US rooftop solar installers restructure, cut jobs as homeowner subsidies expire
Residential solar companies in the U.S. are preparing to see a sharp drop in their business after the expiration?of a federal tax credit which helped fuel more than a decade's rapid growth. This has led to layoffs, reorganizations and even some company failures.
Under President Donald Trump's new tax reform, the 30% federal income tax credits for homeowners who buy rooftop systems will expire at the end 2025. This has led to the most labor intensive segment of the solar sector contracting sharply, at a time when the industry was already weakened by high interest rate and shrinking incentives from state governments.
Chris Castro, Chief Sustainability Officer at Climate First Bank (which offers solar loans), said: "We are going to see a very small market between now and July that will struggle to sustain itself."
Enphase, a company that produces microinverters, which convert solar energy into useable electricity, announced last month that it would reduce 160 jobs or 6% of their workforce and lower operating costs due to the new policy.
Freedom Forever is the nation's number one residential installer. Ben Airth, the policy director at Sunrun's No. 2 residential installer, revealed that they had abandoned ten of their 30 state markets, and laid off around 20% of their employees.
Some companies have failed.
Purelight Power?an Oregon-based installer that operates in a dozen different states filed for Chapter 11 bankruptcy on December 30. This affected about 200 employees.
Employee posts on Linkedin indicate that TriSMART Solar, a Texas-based company, ceased operations at the close of last year. The CEO of the company did not respond when contacted for comment.
Since taking office in 2017, Trump has cut clean energy subsidies, arguing that solar and wind power is more expensive and less effective than fossil fuels. He also dismisses concerns about climate change.
DIRE PROJECTIONS for SOLAR Installations
Last year, solar analytics firm Ohm Analytics slashed their forecast for residential solar panels installations due to the loss the tax credit. The company now predicts that they will decline by 20% in 2026 instead of increasing by 8%.
Wood Mackenzie predicts that installations will drop to their lowest levels since 2020, when the COVID-19 Pandemic frozen the market, and won't recover until the end decade.
According to industry players, this slump could make the United States unable to meet the rising demand for power caused by the proliferation new datacenters. This would undermine a key goal of the administration's policy.
Emily Walker, director, content and insights, EnergySage, a solar marketer online that has expanded into heat pumps and home energy equipment, said: "This is the fastest and easiest way to meet the increasing demand."
The company said that the lack of federal incentives has caused the payback period to be extended from seven years to around 10 years and the cost of rooftop solar systems to increase by approximately $8,000 for homeowners.
Third-party ownership is becoming more popular
However, one segment of the market is protected: Companies like Sunrun, which own rooftop systems, and sell electricity to homeowners through subscription-style contracts, can claim a separate federal?credit, and pass the savings on to their customers.
Many installers who previously sold to buyers on a cash basis or with a loan are now turning towards financiers who offer such TPO models.
Zac Hare is vice president of residential Sales at Lumina Solar in Maryland.
Enphase and Freedom Forever launched financing products for third-party ownership with financial partners, allowing customers to own a system following several years of leasing.
Similar structures are offered by other installers in partnership with IGS Energy, HDM Renewable Finance and similar companies.
Some in the industry believe that leasing can create too many problems for homeowners, especially when it comes to selling their property.
Tom Mills is the director of technical sales for installer Alpenglow Energy, located in Park City, Utah. (Reporting and editing by Nichola Grroom, Nia Williams, and Christian Schmollinger).
(source: Reuters)
