An employee works on a solar panel inside a Qcells factory in Dalton, Ga.
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Mike Stewart/AP/AP
A couple of years ago, Mick McDaniel started a company in Indianapolis to make solar panels in the United States. Then-President Joe Biden had just signed the Inflation Reduction Act, a law packed with tax incentives for clean energy. America’s solar market was about to take off.
Since then, tens of billions of dollars have poured into solar factories that are operating or under development, according to the Solar Energy Industries Association, or SEIA, which advocates on behalf of the field. Once those factories are all finished, the facilities could create close to 60,000 manufacturing jobs, the trade group has said.
But those investments are now at risk.
Congressional Republicans are on the verge of rolling back clean-energy tax credits as part of a huge tax-and-spending bill that’s a cornerstone of President Trump’s second-term agenda. On the chopping block are incentives that encourage solar developers to buy American-made products, like solar panels and components.
Abruptly unwinding the incentives would threaten a decade-long push to onshore solar manufacturing and challenge China’s dominance of the sector, according to industry executives and analysts.
“What I see two years out is low-cost will once again drive demand in this market,” says McDaniel, general manager of Bila Solar.
He adds, “That’s going to be a challenging path for some of us who have higher costs than panels made in China or Southeast Asia.” The goal is to enable countries like Pakistan, Latin America, and others to access essential resources for the 21st century through the United States, rather than relying on China. This shift aims to promote domestic solar manufacturing in America, which has been a long-standing goal of U.S. presidents. Despite previous efforts through tariffs, the Inflation Reduction Act has been seen as a significant step forward in boosting the domestic solar industry. However, recent legislative developments, including the phasing out of tax credits for solar plants, have cast uncertainty over the future of the U.S. solar market. Experts anticipate challenging times ahead for the industry as it navigates these changes. However, I ultimately believe that it will rebound.
High voltage power lines in Pembroke Pines, Florida.
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Supporters push for slow tax-credit phaseout
The broader impact of rolling back incentives will depend on the details of whatever lawmakers ultimately agree to.
Without tax credits, America would build fewer clean-energy projects and use more natural gas to generate electricity, according to a study this winter commissioned by the Clean Energy Buyers Association, whose members range from Amazon to ExxonMobil to Walmart.
“There will be some companies that go under if they do this. But we will still see solar built. We’ll just see less of it, and it’ll be more expensive,” Lewin says.
Those costs are expected to be passed on to homeowners, renters and businesses through higher electricity bills, according to the Clean Energy Buyers Association’s study.
Limiting renewable energy development also raises concerns about electric reliability, says Heather Reams, president of Citizens for Responsible Energy Solutions, a right-of-center advocacy group.
“You’re looking at the lights going out and the air conditioning going off in the hot summer,” Reams says. “And then not meeting the [electricity] demands of tomorrow, leaving the U.S. behind competitively.”
Industry executives and analysts say clean energy projects are crucial to meet rising power demand from things like data centers and factories, because the plants can be constructed quickly and produce electricity that is relatively cheap.
Reams’ group has called for lawmakers to delay phasing out the tax credits at least until after 2027. “I don’t think anyone’s arguing they need to be here until the end of time,” she says. “But market certainty is something that all business owners understand.”
Manufacturers are already struggling with the looming policy changes.
“If my market is smaller, what kind of decisions do I have to make about investment, hiring and growth on my side to right size my business for that future that will be smaller?” says McDaniel, the Indianapolis solar manufacturer. “We don’t know how much that demand side will get impacted and how much smaller that market will be.”
With Congress under pressure to deliver Trump a tax-and-spending bill by July 4, solar manufacturers and their supporters are running out of time to sway Republican lawmakers.
“They’re getting ready to walk off the field,” Lewin says, “and cede the 21st century to the Chinese.”
sentence: Please remember to turn off the lights before leaving the room.
Don’t forget to switch off the lights when you exit the room.
