US rooftop solar faces first full summer without the 30% tax credit
One year after the One Big Beautiful Bill Act axed the residential solar credit, installers navigate a market built on a subsidy that no longer exists.
Nearly one year after President Donald Trump signed the One Big Beautiful Bill Act into law, the 30% federal tax credit that anchored the US residential rooftop solar market is gone, and the industry is now working through its first full installation season without it.3
That matters for anyone trading US power demand, because rooftop solar has been the fastest-growing source of distributed generation in the country, and its trajectory now hinges on a different set of economics. The legislation also eliminated the 30% credit that applied to battery backup systems, which homeowners increasingly pair with photovoltaics, removing a key incentive for storage deployments at the residential level.3
The policy shift landed at a moment when panel costs were falling and utility bills rising, conditions that historically pushed households toward going solar. Canary Media noted the disconnect in June, observing that cheaper panels and soaring bills would normally point to a rooftop boom, but that is not what the data show.3
Solar companies are not speaking with one voice about what comes next. Domestic manufacturers blitzed Capitol Hill on Wednesday (2026-06-17) to urge lawmakers to preserve some form of clean energy tax support, arguing that the expiration conversation overlooks the industry's biggest challenge: competition from China.2
Utility-scale developers, by contrast, front-ran the deadline. Ahead of the One Big Beautiful Bill Act's July 4 construction commencement cutoff for wind and solar projects to qualify for Inflation Reduction Act investment and production tax credits, developers safe-harbored a massive pipeline of projects, analysts at Utility Dive reported on Thursday (2026-07-02).4
That pipeline means large-scale renewable additions will keep flowing for years, even as the residential market recalibrates. An MIT study released on Wednesday (2026-07-08) found three-quarters of the clean electricity capacity that the IRA would have added to the US grid is still likely to come online despite the tax credit phaseouts.5
The split between residential and utility-scale fortunes is sharpening the industry's internal debate. Some renewable energy leaders are now asking openly whether expiring clean energy tax credits are still necessary at all, a position that puts them at odds with domestic solar manufacturers who say the credits remain vital to compete with Chinese supply chains.2
Traders watching power prices should pay attention to the PPA side of the ledger. Some analysts expect rising wind and solar power purchase agreement prices now that the construction deadline has passed, as developers seek to compensate for the lack of tax credits in their revenue stacks.5
The residential market is a slower burn. Rooftop installations were already softening before the credit's elimination, and the first summer without the 30% incentive will show whether lower panel prices and higher utility bills can close the gap left by the subsidy. Battery storage, stripped of its own credit, faces a similar test.
The White House's own modeling assumes aggressive growth in clean energy through deregulation and "animal spirits," but independent modellers think that would spur only a fraction of the expansion the administration is promising, according to an Economist analysis published on Sunday (2026-05-17).1
That gap between official and independent projections is the key uncertainty for power markets. If the administration's forecast holds, cheap renewables will keep flooding the grid and pressuring wholesale power prices. If the independent view wins, the US will lean harder on gas-fired generation to meet demand growth.
The immediate signal to watch is the PPA market. With the safe-harboring rush complete, new project announcements will reveal whether developers can actually secure contracts at the higher prices needed to replace the lost credits, or whether buyers balk.4
Residential storage is the quieter risk. The battery credit's elimination removes a margin buffer for installers who had built business models around pairing panels with storage, and the economics of that pairing are now being tested in real time across the US sunbelt. Roofing crews are still working, but the order books tell the story.