As federal tax credits expire, solar installers look to local incentives

This story was originally published by WFAE.

Residential solar installers across the U.S. are racing to finish projects before the end of the year, as a key federal tax credit expires and new “Made in America” requirements squeeze the solar supply chain.

The federal residential clean energy tax credit, which covers 30% of the cost of rooftop solar systems, is set to expire at the end of 2025. On a recent job site in Concord, North Carolina, a crew from NC Solar Now drilled panels into the roof of a single-family home as roof lead Jay Reed fastened his safety harness. Reed said uncertainty around federal incentives has left many in the industry uneasy.

“Everyone’s a little nervous about the beginning of this next year because everything kind of changed with the incentives that everyone were getting to get solar,” Reed said.

Since July, homeowners have been rushing to install solar systems while the credit remains available. Reed’s company, like many others, has been booked through the end of the year. Jesse Solomon, NC Solar Now’s director of sales, said the company has been fully scheduled since August.

“Fortunately, we’re already selling into 2026 pretty heavily with no tax credit,” Solomon said.

Local and state incentives have helped offset the loss of federal support. In Charlotte, homeowner Hope Lifsey installed solar panels and a home battery through Solarize, a public-private partnership that lowers costs by pooling customers. The more residents who enroll, the less each participant pays.

Lifsey said she signed up after repeated power outages left her home without electricity during extreme heat. “It’s just ridiculous, and one day it was out for seven hours and it was like 98 degrees outside,” she said.

Solar panels alone wouldn’t keep the lights on during an outage — they automatically shut off to prevent backfeed into the grid. In addition to the group-purchase discount, Lifsey received several thousand dollars from her local utility to install a battery system. Now, her home can circulate energy off-grid whenever the power goes out. 

Similar programs exist in other states, such as California, Connecticut, and Massachusetts. Some states, like Colorado, offer an energy storage tax credit. 

When combined with the federal tax credit, those incentives made solar affordable for Lifsey. She estimated her system will pay for itself in about eight years.

However, many of those local programs are temporary. The Solarize program Lifsey used ended in November, and the battery incentive she received is part of a pilot project.

In September, the state’s largest electric utility, Duke Energy, proposed creating a battery incentive program for businesses. Utilities in other states are exploring similar options. 

Reed, with NC Solar Now, worries that if those incentives disappear, demand for rooftop solar will decline.

“If they’re not getting those same incentives, then less people are going to get it,” he said. “There’ll be less work, and eventually that’s going to lead to people having less jobs.”