President Donald Trump was re-elected this week and that could spell a big change for solar customers in Minnesota and across the country. Some of the election results for down-ballot candidates are still being tallied, but there is one thing analysts agree on — our country’s clean energy transition will be affected.* In particular, the switch to solar energy will be curtailed or even stalled altogether if Trump fulfills his campaign promise to repeal the Inflation Reduction Act.

A little history: Since 2005, the United States has incentivized solar construction by passing along tax credits to homeowners, utilities, and businesses that install solar panels. In 2022, the Investment Tax Credit, or ITC, dropped to 26 percent and was set to drop again to 22 percent in 2023 and expire in 2024. The Inflation Reduction Act, which was passed in 2022, extended the ITC at 30 percent through 2034. 

During his first term, President Trump showed little interest in extending solar tax credits, which were already set to expire. It’s hard to know the future, but during his rallies, President-elect Trump could be seen waving his arms in the air as crowds chanted, “Drill, Baby, Drill.” For what it’s worth, oil and gas industries have long benefitted from tax subsidies. So have many other industries, such as agriculture and real estate. 

The solar industry has seen a consistent rise in new construction since the first ITC was set in place. One of the provisions in the 2022 Inflation Reduction Act was an extra 10-percent incentive for solar customers to us American companies that produce solar panels. That transition from the solar industry was slow. After talking with industry representatives it appears the American solar market was waiting to see how the 2024 election would turn out. Their fears were realized. It’s hard to imagine corporations continuing to pump money into the American-made market while the future of the tax credits are in limbo. 

Another possible casualty in the solar world is the blossoming world of solar for non-profits. Since a tax credit is basically relief from taxes owed the Federal government, non-profits like churches and schools, which don’t pay taxes, were unable to afford solar. The Inflation Reduction Act in 2022 passed a provision that allowed non-profits to get a direct-pay subsidy from the government for solar equal to the tax credit. The passage of this provision caused many school districts, churches, and other non-profits to offset their energy with solar panels. That incentive, too, is now in jeopardy. 

What we know now is that the Inflation Reduction Act is still in place for 2024 and into 2025. For anyone who has considered going solar, now is the time to act. Solar tax credits, according to analysts, will still be in place for another year. That could mean big things for the solar industry. Recently, California changed its net metering law. During the last quarter of installations, solar interconnections spiked up 188 percent over the previous year. 

What does this mean? There’s still time to get your solar. If the new administration is able to follow through on its campaign promise to repeal the Inflation Reduction Act, solar projects placed in service in 2025 would still qualify for the 30 percent tax credit.** The time is now to put up solar. 

If you are a member of a church or a board member on a non-profit, reach out to get a solar quote. If you’ve dreamed of solar, take advantage of the tax credits while they are still out there. In Minnesota, lead times for solar can vary between 2-4 months. If California is any indication, the solar industry will see a spike in new customers.*** That is great news, but it could lead to longer lead times. 

The time to go solar is now. Don’t wait and see what happens. If you do, it might be too late. 

* Trump plans to repeal climate progress. https://www.politico.com/news/2024/09/05/trump-inflation-reduction-act-00177493

** Always seek the advice of a tax professional. 

*** California solar spikes in wake of new net metering rules.  https://www.canarymedia.com/articles/solar/californias-rooftop-solar-policy-is-killing-its-rooftop-solar-industry