Under Trump’s signature domestic policy law, solar tax credit ends on Dec. 31
, Washington Correspondent | September 10, 2025 | Energy & Environment
WASHINGTON — After Congress voted to end a federal tax credit for rooftop solar installations, homeowners are galloping to buy, install and hook up panels to their houses before the year is out.
As part of President Donald Trump’s signature new domestic policy law, lawmakers voted to phase out a 30% tax credit for residential solar, which could defray about $9,000 of the cost of a project, on Dec. 31, roughly a decade before scheduled.
Now homeowners are racing to purchase, rack and connect solar panels to the electric grid to meet that deadline.
“It is a rush,” Lyle Rawlings, president and co-founder of the Mid-Atlantic Solar & Storage Industries Association, said in an interview with NJ Spotlight News. “Anybody who’s been thinking and dreaming of doing solar on their home understands that they have to do it now.”
Solar companies are struggling to keep up with demand, said Rawlings, president of Advanced Solar Projects, a commercial solar company based in Flemington. “Salespeople are overloaded.”
After Congress passed the new law, online solar marketplace EnergySage hit an “all-time high in customer inquiries in July,” the company said, and the number of New Jersey customers who registered to receive quotes from local installers increased 109% from June to July, according to data from the firm. “Pedal to the metal right now,” Emily Walker, director of content and insights at EnergySage, said in an interview with NJ Spotlight News.
Expiration of the credit lands as the U.S. solar industry is under strain from Trump’s tariffs, trade disputes, a hazy business outlook and a federal administration hostile to renewable energy, solar included.
Over the summer, the Environmental Protection Agency canceled $7 billion in funding for solar grants, hundreds of millions of which had been slated for New Jersey.
‘People who’ve been thinking about going solar for years, and who are choosing to do it now, can help both their own bills and everyone else’s by going solar before the end of the year.’ — Elowyn Corby, Vote Solar
Even before the budget law went into force, the residential solar industry was in trouble. Solar installations dropped 31% in 2024, versus the previous year, and large companies in the field — SunPower, Sunnova and Mosaic Solar — filed for bankruptcy.
The new federal law, which almost every Republican in Congress voted for and every Democrat voted against, also phased out a 30% federal tax incentive for commercial-scale solar projects — the sort of installations that might go atop a big-box store.
That credit will now expire in July 2026, instead of running through 2032, and businesses must meet tighter thresholds to qualify.
“There’s a lot of anxiety, and there’s also a lot of creativity and curiosity about new opportunities,” Elowyn Corby, Mid-Atlantic regional director for Vote Solar, an advocacy group, said in an interview with NJ Spotlight News. “People are getting a lot of calls.”
Two possible edges for rooftop panels: Smaller solar projects can help the electricity grid by cutting down on demand during peak hours, and they can be connected in a matter of days, not months or years, Corby said.
By cutting off the tax credit, Congress forced people who may have been unsure about residential solar to commit, Corby said. “People who’ve been thinking about going solar for years, and who are choosing to do it now, can help both their own bills and everyone else’s by going solar before the end of the year,” she said. “That’s kind of an unexpected upside.”
Ray Cantor, deputy chief government affairs officer at the New Jersey Business & Industry Association, a trade group that represents companies in the state, said solar firms are worried in the state.
In an interview with NJ Spotlight News, Cantor, referencing residential solar in particular, said he expected a “significant collapse in that segment of the market.”
“Without the credits, the economics don’t work nearly as well,” he said.
Interest rates and tariffs have injected uncertainty into the industry, Walker said. “But the biggest thing on everyone’s mind is the [budget] bill and the solar tax credit ending for installation completed after this year,” Walker said, alluding to the new law. She predicted that “a lot of small [solar] businesses will no longer exist next year.”
About 35% of installers EnergySage surveyed nationally expect to stop taking new customers by Oct. 1, Walker said.
Complicating the New Jersey solar landscape further is the looming threat of “retroactive tariffs” — import taxes on solar goods that have already arrived in the U.S. — after an international trade court ruled in August that a two-year moratorium on solar tariffs former President Joe Biden issued in 2022 was illegal. That moratorium could cost the industry tens of billions of dollars, according to industry estimates.
“A market where that can happen is a market where you can’t take the chance participating,” said Rawlings of retroactive tariffs.
Benjamin J. Hulac covers New Jersey’s congressional delegation and federal decisions that affect the state. Before joining NJ Spotlight News, he wrote for CQ Roll Call and Climatewire, covering Congress and federal agencies as well as environmental, energy and transportation policies and programs.
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