Solar tax credits are ending. Here’s why that could be good for solar

illuminem summarises for you the essential news of the day. Read the full piece on The Washington Post or enjoy below:

🗞️ Driving the news: Federal rooftop solar tax credits in the U.S.—worth an average of $8,000 per home—are set to expire on December 31, under President Trump’s One Big Beautiful Bill
• While the end of these incentives is expected to cause a short-term decline in installations, experts argue that phasing out subsidies could ultimately improve the solar industry by exposing inefficiencies, lowering long-term costs, and driving better business practices

🔭 The context: For years, generous tax credits helped boost rooftop solar in the U.S., but the cost of installing panels remains two to three times higher than in other developed countries
• Analysts point to “soft costs”—such as sales commissions, financing fees, permitting delays, and opaque pricing—as the primary culprits
• Some industry players argue that subsidies have helped mask these structural problems and allowed predatory sales tactics to persist

🌍 Why it matters for the planet: The U.S. solar sector needs to scale rapidly to support decarbonisation goals
• If ending subsidies leads to increased transparency, reduced soft costs, and more competitive pricing, solar could become accessible to more households
• However, abrupt subsidy cuts risk temporarily slowing adoption and increasing emissions
• A more efficient, subsidy-free market could accelerate growth over the long term while reducing consumer barriers 

⏭️ What's next: Analysts expect a near-term slowdown, but forecast a market rebound by 2028, with home solar installations eventually surpassing levels projected under a subsidy-driven model
• Innovations like SolarAPP+—a streamlined permitting platform supported by the U.S. Energy Department—could help reduce delays and costs
• As solar hardware prices continue to fall, pressure will mount on the industry to cut non-hardware costs and deliver simpler, more transparent customer experiences

💬 One quote: “Over the long term, this will be a good thing for the industry.” – Michelle Davis, Head of Global Solar, Wood Mackenzie

📈 One stat: Soft costs—including permitting, marketing, and financing—now account for 65% of the total cost of residential solar in the U.S.

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