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CBS News
2 days ago
- Business
- CBS News
Bay Area solar owners could see tax credits slashed under Trump's spending bill
The budget bill being debated in Congress could have serious implications for a lot of industries, but some are saying it could be a disaster for the residential solar industry. Solar companies are already hurting from reductions in government subsidies, but a threat to eliminate the federal solar tax credit could be putting the industry on the verge of collapse. Solar power itself is a proven technology with a lot of benefits to offer as a clean, renewable source of energy. But right now, a lot of energy is going into just keeping the business alive. "I think the industry is going to go through some very hard times," said Severin Borenstein, faculty director at UC Berkeley's Haas Energy Institute. He said rooftop solar has gone through a lot of changes in the last few years, with the State reducing how much solar system owners are credited for the energy they produce. But lately things have been improving. "2024 was back to 2021 levels, so they had really recovered from a drop," said Borenstein. "But now, with what the Trump administration is doing, I think there's a lot of concern. There were already a lot of rooftop solar companies that had pretty tenuous financing and were having a hard time. And I think this is pushing some of them over the edge." He was talking about a Republican effort in the budget bill to eliminate the 30 percent federal tax credit given to people who install solar systems on their homes. That, along with the tariffs being imposed by President Trump, has solar industry insiders calling foul. "It's really sad to see solar energy being caught in partisan crosshairs," said Brad Heavner, executive director of the California Solar and Storage Association. "The sun is not Republican or Democrat. The need for more electricity is not Democrat or Republican. We need more energy in America and Congress has a role to play in making that happen." But right now, the role Congress is playing is to restrict rooftop solar, along with other renewable energies, in favor of older sources like fossil fuels and coal. The effect has already been devastating, with solar companies going bankrupt across the country. On Monday, solar giant Sunnova Energy filed for protection and last week, Solar Mosaic, a major lender in the business, also went belly up. But Gordon Johnson, founder of a research firm studying the industry, said the companies may have brought it on themselves simply by the way they did business. He said some misrepresented their costs to lenders in what he compared to a Ponzi Scheme. "The solar industry in the US is in a state of significant disarray. And it's not something that could not have been predicted," said Johnson. "They perpetually issue debt. These companies are always issuing debt. As soon as they can't issue debt, and they can't plug that hole of the actual cost of the system versus what they show Wall Street, they quickly go bankrupt." Higher interest rates and equipment cost inflation have also figured into the mix. One analysis found that, nationwide, more than $14 billion in clean energy and electric vehicles have been cancelled or delayed as a result. The prospects for the industry aren't good right now, but Joe Osha, an analyst for investment banker Guggenheim Securities, said rooftop solar should not be confused with the overall solar energy market. "In megawatt terms, I can tell you that the residential solar business, as visible as it is, is only a tiny fraction of the solar generation that gets added into this country each year," said Osha. "The vast majority of it are these large utility-scale solar farms. I don't see any scenario under which that utility-scale solar business collapses." That leaves residential solar twisting in the political wind. And experts are saying small companies that have been the backbone of California's solar revolution will have a hard time staying in business.
Yahoo
02-05-2025
- Business
- Yahoo
Illinois woman slashes heat bill, got back $1.2K with popular tax credit — but there's ‘a risk' it'll go away
As homeowners, we've all likely been hit with a crazy high utility bill during peak winter and summer. In fact, U.S. households recently faced average natural gas bills of $602 per month during the past winter. You can cut those costs by retrofitting your home with efficient upgrades, like adding insulation, sealing gaps and heat pump water boilers. Fortunately, a federal tax credit might help offset those expenses. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) That's exactly what worked for Megan Moritz, a Chicago homeowner who recently received a tax break after upgrading her home for better energy efficiency. After purchasing her 1930s dream home, she soon learned it came with all the 1930s-era insulation problems. Moritz spent around $5,700 on retrofits and saw a big payoff: a much warmer house and a heating bill slashed in half. 'The biggest perk to me, honestly, was not freezing my butt off,' Moritz told CNBC. 'Then it was the monthly bill going down as much as it did.' Even better, she was able to claim those expenses on her taxes, which gave her a $1,200 credit. That financial relief made the investment even more worthwhile. This tax break — called the Energy Efficient Home Improvement Credit — is used by millions of homeowners to insulate drafty homes or upgrade to energy-efficient appliances. It's a part of a broader push to cut greenhouse gas emissions and prevent another 1970s-style energy crisis. While upfront costs can be a barrier, the credit helps by covering up to 30% of the cost of eligible projects. The extremely popular tax credit, which American homeowners claimed $8.4 billion of in 2023, has been extended through 2032 by the Biden administration's Inflation Reduction Act. But for those planning future upgrades, its lifespan may be threatened by the Trump administration, which has pledged to cut IRA spending. As Republicans search for ways to fund a $4 trillion tax cut package, the home improvement credit could be at risk. Freezing IRA funds was one of Trump's first executive orders for this presidency. 'There is a risk in the current budget bill that these credits would be changed or go away completely,' said Haas Energy Institute economist Lucas Davis, who has written on the history and use of the energy credit. A group of congressional Republicans is siding with Democrats to keep the credit alive. With slim margins of Democrats to Republicans in both the House and Senate, it may still have a fighting chance. If the federal tax credit does get slashed, check whether your state or local government offers energy rebates. The Department of Energy provides a rebate search tool, and the NC Clean Energy Technology Center maintains an online database of state energy incentives. Read more: This hedge fund legend warns US stock market will crash a stunning 80% — claims 'Armageddon' is coming. Don't believe him? He earned 4,144% during COVID. Here's 3 ways to protect yourself Whether or not you're able to get the energy tax credit, making energy-efficient upgrades to your home is good for the environment and your wallet. If you're like Moritz and live in a house that's nearly 100 years old, there are several ways to improve energy efficiency without compromising its historic charm. Insulation: Attic insulation is often a high-priority, yet cost-efficient upgrade for older homes. It can lower heating and cooling costs by 15%, and it's generally easier and more affordable to install than wall or floor insulation. Upgrade your furnace or boiler: In older homes, the heating system may also be outdated. Replacing it with a 95% efficiency model could save you up to $525 per year. You might also save $300-800 annually on parts, repair and boiler maintenance by upgrading to a newer system. Start small: If big-ticket improvements aren't in your budget right now, start with low-cost changes — like switching to LED lighting, gradually upgrading to ENERGY STAR appliances and using power strips to reduce phantom energy use when electronics are idle. Energy audits: Many utility companies and local governments offer free or discounted energy audits. These professional evaluations help identify areas of energy waste and provide a plan for increasing efficiency. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
