🔒CT solar firms report surge in activity as end of federal tax credits looms

Not long after the One Big Beautiful Bill was submitted to Congress in May, the phones at Ellington-based alternative energy company Earthlight Technologies began to light up with homeowners eager to install solar panels before Republicans stripped away a 30% federal tax credit. In an average month, Earthlight typically signs up 60 to 80 homeowners for rooftop solar installations. In June, the alternative energy company sold 137 systems, CEO and co-founder Sam Schneider said. “We ramped-up installation crews over the last several months when we knew this was coming,” Schneider said. “We had a big influx of new customers for home residential for 2025.” The Inflation Reduction Act of 2022, championed by former President Joe Biden, extended tax breaks for homeowners and businesses installing solar and other renewable energy sources through 2032. In a stark reversal, the Big Beautiful Bill cuts off a 30% credit for households at the close of 2025. Businesses can still qualify for tax credits for systems installed by 2027 or under construction before July 4, 2026. The commercial solar tax credit is usually 30% but can rise to 70% for projects that meet certain criteria, such as using U.S.made materials or being located in lowincome areas. The Big Beautiful Bill also includes new restrictions on clean energy tax credits for “foreign entities of concern,” which could affect companies that use solar components made in China. And, just last week, the U.S. Environmental Protection Agency said it would cancel a $7 billion initiative that was set to fund residential solar installations for more than 900,000 low-income households nationwide. Connecticut had been awarded $62.45 million through the program, known as Solar for All, the CT Mirror recently reported.

Connecticut has just over 50 home solar installation companies employing about 2,000 people, according to Mike Trahan, executive director of the Connecticut Solar & Storage Association. The state’s high electric rates and past government support of solar made it fertile ground for the industry, he said. Now, Trahan said his members are discussing a state legislative proposal aimed at offsetting the federal pullback. It could include boosting subsidies for solar adoption, easing permitting hurdles and costs, and revisiting a 2017 law that virtually prohibited solar fields over 2 megawatts on forest and prime farmland. “I think the industry here is resilient enough to handle what has happened at the federal level,” Trahan said. “But there has to be some action on the part of the state to mitigate what the Congress and the President have done.”

Longer payback

Earthlight is one of the state’s largest solar employers, with 160 staff in Connecticut, Massachusetts and Oregon. Most employees work out of the company’s modern, net-zero headquarters in Ellington. Even with the pullback in federal support, Schneider anticipates a residential solar system will remain a compelling option in Connecticut and other states with high energy costs. It typically takes five years for savings to cover the cost of a home solar system, which averages $32,000, Schneider said. Without the 30% federal credit, payback would stretch to eight or nine years — about the same as in 2021, when power was cheaper and solar panels were costlier, he said. “That was the payback less than three or four years ago, and we were still helping a lot of homeowners,” Schneider said. “We assume electric rates will continue to climb, so we are not worried about the future of residential or commercial solar.” Currently, solar still makes up only a small proportion of Connecticut’s electricity generation — 4% as of 2023, according to a U.S. Energy Information Administration report published last December. Natural gas fueled 60% of Connecticut’s total electricity net generation in 2023, followed by nuclear power (33%). Still, solar has been a growth industry in Connecticut and elsewhere. PosiGen, a New Orleans-based solar company with about 100 staff in Connecticut, expects a short-term burst of business as a result of the One Big Beautiful Bill. The company provides solar to lowincome households through longterm equipment leases rather than sales. Leasing companies, like PosiGen, qualify for the commercial clean energy tax credit, which has a longer runway under the Big Beautiful Bill. Commercial solar projects that start construction by July 4, 2026, can still receive the full 30% tax credit. They could also qualify for a fouryear safe harbor, giving developers potentially until mid2030 to finish construction.

“One of the outcomes of this bill is you are going to see a shift toward the third party-owned model just because the tax credits are still going to be a factor,” said Kyle Wallace, PosiGen’s vice president of public policy and government affairs. Still, Wallace — who also chairs the residential solar and storage division of the national Solar Energy Industries Association — is no fan of the recently passed federal law. PosiGen has grown quickly, from operations in seven states when Wallace was hired in late 2022, to 15 states today. The withdrawal of the federal tax subsidies has the 700-employee company rethinking growth plans, he said. “I don’t think in Connecticut we expect an immediate hit,” Wallace said. “We were on a very steep growth curve over the past two years. Because of the uncertainty, we’ve had to put things on pause and just maintain.”

More curveballs

One big question on solar developers’ minds is how aggressively the Trump administration will pursue the rollback of tax credit incentives. Just days after signing the Big Beautiful Bill into law, President Trump issued an executive order taking further aim at the renewable energy industry. The July 7 order described wind and solar technology as “unreliable,” and called for the U.S. Treasury Secretary to “strictly” enforce the termination of clean energy production and investment tax credits as outlined in the Big Beautiful Bill Act. It also instructs the U.S. Treasury to issue “new and revised guidance” on what qualifies as a project that has started construction. Given past regulations, William Herchel, co-founder and CEO of West Hartford renewable energy company Verogy, initially expected the Big Beautiful Bill would require 5% of project dollars to be spent in order for it to qualify for tax credits by the July 4, 2026, deadline for commercial projects. Just to be safe, Herchel had planned to deploy 10% of project budgets before that deadline, but he worries the Treasury could release intentionally difficult language that scuttles his plans. “All of this was thrown up into the air, and of course the language in the executive order was pretty aggressive to say that it wanted to stop the development of solar and wind projects to the extent they could,” Herchel said.

A punitive interpretation from the Treasury could cut down commercial solar pipelines by 25% to 50%, Herchel estimated. “Because of the uncertainty, most are waiting to see the guidance come out of the Treasury before making meaningful actions, but as soon as those guidelines come out, I think there will be a rush to make sure they bring in those projects they can bring in, if they can be brought in,” Herchel said. The Treasury is supposed to issue the guidance within 45 days from when Trump signed the executive order. Verogy employs 52 people and has built about 100 commercial and industrial-scale solar facilities across multiple states since it launched at the start of 2018. The company uses domestically produced solar panels and steel, which has bumped its tax credit to 40%.

Verogy has hundreds of projects in planning or development and is ramping up hiring to finish as many as possible before the tax credit expires, Herchel said. Meantime, Verogy is exploring the possibility of expanding into other clean energy fields, including technology that isn’t being targeted by the Trump administration, like modular nuclear reactors or fuel cells. Verogy also anticipates ongoing demand for solar, especially in Connecticut. It’s possible the federal administration’s actions could push energy costs higher, making solar even more competitive, Herchel said.