Congress Must Not Ignore Residential Solar Tax Credit Inequities
Courtesy of RMI.
By Ryan Shea & Russell Mendell
Through the Justice40 Initiative, President Biden has made clear that bringing clean energy benefits to marginalized and low-income communities is a priority. Right now, low-income households experience up to three times higher energy burden (the percent of household income spent on energy costs) than high-income households. Rooftop solar is one of many important solutions available to help alleviate this burden. When financed, it can immediately lower household energy bills with no money down in many parts of the country.
Unfortunately, rooftop solar has disproportionately benefited high-income and White residents. While low-and moderate-income (LMI) residents make up 43 percent of the US population, only 21 percent of residential solar installations benefited these communities in 2019. On top of that, nearly half of communities with a majority of Black residents did not have a single solar system installed.
This disparity is exacerbated by the inequitable design of existing tax credits that incentivize residential solar. The solar investment tax credit (ITC) provides minimal advantage for those with little to no federal income tax — and thus have little use for a tax break.
In its version of the reconciliation bill, the US House of Representatives has included a direct pay option under section 48 (ITC 48) for business- and utility-scale renewables. This would allow entities without sufficient tax liabilities to take full, direct advantage of the ITC and accelerate renewable deployment. But, importantly, the current bill language does not extend the same direct pay provisions under section 25 (ITC 25D) for residential solar.
It is essential for Congress to change ITC 25D from a tax break to direct pay to help bring clean energy to more Americans, particularly LMI Americans. Specifically, the change would:
- allow substantially more homeowners to use the tax credit,
- further enable clean energy sources to help alleviate LMI energy burden, and
- bring solar jobs to LMI communities.
Residential Direct Pay Makes the Tax Credit Available to Substantially More Households
The House’s currently proposed version of the residential tax credit under section 25D can offset the upfront cost of a typical solar photovoltaic system by around $5,000 (assuming $3.30 per watt installed and a 5 kW system). That discount would be far out of reach for almost all LMI households, and even many middle-income households, given that their tax burdens often fall below that threshold.
Around 7 in 10 American tax filers would not have enough annual tax liability to receive the full ITC 25D benefit, according to 2018 data from the IRS. And the more than 4 in 10 Americans that do not have any federal income tax liability at all would see zero benefit.
Consider a married couple with one child making a combined income of $60,000 per year (around 70 percent of the median family household income). Given their annual federal tax liability of around $1,500, they would see only 30 percent of the House’s currently proposed residential solar tax credit in the year that they purchased the system. The inequities are even starker for low-income households. If that same household made $45,000, they would likely not receive any benefit.
While the current ITC 25D does have a carryforward provision that allows taxpayers to apply the rest of the credit in future years, most homeowners do not realize this complicated provision. Even with this policy in place, LMI households likely cannot wait years to receive the full amount, and the bottom half of earners still receive little to no benefit from the incentive.
Residential Direct Pay Can Help LMI Residents Reduce Their Energy Burden
Changing the ITC 25D from a tax break to direct pay would not only lower the upfront cost of solar for residents, but it could also be the catalyst for LMI homeowners in many states to lower their energy costs. For the more than 100 million American households without the tax liability to utilize the full ITC 25D, changing this benefit to direct pay could be the difference between rooftop solar lowering or increasing their bill.
For LMI households without any federal tax liability, an average 20-year rooftop solar loan would reduce their energy burden in just 19 states under the current policy, according to an analysis using RMI’s forthcoming Residential Solar Calculator. Direct pay for ITC 25D would bring this number to 38, doubling the number of states where families below the federal income tax threshold would be able to use a solar loan to save money with no money down.
This change would also decrease utility bills by around 20 percent. This could significantly accelerate the solar market in these 19 additional states and bring the co-benefits to more LMI communities.
Residential Direct Pay Is Essential to Bring Solar Jobs to LMI Communities
By modifying the ITC 25D to direct pay and opening up the solar market to a previously untapped portion of the country, the solar industry can also bring economic development and workforce benefits to LMI communities.
If LMI communities could match the levels of annual rooftop solar installations that are currently seen in high-income neighborhoods, an additional 1.2 GW of residential solar economic activity could take place in LMI communities each year. This would generate nearly $4 billion more in economic activity (assuming $3.30 per watt installed) and over 26,400 more jobs each year (assuming 22 residential solar jobs per MW). To realize this full impact, solar job training will also be essential to ensure a smoother, more equitable transition to cleaner energy sources, while maximizing economic benefits.
It’s Time for Congress to Take Action
Right now, Congress has a once-in-a-decade opportunity to design equitable climate policy that will ensure all communities can access the benefits of renewable energy.
Fortunately, momentum is building. The Residential Renewables for All coalition recently formed to advocate for this change to the residential solar tax credit, which 25 US Senators have urged leadership to include in reconciliation. The coalition includes more than 350 environmental justice advocates, environmental justice organizations, and renewable energy businesses.
For too long, the ITC 25D has made solar deployment more inequitable. To level the playing field and reduce the energy burden for lower-income Americans, all households should have the same opportunity to access residential solar incentives. This simple change can lead to more equitable solar deployment and bring the economic, workforce, health, and emissions benefits to the communities that need them most.
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The US solar industry put nearly 18 gigawatts (GW) of new capacity on the grid in the first half of 2025. Even as the Trump administration rolled out anti-clean energy policies, solar and storage still made up 82% of all new power added to the grid in the first six months of the year. But the growth picture isn’t as sunny as it looks, according to the SEIA.
Trump’s big bill (HR1) and new administration actions targeting solar have dragged down deployment forecasts. The latest US Solar Market Insight Q3 2025 report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie warns that these policies could cut 44 GW of US solar growth by 2030 – an 18% decline. Compared with pre-HR1 forecasts, that’s a total loss of 55 GW, or 21% fewer solar projects by 2030.
“Solar and storage are the backbone of America’s energy future, delivering the majority of new power to the grid at the lowest cost to families and businesses,” said SEIA president and CEO Abigail Ross Hopper. She added that the administration is “deliberately stifling investment, which is raising energy costs for families and businesses, and jeopardizing the reliability of our electric grid.” Still, Hopper stressed that demand will keep the industry growing because “the market is demanding what we’re delivering: reliable, affordable, American-made energy.”
Ironically, the report found that this year, 77% of new solar capacity has been built in states Trump won. Eight of the top 10 states for new installations — Texas, Indiana, Arizona, Florida, Ohio, Missouri, Kentucky, and Arkansas — all went red in 2024.
On the manufacturing side, the US added 13 GW of new solar module capacity in the first half of the year, with factories ramping up in Texas, Indiana, and Minnesota. That brings total domestic capacity to 55 GW. But momentum stalled in Q2, with no new upstream manufacturing investment as federal policy uncertainty spooked private capital.
Looking ahead, SEIA and Wood Mackenzie expect solar deployment to land 4% lower than pre-HR1 projections by 2030. Near-term solar growth is buoyed by projects already underway, developers racing against tax credit deadlines, and surging electricity demand as new gas generation becomes pricier and less reliable.
The report also highlights the risk of federal permitting changes. A Department of the Interior order throws up obstructions for solar permits, threatening about 44 GW of planned projects. Arizona, California, and Nevada are expected to be hit hardest.
“There is considerable downside risk for the solar industry if the federal permitting environment creates more constraints for solar projects,” said Michelle Davis, head of solar research at Wood Mackenzie. “The solar industry is already navigating dramatic policy changes as a result of HR1. Further uncertainty from federal policy actions is making the business environment incredibly challenging.”
SEIA has urged Interior Secretary Doug Burgum to reverse course, warning that the administration’s approach could mean lost jobs, higher power bills, and a weaker US economy.
The stakes stretch beyond energy: SEIA notes that if solar growth stalls as projected, the Trump administration will blow its chances at winning the global AI race – something it’s keen to do. Last week, the trade group rolled out a grid reliability policy agenda calling on leaders at all levels of government to shore up the grid with solar and storage to meet surging demand.
Read more: FERC: Solar + wind made up 91% of new US power generating capacity in H1 2025
The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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Inflation is back, with prices rising 2.7% compared to last year (and that doesn’t include food, fuel, or rent, which are up even more), which is objectively bad. But it’s not true that everything is getting more expensive. These inflation-busting EVs are heading into 2026 with prices that are lower than they were in 2025!
There’s plenty of reasons for prices to go up or down in a market – everything from tariffs and taxes and increased domestic production to changes in inflation or even just a manufacturerwillingness to take a smaller profit on per-unit sales in order to drive volume. There’s a little bit of all of that happening in the American EV market this year, especially in the face of the expiring Federal EV tax credit that kind of makes most EVs cost $7,500 more than they would have otherwise.
That said, as I was putting this list together, I realized there were plenty of ways for me to present these MY26 price cuts. “Best deals?” Too opinion-based. “Biggest discounts by percentage?” Too much math. In the end, I went with alphabetical order, by make. Enjoy!
Cadillac OPTIQ
Cadillac is the industry’s luxury EV leader these days – and for good reason. Its electric crossovers are good-looking, have long range, great acceleration, and ultra-fast charging. Heck, they can even power your home in a pinch.
Even so, the powers that be at GM are worried about how their EV sales will fare in an American without a $7,500 Federal EV tax credit, so they’re offering a rear-wheel-drive version of the OPTIQ crossover with 300 miles of range for the 2026 model year with a starting price that’s nearly $2,000 lower than the least-expensive 2025.
Chevy Silverado EV
Chevy is crushing it right now. After setting EV range records and surpassing Ford in EV sales this semmer, Chevy is now the fastest-growing domestic EV brand in the US – and they’re seemingly intent on keeping that momentum into 2026 with a more affordable WT trim level that starts at $54,895, compared to $57,095 for the ’25 WT Standard Range.
The financial picture is looking rosier at the top of the Silverado EV model range, too. The range-topping model for 2026 is the $88,695 Trail Boss, while the $97,895 RST Max Range topped the 2025 lineup.
Mercedes-Benz EQS
Despite being objectively capable, technologically-advanced, and supremely luxurious long-range electric vehicles, the Mercedes EQS and EQS SUVs were saddled with a somewhat anonymous, jellybean-like styling language that’s seen the flagship EVs struggle to find a foothold in the ultra-luxury segment they inhabit.
To that end, Mercedes kicked off its 2025 with big discounts on its in-stock EQS and EQS SUVs, and is responding to lower-than-expected market demand by reducing the cars’ MSRPs. In the case of the EQS SUV, by an inflation-busting $15,000 (!).
Toyota bZ
For 2026, Toyota has axed the bZ4X name and added a raft of both functional and cosmetic improvements to its five-passenger electric crossover, including body color fenders, up to 25% more range, and – thanks to a new thermal management system and battery preconditioning – a bigger battery that can charge from 10-80% capacity in about thirty minutes.
Even with those upgrades, the new and improved 2026 Toyota bZ is cheaper than the outgoing bZ4X, starting at $34,900 – or $2,170 less than the outgoing model.
Disclaimer: the prices above were sourced from CarsDirect, Motor1, and a number OEM websites. All offers were current as of 07SEP2025, and all links provided are from trusted affiliates. These prices may not be available in every market, with every discount, or for every buyer (the standard “with approved credit” fine print should be considered implied). Check with your local dealer(s) for more information.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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Sennebogen’s new 824 G Electro Battery material handler is being put through its paces at a recycling site in Munich’s Aubing district. And, thanks to its innovative grid-connected/battery system, it never has to stop to recharge!
With its emphasis on the recycling of stainless steel, ferroalloys, and superalloys, CRONIMET Alpha’s recycling operations are loud, and adding the ceaseless drone of diesel engines straining against the mass of all that metal as it’s sorted and fed into bailing presses. That’s why the company was so excited to test out Sennebogen’s new, all-electric 824 G Electro Battery material handler during an extensive trial at its Munich site.
So far, CRONIMET’s operators have been impressed with the new Sennebogen. “The battery-powered machine drives just like a diesel-powered one,” explains equipment operator Zoran Alexsic. “You don’t notice any difference in power – only that everything runs much more smoothly and quietly … you don’t have to take breaks to escape the noise.”
Quiet, but powerful
The Sennebogen 824 G comes standard with a 98 kWh battery, but operators can install up to four modular packs for a total of 392 kWh and roughly eight hours of runtime. Even with a single pack—good for 1.5 to 3 hours—the machine can keep CRONIMET’s operations running almost nonstop, thanks to its built-in dual power mode.
Sennebogen’s dual power mode enables the 824 G to run on battery while drawing power from the grid at the same time. When connected to grid power, the machine can recharge its batteries as it works, eliminating the downtime other BEVs need for charging and giving operators the freedom to reposition the machine on battery power, then plug back in when convenient.
Beyond flexibility, the electric handler is also cleaner, quieter, and more cost-effective than the diesel models it’s designed to replace. By seamlessly cycling between battery and grid power, it reduces both noise on the job site and energy costs during peak hours.
Electrek’s Take
We’ve seen grid-connected equipment assets like this before, and with good reason. Simply put, it takes many more kilowatts of energy to dig up tons and tons of dirt and rocks than it does to send an aerodynamically smoothed sedan down a road. That’s why you still see a push towards hydrogen and other energy-dense fuels in construction – but permanently grid connected assets, whether wired or inductive, could solve for some of the limitations of batteries on job sites that can support them.
If the 824 G Electro Battery is a commercial success, expect Sennebogen to roll out more grid-connected options in the years to come.
SOURCE | IMAGES: Sennebogen.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
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