This story originally It appeared Grist It is part of Climate desk collaboration.
Over the past 20 years, homeowners have been able to charge thousands of dollars in federal tax credits to offset the high costs of solar power. Things were to stay that way until 2034. However, this week, the U.S. House of Representatives proposed abruptly ending the incentive at the end of the year. Once this idea survives your home and passes the Senate, it could reverse the financial calculations of running your home in sunlight
“We’ll put solar out of reach for millions of people,” said Glen Brand, director of policy and advocacy at Solar United Neighbors, a nonprofit that encourages the company. Technology adoption. “What the house did is put ordinary Americans in really difficult places. They say they’re basically saying they’re not going to help people who bring about higher energy costs.”
The country’s first solar tax credit came into effect in 1978, It was able to expire in 1985when President Ronald Regan took office. But in 2005, another Republican, Chairman George W. Bush, kicked them out. Lawmakers expanded and adjusted incentives Since then, it has recently been the 2022 Inflation Reduction Act or credited IRA. Until 2032, 30% of the system costbefore the two-year phase-out.
Average cost of The solar system It is located just north of $28,000 in the US today, according to Zoe Gaston, a leading residential solar analyst for energy consultant Wood Mackenzie. This means that the tax credit is worth around $8,500.
Tuesday, Houseways and Means Committee Initial budget adjustment proposal has been released It will roll back the IRA’s massive swath, including support for residential solar. The so-called 25D tax credits still apply to systems installed this year and then disappear completely.
Without a tax credit, solar systems might be like that Still, it makes economic sense Where there are high sun or high electricity prices, or both, the payback period may be increased. For others, math may no longer work.
“We expect sales and installations to rise sharply this year and the market will continue to shrink,” Gaston said. “If homeowners are thinking about solar and can afford it, now is the time.”
25D credits are not the only related tax credits under threat. Another credit 48E can be used by businesses that install solar in homes where residents lease equipment or enter into power purchase agreements. This allows businesses to reduce what they charge for their customers. According to Gaston, more than half of residential facilities currently follow the third-party ownership model.
Instead of eliminating the 48E, the home supports applying restrictions on where the materials in the solar panels come from. While experts still organize the meaning of the proposed language accurately, they generally aim to ban the participation of “foreign entities of concern.”
