As lawmakers in the House begin to hash out the budget reconciliation process on Capitol Hill, the solar industry is up in arms.
The House Ways and Means Committee’s draft reconciliation package walks back most of the Inflation Reduction Act’s valuable energy investment and production tax credits. Starting in 2028, it decreases the value of credits for technologies including solar, batteries, wind, and nuclear; after 2031, it sunsets them completely. And it cuts loose the residential solar credit 25D much earlier, at the end of this year.
Another key change: The committee limited eligibility for 45Y and 48E, the long-awaited tech-neutral tax credits for clean electricity production and clean electricity investment, respectively. To qualify for the credit under the proposed package, projects must already be placed in service — and not languishing in an interconnection queue or awaiting electrical equipment trapped in a backlog. Given the many barriers to building utility-scale projects and the timeline for sunsetting the rules, this means new projects are unlikely to qualify for many years, if ever.
The process of marking up the draft is already underway, and is expected to last at least until July, though it could go as late as September. If these IRA tax credit cuts survive the reconciliation process (which is a big if) it could be devastating for many sectors. But those sectors are refusing to go down without a fight.
In the weeks and months to come, the solar industry — the largest and most commercially established of the impacted sectors — plans to lobby lawmakers to preserve the tax credits that have already spurred so much investment. And at the same time, the residential solar industry has to sell, sell, sell to their customers while the credit is still in place, before prices potentially go up.
Residential- and utility-scale concern
Companies and organizations large and small are entering the fray. TR Ludwig is the CEO of Brooklyn SolarWorks, and he is particularly focused on 25D, which subsidizes homeowners’ purchase of residential solar. The proposed change, he told Latitude Media, “effectively eliminates customer choices on how to go solar.”
“Now that it is out there it’s GO TIME on two fronts — fight to keep 25D in play longer than a few more months, and sell like it’s the end of our industry,” said Ludwig via email (emphasis his).
He’s particularly concerned about the small residential solar companies that are his peers, especially those who remain heavily reliant on Chinese supply chains and are therefore vulnerable to both tax credit and tariff upheaval. (Brooklyn SolarWorks is a part of the Amicus Solar Cooperative, a member-owned group of roughly 85 independent solar energy companies.)
The first part of his plan is self-evident: It’s crunch time for the industry to make its case to the lawmakers who have control over the IRA that 25D and other tax credits are worth keeping around. But the second part is more complicated. On the one hand, an end-of-year deadline for cheaper solar systems is likely to make them more immediately appealing to consumers than ever. On the other, Ludwig is worried about how challenging it will be for small residential solar companies like his to meet that panic-fueled demand.
Now that it is out there it’s GO TIME on two fronts — fight to keep 25D in play longer than a few more months, and sell like it’s the end of our industry.
The potential for panic buying “might be okay in normal circumstances,” he said, “but with tariffs and all the other uncertainty out there, it’s not a great market dynamic.”
On the other side of the solar spectrum is the Solar Energy Industries Association, the influential trade association that represents all types of solar, from rooftop to utility-scale. And as Abby Hopper, SEIA’s president and CEO, put it on LinkedIn, this is the moment to “sprint a marathon.”
“We’re no longer anticipating the what if… now we know what we are dealing with,” she wrote. And the bottom line, she added, is that “this is a bad bill.” SEIA’s official press release made it clear that the organization plans to continue to speak with elected officials to — and here the group called back to the Trump administration’s chosen language — “ensure that American energy dominance prevails.”
Continuing to push
This process is by no means new. In the weeks leading up to the budget reconciliation process, there was a many-pronged effort to impress upon lawmakers the importance of the IRA and the tax credits specifically. And a key part of that pitch was centered around energy costs.
“Cutting federal clean energy tax credits would drive up energy costs not just for solar customers, but for all consumers,” Hopper told Latitude just a month ago, before the draft was released. “It’s critical that our elected leaders understand the impact of the tax credits and the cost savings they bring to their constituents.”
Meanwhile, in late April, a group of nearly 300 companies and trade organizations wrote to House Speaker Mike Johnson and other Republicans in leadership encouraging them to preserve the energy tax structure.
“Companies plan with these tax incentives in mind and rely upon them for capital allocation, planning, and project commitments — all of which would be jeopardized by premature credit phase outs or additional restrictions,” the letter reads. “Further, these tax credits are critical to expanding economic development and growing the economy.”
The Solar Energy Industries Association has been at the forefront of this effort, spending more on lobbying in the first quarter of 2025 than it has in any other quarter in more than a decade, at $710,000.
Brooklyn SolarWorks has also been hitting the pavement. Ludwig told Latitude last month that the Amicus Solar Cooperative has a paid lobbyist in Washington, D.C., targeting members of Congress who they believe can be swayed toward supporting the solar ITC in general, and the 25D tax credit in particular.
The goal, he said, is “to just shed more light on the fact that there’s a really significant economic engine that’s been built here in America around this 25D credit serving residential customers. And if you were to take that away, I do see that being extremely harmful to broad swaths of American solar installers and potential customers.”
Editor’s note: This story was updated on May 14 to correct the end date for the residential solar credit 25D; it is the end of calendar year 2025, not fiscal year 2025.
