In a big bill that hurts clean energy, residential solar likely to get hit fast

Key Points

• The GOP spending bill would eliminate the 30% tax credit for rooftop residential solar by the end of the year, reversing incentives from the Inflation Reduction Act.
• Renewable energy companies in North Carolina warn of steep job cuts—Southern Energy Management expects to lay off 50–55 employees, and NC Solar Now projects losing half its workforce.
• While the Senate version delays phasing out utility-scale solar and wind credits, it destroys the residential portion, shifting support toward larger businesses.
• Industry groups say the legislation jeopardizes sector growth, with an estimated $14 billion in clean energy investments already postponed or canceled this year.

WASHINGTON (AP) — As Republicans in Congress rushed forward with a massive tax and spending cut bill, a North Carolina renewable energy executive wrote to his 190 employees with a warning: Deep cuts to clean energy tax credits were going to hurt.

“(The changes) would almost certainly include the loss of jobs on our team,” wrote Will Etheridge, CEO of Southern Energy Management in Raleigh. “I’m telling you that because you deserve transparency and the truth — even if that truth is uncomfortable.”

The bill now in the House takes an ax to clean energy incentives, including killing a 30% tax credit for rooftop residential solar by the end of the year that the Biden administration's Inflation Reduction Act had extended into the next decade. Trump has called the clean energy tax credits in the climate law part of a “green new scam” that improperly shifts taxpayer subsidies to help the “globalist climate agenda” and energy sources like wind and solar.

Businesses and analysts say the GOP-backed bill will likely reverse the sector's growth and eliminate jobs.

“The residential solar industry is going to be absolutely creamed by this,” said Bob Keefe, executive director of E2, a business group that advocates for pro-environment policies.

President Donald Trump's “Big Beautiful Bill” takes aim at renewables broadly, including phasing out tax credits enjoyed by utility-scale solar and wind. But cutting the residential solar credit will happen sooner.

Companies have announced more than $20 billion in clean-energy investments in North Carolina in recent years. Etheridge, whose company installs solar panels and helps ensure buildings are energy efficient, was among many in the sector to lobby Republican U.S. Sen. Thom Tillis of North Carolina for changes in the bill.

Tillis ultimately was one of three Republicans to vote against the measure, but in a sign of Trump’s power over legislators to pass it, Tillis said he wouldn’t seek reelection after Trump said he'd likely support a primary challenger.

Now, Etheridge says losing the tax credit will likely mean laying off 50 to 55 of his workers. He called the elimination of residential tax credits a “bait and switch.”

“I made a decision from being an employee to taking out a loan from my grandmother to buy into my business and put my house on the line” in part because of the stability of the tax credits, he said. He said he'll scramble now to figure out ways to diversify his business.

“If you require a money-spigot from Washington to make your business viable, it probably shouldn’t have been in business in the first place,” said Adam Michel, director of tax policy studies at the Cato Institute, a libertarian think tank.

Michel said he doubted many clean energy companies would go out of business, but “I think that they will be right sized for the market and that the people that are employed with them will find better jobs and more stable jobs in industries that are actually viable and don’t require billions of dollars of federal subsidies.”

Even ahead of debate over the bill, experts at E2 said in May that $14 billion in clean energy investments across the country had been postponed or cancelled this year.

The bill the Senate passed Tuesday removes a tax on some wind and solar projects that was proposed in a previous version and gives utility-scale projects some time to begin construction before phasing out those tax credits.

Karl Stupka, president of Raleigh-based NC Solar Now that employs about 100 people, said the Senate's bill eased the impact on commercial projects “while destroying the residential portion of the tax credits.” Roughly 85% of his business is residential work.

“They took it away from every average American normal person and gave it to the wealthier business owners,” he said.

Stupka said if the bill becomes law, companies will rush to finish as many solar jobs as they can before the credit ends. He expected to lay off half his employees, with “trickle-down” job losses elsewhere.

“It would cause a pretty severe shock wave,” he said.

___

The Associated Press receives support from the Walton Family Foundation for coverage of water and environmental policy. The AP is solely responsible for all content. For all of AP’s environmental coverage, visit https://apnews.com/hub/climate-and-environment