The Trump Administration Looks To Claw Back $7 Billion In Energy Grants: Who's Impacted And How To Still Go Green

Forbes

2 days ago

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The Trump administration is attempting to claw back $7 billion in grants given to low- and moderate-income households for residential solar panels.
The abjuration, coupled with the scheduled end of the residential clean energy tax credit by year's end, signed into law through The One Big Beautiful Bill Act (OBBBA), will eliminate energy tax benefits for homeowners. However, homeowners still have limited time to max out their benefits as the ink dries on the legislation.
The Environmental Protection Agency could terminate the funds awarded to needy households for solar panels under the $7 billion grant program as early as this week, as reported by Reuters on Tuesday.
The grants, part of President Biden's 2022 Inflation Reduction Act, were awarded through the Solar for All program to 60 nonprofit groups, Native American tribes and state agencies to deliver solar to over 900,000 households.
As part of the Greenhouse Gas Reduction Fund, the awards were projected to save these households over $350 million annually on electricity bills.
Recipients were selected based on need, including the Mandan, Hidatsa and Arikara Nation tribes, who received $135.6 million. The undertakings aimed to deploy 15 solar systems at the homes of Native elders.
A 2023 U.S. Department of Energy report found that an estimated 16,805 tribal homes had no access to electricity. This includes an estimated 21% of homes on the Navajo Reservation—or 14,063 households— and 35% of homes on the Hopi Reservation—or 878 homes—that do not have power.
Energy tax credits that benefited American homeowners are also coming to an end. The OBBBA, signed into law on July 4, eliminates the residential clean energy tax credit established under the Inflation Reduction Act of 2022 at year's end, rushing its originally scheduled 2034 termination.
The tax credit allowed homeowners investing in residential renewable energy, including solar panels, wind, geothermal and biomass installations, to deduct 30% of the cost from their taxes, with no income limits. Under the OBBBA, homeowners have until December 31, 2025, to take advantage of the credit.
Homeowners can find a silver lining by acting now. The residential clean energy credit remains redeemable through the end of 2025, giving homeowners some time to install solar panels and still take advantage of the tax benefit.
The process of installing solar panels varies from state to state, but getting a permit for installation—the longest part of the process—can range from weeks to months, according to Forme Solar Electric. The full process, from receiving a quote to powering your home, can take anywhere from three weeks to several months. In California, the process takes an estimated 45 days from the time a contract is signed.
The benefits of going solar, however, are long-lasting. A Stanford study found that about 60% of families could cut electricity costs by an average of 15% by installing a solar-battery system, taking into account the annual cost of operation.
Stanford's findings also revealed that 63% of U.S households could weather local or regional blackouts with solar systems, which can meet about half of a household's electricity needs on top of reducing electricity bills.
With the residential clean energy tax credit, homeowners could save thousands now and even more down the road. For example, with the current 30% tax break, solar installers can receive a $12,000 credit on a $30,000 solar array with $10,000 of residential battery packs.
The Stanford study's lead author, Tao Sun, a postdoctoral scholar at the Stanford Sustainable Systems Lab, advised homeowners not to give up on renewable energy after the credit moratorium.
'Homeowners can still access tax credits indirectly after 2025 through leasing arrangements or power purchase agreements,' Sun said. 'These indirect benefits will continue until 2027 for solar and 2033 for batteries.'
Read more: How Much Do Solar Panels Cost In 2025?
Current homeowners and renewable energy adopters may consider using home equity loans or home equity lines of credit (HELOCs) to fund their energy projects.
A HELOC is a variable-rate second mortgage that lets you borrow against your home's value using a revolving line of credit. HELOCs use your property as collateral for your payments, which means your lender can seize your property if repayments aren't made. Like credit cards, HELOCs grant users a line of credit, and applicants don't have to take all the money out at once. They only pay interest on what they borrow, with variable interest rates that rise and fall with the market.
HELOC interest rates are typically lower than the rates you'd find on personal loans or credit cards, usually ranging from 8% to 10%. HELOC interest payments are also tax-deductible in instances of home improvement, which renewable energy panels may fall under.
Forbes Advisor's HELOC calculator can help you estimate your borrowing potential given your credit score, home value, mortgage balance, loan amount and location.
Remember that using a HELOC requires budgeting for monthly payments and may include several fees, like appraisal, application and closing fees. Be sure to shop around and compare the best HELOCS offering low APRs to find the best deal for your energy investment.