The future of residential solar energy in the United States faces a severe threat as the Trump administration signals its intention to end key clean energy incentives. The latest draft of the “One Big Beautiful Bill Act” notably excludes residential solar lease providers from the Investment Tax Credit (ITC), a move that has already triggered a sharp decline in solar stocks and an increase in bankruptcies within the sector.
Until now, homeowners installing solar panels and batteries have benefited from a 30 percent federal tax credit. Under the new proposal, this credit would be eliminated entirely just 180 days after President Trump signs the bill into law. Although the legislation is expected to undergo further revisions in the Senate, industry experts agree that the direction signals a grim future for solar companies across the country. Market reactions have been swift and severe, reflecting growing concerns over the administration’s hostile stance toward residential solar.
The U.S. residential solar sector is “on the brink of collapse.” The bill’s current draft delivers a harsh blow to clean energy broadly but hits residential solar hardest. While reductions in federal support had been anticipated, the sudden and significant scale of the proposed cuts is far earlier than industry leaders expected. This setback compounds existing challenges, as the sector continues to struggle with the aftermath of tariffs that disrupted solar supply chains.
The residential solar market was described as a “solar coaster,” frequently buffeted by volatile policies that rapidly alternate between growth incentives and sharp cutbacks. The magazine warns that this latest legislative draft could cause a devastating “crash” for the industry.
The toll is already visible. This month alone, two major players—residential solar provider Sunnova and financing company Mosaic—filed for bankruptcy. Sunnova cited “uncertainty over the nation’s commitment” to solar energy as a key reason behind its decision. It highlights these filings as among the largest casualties in the solar sector since the Trump administration took office.
Stock markets have also taken a beating. Shares of solar inverter manufacturer Enphase Energy plummeted 27.2 percent, while solar panel maker First Solar fell 19.3 percent, marking some of the steepest declines on the S&P 500 index. Reports that solar stocks have suffered a “terrible run” recently, reflecting investor anticipation of these policy changes. Over the past year, major solar companies including Enphase, SolarEdge, and Sunrun have lost between 52 and 70 percent of their value.
Abigail Ross Hopper, CEO of the Solar Energy Industries Association, expressed alarm at a recent Washington rally. “We are in a fight for our lives,” she said. Hopper warned that the bill “does not achieve American energy dominance” and stressed that more than 1,500 small businesses and over 250,000 jobs in the residential solar sector could be at risk.
Despite the bleak outlook for residential solar, utility-scale solar projects may avoid the harshest impacts. The bill’s draft is “less punitive for utility-scale developers,” who would not face the same leasing restrictions. Additionally, increasing energy demand may provide some stability for large-scale solar generation. Christopher Dendrinos, an analyst at RBC Capital Markets, told, “Even absent tax credits, we believe solar remains highly cost competitive with other fossil fuel generation technologies.”
Other renewable energy sources, including hydropower, nuclear, and geothermal, are also protected under the current version of the bill, which extends their tax credits through 2036.
As the legislation advances, the future of residential solar hangs in the balance, with the industry bracing for significant upheaval that could reshape the U.S. clean energy landscape.
