The Solar Industry under the Trump Administration
We are now nearly two full months into 2017 and we’ve been busy chatting with many people who are researching information on solar for their homes. Most have heard some rumblings of changes in solar rebates, credits and the like. The process of going solar may seem intimidating at first, so we tend to field a wide range of questions, from pricing to permitting. Add to that the recent political shifts that could influence the future of green and renewable energy, there is quite a lot to talk about this year!
To that end, we have received questions about how solar rebates and credits may change with the new White House – the answer is a complex one, and so we break down some of our thoughts below.
“What’s going to happen to solar under Trump?”
With the political tides changing, it’s a fair question. Before Donald Trump was inaugurated as the 45th President of the United States, a few of our customers were motivated to start their installations before any policies or programs could be affected by the new administration. The mood has ranged from a general concern that Trump and his cabinet are eliminating climate change regulations (and potentially affecting the growth of green energy) to a belief that the federal solar rebate program may eventually be defunded.
Predicting how the Trump Administration will approach solar and other sustainable forms of energy is a tough nut to crack since much of the strategic direction has yet to be defined. While we wish we had a crystal ball to foretell the future of solar under the Trump Administration and Congress, we have to wait and see exactly what will transpire. For this reason, many people are choosing to go solar to take advantage of the existing federal benefits, before anything is changed. With that said, there are reasons to remain optimistic about the solar energy sector. With that said, there are reasons to remain optimistic about the solar energy sector.
Commitment to domestic energy production and job creation.
Trump’s America First Energy Plan focuses on independence from foreign oil and stimulating growth in the U.S. energy industry by eliminating regulations and investing heavily in domestic energy production. The Trump Administration asserts that by doing so, new jobs will be created.
Trump’s energy policy includes removing restrictions imposed by Obama’s Climate Action Plan, which is a set of initiatives aimed to reduce carbon pollution and greenhouse gases through fuel efficiency standards and investing in clean energy to name a few. Removing such restrictions will free power plants from adhering to emission standards – one that the new administration believes will spur more job growth (presumably through increased production free from clean energy compliance requirements).
Dismantling the Climate Action Plan and opting out of similar policies like the Paris Agreement certainly casts doubt on Trump’s commitment to clean energy sources like solar and wind. However, the Energy Plan also states the White House’s commitment to clean air, clean water and preserving natural habitats. We believe that in order to achieve this, sustainable energy has to remain a key focus especially given that solar is one of the cheapest forms of energy (and arguably the cleanest). Secondly, the main thread throughout the Energy Plan is centered on domestic reliance and job creation – a cornerstone of Trump’s campaign. To create jobs via domestic energy, it will most likely include all forms, from fossil fuels to solar.
The solar industry employs more workers than fossil fuel.
According to EcoWatch, solar comprised of 43% of all U.S. energy production jobs in 2016 employing more people than other sectors (fossil fuels came in second comprising 22% of the energy workforce). The solar industry realized a 25% growth in jobs from 2015 and expects to increase by another 7% this year. In fact, solar is growing 12 times faster than the U.S. economy.
Solar construction and installation represent a large portion of the solar work distributed across the nation. Considering how many jobs the solar industry has created in the U.S., the Trump Administration would potentially slow job growth should the White House shift priority away from sustainable energy. Again, job growth is paramount to the Trump Administration and so any backwards movement here is contradictory to his mission.
Of course, that all remains to be seen. With Trump’s commitment to shale oil and coal production, it is possible that the White House could impose policies that promote these resources over the growth in renewable energy. However, it will be difficult to curtail market forces as demand for solar grows.
Federal solar investment incentives have been around for over 10 years and are still in tact today.
At the end of 2015, Congress voted to extend the commercial and residential Solar Investment Tax Credit (ITC). There is no cap and the rebate includes any roofing work underneath the solar panels. Homeowners that install solar from now until 2019 can claim a 30% tax credit. In 2020, the tax credit drops to 26% and to 22% in 2021. The ITC will expire by 2022.
The ITC was established by the Energy Policy Act of 2005, and in 2008 it was extended by Emergency Economic Stabilization Act for 8 years, and then a second extension was made possible by a spending bill, the Omnibus Appropriations Act signed in December of 2015. Given the number of extensions to incentivize solar deployment nationally, there appears to be substantial bipartisan support for the solar industry by both Republican and Democrat legislature – at least for now.
Nothing is certain yet, so we encourage you to do more research on these indicators yourself and let us know what you think in the comments.