Post-Election Industry Updates: Navigating Consumer and Business Uncertainty

Following the election, the clean energy industry in the U.S. is left with a lot of uncertainty. So much of the growth in renewable energy jobs, manufacturing, generation, and consumer adoption across the country over the last few years has been driven by comprehensive incentives established by the Biden Administration’s Inflation Reduction Act (IRA).

But with President-elect Trump returning to office and Republican control of both the House and Senate, we’ve received lots of questions from our home and business owners, installers, electrical and HVAC contractors, and more about what the election means for clean energy broadly, and solar specifically, over the next few years.

To help your business continue to thrive under the new administration, here's an overview of what we know and don’t yet know to help you navigate the next few months until legislative priorities of the new administration become clear.

Key takeaways

Many industry analysts expect that portions of the IRA will be cut by the incoming Trump Administration as a way to help pay for extending tax credits.
At the same time, a full repeal of the IRA seems unlikely, with Congress taking a scalpel instead of a sledgehammer to the provisions.
While solar tax credits may not be first on the chopping block, they could still be reduced or phased out earlier than planned, lending some urgency for current solar shoppers to get in before any potential changes to the ITC.

What we know about the IRA under a second Trump Administration

We’ve connected with industry analysts, political consultants, and more to get a sense of what the impact of the election is likely to be on clean energy incentives from the federal government under a second Trump Administration.

At a high level, there is a key tension at play: To extend expiring personal tax cuts, credits and deductions, the new government will have to reduce expenditures in other areas, and the IRA offered $369 billion in incentives for clean energy growth in the country. But the IRA’s incentives provide many benefits in Republican-leaning districts and states, making parts of the policy popular across the political spectrum. Here’s what we’re hearing about how everything will shake out.

Paying to extend expiring tax cuts

Many aspects of the Tax Cuts and Jobs Act (TCJA), which passed in 2017 under the first Trump Administration, expire at the end of 2025. On the campaign trail, Trump promised to extend these tax credits, which will come at a cost.

The Congressional Budget Office estimates that extending all of the expiring provisions would reduce government collections by more than $3 trillion over the next decade. To offset these extensions, the incoming administration will need to find other places to reduce government spending. That need plus Trump’s pattern of support for fossil fuels put clean energy incentives under the IRA on the chopping block. And with a unified government, the GOP could repeal the provisions of the IRA through budget reconciliation since that’s the legislative mechanism through which the IRA was initially implemented and allows for changes with a simple majority.

The IRA invests heavily in Republican districts

At the same time, the IRA provides many benefits beyond just an extension of the solar investment tax credit (ITC). The majority of these benefits, like for clean energy manufacturing, invest disproportionately in Republican-leaning congressional districts.

Congressional Republicans know this and have voiced their support for retaining these jobs. It turns out that domestic manufacturing and local jobs are very popular! So despite being among the most expensive provisions in the IRA, most analysts believe that the domestic manufacturing tax credits (45X) will remain intact.

Trump’s stated intentions around tariffs

But tax credits aren’t the only tool available to incentivize domestic manufacturing—tariffs are also an option. During his first term,Trump used provisions in the Trade Act of 1974 to levy tariffs on solar panels, many of which were renewed by the Biden Administration.

Between that previous preference for tariffs and Trump’s rhetoric on the campaign trail, it’s likely that he will look to tariffs again as a way to incentivize domestic manufacturing. That won’t make domestically manufactured goods less expensive, but it will make foreign-made products more expensive to import, which could continue to drive an increase in American-made solar and storage products. And, based on prior experience with solar tariffs, it’ll also likely increase the average price of solar across the board, which has been near all-time lows in the first half of 2024.

What this means: Using the scalpel, not the sledgehammer

Taken together, our understanding is that, while there are likely to be some reductions and changes to the incentives in the IRA, the GOP is more likely to take a scalpel to the policy than a sledgehammer. In other words, while a full repeal is possible under a Republican-controlled government, it is unlikely.

So what could be first on the chopping block? Electric vehicle tax credits have received the most attention from the GOP so far, and would seem to be near the top of the list. Similarly, large funds like the Loan Program Office or Greenhouse Gas fund—which we’ve heard informally referred to as “giant piles of money”—may be next. While that means solar tax credits aren’t top of the list, we could ultimately see a drop in the ITC value, or the phase out moved earlier than the current plan for the mid 2030s.

Tips to navigate consumer and business uncertainty

Ultimately, there’s a lot we won’t know until everyone gets in office and begins the task of establishing legislative priorities. Here are our recommendations to thrive amidst this uncertainty, whether it lasts until the inauguration or throughout the next four years:

Over-communicate with consumers

It’s always a good idea to properly set expectations with consumers. That’s true now more than ever. Lay out our expectations for what might happen to clean energy incentives and why. You’re providing valuable data points to homeowners who are trying to make a decision about whether or not now is the right time to invest in solar.

Be clear about what we don’t know yet

As a part of over-communicating, don’t be afraid to lean into what we don’t know yet. We don’t know what the legislative priorities will be for the new administration, and we don’t have a sense of timing for changes to the IRA. We can be reasonably confident that the IRA won’t be fully repealed, but we also don’t know what parts might be.

Now is the time to showcase incentives
There hasn’t been much urgency for residential solar since the IRA went into effect, but given the uncertainty around the future of solar tax credits. now is a perfect time for homeowners to move forward and take advantage of the full 30% ITC. We don’t know what will be chopped or when it will happen, so for cost-conscious consumers who want to maximize their ITC benefit, now is the time to go solar.

EnergySage remains committed to solar in the U.S.

We launched the EnergySage Marketplace in 2012, making this the fourth presidential election cycle we’ve been through as a business. From our perspective, one thing is certain: Our mandate to help homeowners electrify their lives is as strong as ever.

We’re committed to continuing to grow this industry and support consumers and installers regardless of federal incentives. And we’re excited to be on this journey together with you, our partners. Please continue to lean on our resources and our Partner Success Team to answer any questions you or your customers have as we navigate the next four years of clean energy incentives together.