephen Irwin of Amicus Solar Cooperative says he remains bullish on solar.

“Solar is cheap,” Irwin said. “Economics always wins over policy.”