You may have heard recent news about an executive order signed by President Trump proposing to temporarily suspend funding under the Inflation Reduction Act (IRA). This has raised questions about the future of solar energy, particularly regarding the Federal Solar Investment Tax Credit (ITC), which currently provides a 30% tax credit for qualifying solar installations. While the specifics of this executive order are unclear, and any proposed changes to the ITC require a new law passed by Congress, we believe it is essential to provide some context. We want to emphasize that we are solar experts—not policymakers or tax professionals. We don't have a crystal ball and can't predict everything that will happen—While the future of the ITC is not guaranteed, we remain optimistic about its continuation and the bright future of solar energy.
Here are some important points to keep in mind:
- The ITC is Established Law: The 30% Federal Solar Investment Tax Credit was enacted as part of the IRA in 2022 and is legislated to remain in effect for nine more years. While laws can change, such changes require due process, including budget reconciliation, which takes time and careful negotiation.
- Bipartisan Support for Solar Tax Credits: Solar tax credits have enjoyed bipartisan support for years. For instance, during his last term, President Trump signed legislation in 2020 that extended the solar tax credits rather than allowing them to expire. This demonstrates a long-standing recognition of solar energy's benefits to our economy and national security.
- 18 Republican House Representatives sent a letter to the House Speaker letting him know the importance of the IRA for their state, including deeply Republican states like Georgia, where one of the most popular brands of solar panels has made major investments and is now being produced domestically.
- Tesla Energy (CEO Elon Musk, a huge supporter of President Trump) also significantly benefits from the ITC.
- Economic Impact: The ITC is vital to many major industries and companies, including Fortune 500 organizations with solar projects already in progress and expecting these incentives. Eliminating the ITC would disrupt ongoing projects and plans that contribute to job creation and economic stability. In fact, over 200,000 U.S. jobs—from manufacturing to engineering and installation—depend on solar energy.
- State-Level Support: Many states, including New Mexico, offer additional solar incentives. New Mexico’s state tax credit, currently set at 10%, remains unaffected by federal-level changes, providing continued support for residents pursuing solar energy solutions.
- Solar’s Role in Energy Independence: Solar energy is a cornerstone of America’s energy independence and grid resiliency, particularly when paired with energy storage solutions. As the fastest-growing energy sector, solar is adding more capacity to the grid than any other source during a time of unprecedented electricity demand.
- A Sound Investment: Even without the ITC, solar remains one of the best investments you can make. It offers higher returns than traditional low-risk investments like bonds or savings accounts. Adding battery backup systems further enhances the value and reliability of your solar energy system.
- A Global and Local Responsibility: Addressing climate change is a shared responsibility transcending political boundaries. Solar energy allows us to take meaningful steps toward a sustainable future while enjoying the personal satisfaction of contributing to a cleaner planet.
- Taking Control of Your Energy Future: Regardless of government incentives, investing in solar energy empowers individuals and businesses to manage their energy needs. It’s a step toward sustainability, cost savings, and peace of mind in an uncertain world.
Now is not the time to pause or hesitate. By transitioning to solar energy, you invest in a sustainable future for your home, community, and planet. Together, we can move forward with confidence and determination, knowing that the benefits of solar energy far outweigh any uncertainties.
Thank you for your trust and commitment to a cleaner, brighter future.
Sincerely,
Positive Energy Solar