The US residential solar market is facing a significant downturn, with industry leaders predicting further challenges ahead. A key blow comes from the latest draft of the One Big Beautiful Bill Act, which excludes residential solar lease providers from receiving the Investment Tax Credit (ITC). This change follows a 31% decline in residential solar installations in 2024 and comes as a surprise to the industry that once enjoyed steady growth.
Macroeconomic pressures, including high tariffs on aluminum and solar module imports, as well as a dramatic cut in bill credit rates, have intensified difficulties for solar companies. Industry giants like SunPower, Sunnova, and Mosaic Solar have filed for bankruptcy in recent months. The new legislation takes aim at the residential solar sector by reducing the tax credits for solar installations much earlier than expected, impacting homeowners who typically finance through loans or upfront payments.
If passed, the One Big Beautiful Bill Act could severely affect the industry, leaving many solar lease models ineligible for tax credits and further discouraging new investments. While the government has extended some incentives, the bill threatens to halt this progress by the end of 2026, making it harder for the residential solar industry to thrive.
In response, experts suggest that the sector may need to find new ways to lower “soft costs”—the costs associated with permits, sales teams, and grid connections—in order to survive in this new, tougher regulatory environment.