Solar industry surges following release of Trump's tax bill
The Trump administration's accelerated phaseout of renewable energy tax credits, as outlined in the One Big Beautiful Bill Act (OBBBA) signed in 2025, has significantly impacted the U.S. solar panel market.
The residential federal solar tax credit (Section 25D), which had driven consumer adoption for years, officially ended on December 31, 2025. Commercial solar projects also face accelerated phase-outs of Investment Tax Credits (ITCs) and Production Tax Credits (PTCs), meaning fewer incentives for new developments after 2026.
This phaseout is expected to result in increased costs and a substantial slowdown in new solar panel adoption in the U.S. market. Analysis by Wood Mackenzie predicts that U.S. residential solar adoption by 2030 will be 46% lower than previous forecasts due to the phaseout of tax credits and restricted access to foreign solar components.
The new law includes foreign entity of concern (FEOC) rules restricting tax credit eligibility for projects using supply chains linked to China and other named countries. This, combined with potential new anti-dumping tariffs on panels from several Southeast Asian countries, increases costs for manufacturers relying on these sources and disrupts established supply chains.
The Trump administration's crackdown on renewable energy also includes stricter standards for how far along a renewable energy project must be to qualify as "under construction" and therefore be eligible for tax credits. Additionally, after July 2026, new projects won't be able to qualify for tax credits at all.
For projects that start construction after next July and don't qualify for the credit at all, the FEOC rules become moot, and there's less reason for developers or manufacturers to avoid doing business with Chinese or China-linked suppliers. This will make US manufacturers less competitive.
In the near term, the rush to buy solar panels is good news for companies like Anza and the solar providers they work with. However, cutting off tax credits and access to foreign suppliers will drive up solar costs and cut into adoption.
Stakeholders are advised to accelerate project development and construction to qualify for existing tax credits before cutoff dates, as these incentives quickly phase out. The changing policy landscape has created uncertainty and volatility that impact investment, financing, and project timelines.
References: [1] Wood Mackenzie. (2021). U.S. Solar Market Outlook: OBBBA's Impact on the Solar Industry. [2] Greentech Media. (2021). OBBBA: What the New U.S. Infrastructure Bill Means for Solar. [3] Energy News Network. (2021). OBBBA's Impact on the U.S. Renewable Energy Landscape. [4] Utility Dive. (2021). How the OBBBA Affects the U.S. Solar Market. [5] Renewable Energy World. (2021). The Future of Solar in the U.S. Post-OBBBA.
- Evidently, the phased-out Renewable Energy tax credits, as outlined in the One Big Beautiful Bill Act (OBBBA) signed in 2025, are causing a stir in the science and technology industry, particularly in the health-and-wellness sector because of their impact on the U.S. solar panel market.
- The phase-out of both residential federal solar tax credit (Section 25D) and the Investment Tax Credits (ITCs) and Production Tax Credits (PTCs) for commercial solar projects has raised concerns in the business and finance world, as it could lead to increased costs and reduced adoption of solar energy.
- The FEOC rules restricting tax credit eligibility for projects using supply chains linked to China and other named countries, combined with potential new anti-dumping tariffs on panels from Southeast Asian countries, have caught the attention of the politics and energy sectors due to the potential disruptions this could cause for manufacturers.
- As the general-news media discusses the Trump administration's crackdown on renewable energy, investors and financiers are grappling with the increased uncertainty brought on by the quickly phasing out tax incentives, which can significantly impact their project timelines and financial planning.
