President Donald Trump’s new budget law repeals a key federal tax incentive for residential solar — and rooftop solar installations are about to plunge as a result.
Americans are expected to install 33% less rooftop solar next year than they would if federal incentives were still in place, per an updated analysis from Ohm Analytics. That’s a better outcome than the research firm’s earlier, gloomier forecast, which was based on a version of the law that would have also scrapped a separate tax credit that applies to leased systems.
Already, residential solar is far more expensive in the U.S. than elsewhere, and high interest rates as well as recent state-level policy developments are eating further into the economics of buying panels. Even before the repeal, rooftop solar installations were declining year over year because of these trends.