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The “One, Big Beautiful Bill Act” rolls back clean energy tax credits that middle- and low-income families, as well as businesses, have used in WNC to boost energy efficiency and clean energy upgrades.
Among the terminated tax incentives is the residential clean energy credit, which helped homeowners offset the cost of solar panels, geothermal heat pumps, solar water heaters, and other renewable energy home modifications.
Among other repeals, the OBBBA is rolling back:
- Rooftop solar credits, ending December 31, 2025
- Home energy efficiency credits, ending December 31, 2025
- Commercial efficiency deductions, ending June 30, 2026
- New energy-efficient home credits, ending June 30, 2026
Across the Appalachian solar industry, some are worried about energy resilience in the face of disasters and ever-increasing utility bills - and that fewer tax benefits might put clean energy out of reach for all but the richest.
Solar meant disaster resilience during Helene
Immediately after Helene hammered Western North Carolina, most of the region was under a complete electrical blackout. Sundance Power Systems, a small solar company, responded by partnering with other organizations to bring light to impacted households in the form of microgrids.
“We loaded solar panels and batteries up in the back of our '97 Chevy, and we went around and started providing power to people that didn't have it,” Dave Hollister, CEO of Sundance Power Systems, said. “That continued for months, and it's still continuing.”
They’re planning to install solar panels at the Fairview Volunteer Fire Department this month.
Elsewhere in the mountains, areas where distributed and residential solar had pre-existed the storm seemed to fare well, leading many to wonder whether they had a potential to prepare the region for the next storm.
The residential clean energy credit offsets up to 30% of the upfront cost of installing energy upgrades like rooftop solar panels The residential energy efficiency credit did the same for home improvements like heat pumps and better-sealed windows, and home energy efficiency audits.
Both allowed homeowners to get more quickly to the point where they were saving money on utility bills rather than spending. In 2023, after the Biden administration passed increased tax credits into law in the Inflation Reduction Act, solar adoption jumped nationwide; North Carolina IRS data shows over 62,490 households used the energy efficiency credit, while 26,470 households used the clean energy credit. And they helped the industry, too.
“Tax credits were part of the business model here in North Carolina,” Hollister said. “And you know it's been an important part of giving folks the ability to choose renewable energy as their preferred energy source.” Without it, he fears renewable energy will be left to the rich, and business will go down in more rural communities like the many he works with.
The tax credit often disproportionately benefitted wealthy families, for whom the tax write-off made a bigger difference simply because their taxes were bigger to begin with. Nonetheless, additional provisions in the IRA, like the “direct pay” tax credit system, allowed nonprofits and governments to take on costs of clean energy installation at the community level, where they had previously been dominated by for-profit companies. Direct Pay has not been rolled back by the Trump administration as yet. Some entities, like Mountain BizWorks, a nonprofit lender in Western North Carolina, can still take advantage of that to fund new clean energy projects.
Mountain BizWorks, a local nonprofit lender that helps small businesses clear financial hurdles, said that businesses in Western North Carolina historically lack access to the kind of capital that can make renewable energy investments pay off quickly.
“It definitely adds a bit of urgency, and would encourage folks to, if they've been thinking about pursuing some of those projects, to act now,” said Eric Burton, who works for BizWorks as the nonprofit’s director of energy and climate lending. Commercial tax credits extend through 2027 rather than 2025, but it’s still a tight timeline.
Impacts will also vary state-to-state and region to region, depending on state law.
Trouble on the horizon for residents’ utility bills
Bonnie Angermeier, a senior legislative associate with the Southern Environmental Law Center, said this was an outcome she’d feared since the election. “We know that in the wake of Hurricane Helene having energy sources that, you know, were not impacted was such a critical component for survival for so many folks,” she said.
Larger, utility-scale clean energy projects will have until 2027 before their own tax credit winds down.
Angermeier is worried that the overall impact will actually be to increase energy burden on rural customers who are already paying more than the average American. ven It could even impact people who don’t have solar energy at home and are just connected to the grid, thanks to lower average incomes, older housing stock, and what some advocates say is lack of investment in energy efficiency.
“Of the companies that we've talked to throughout Appalachia, many of them, their average customer makes between $50-$60,000,” she said. “So these are not really wealthy families. These are low-to-middle income hard-working families that are able to take advantage of residential solar to bring down their bill.”
The White House has said the repeals are a part of responding to the country’s increasing energy needs.
“The One, Big, Beautiful Bill will turbocharge energy production by streamlining operations for maximum efficiency and expanding domestic production capacity, which will deliver further relief to American families and businesses,” said White House assistant press secretary Taylor Rogers in an email.
How to take advantage of energy efficiency incentives while you still can
The clean energy tax credit covers up to 30% of costs for installing new clean energy infrastructure in your home, and the energy efficiency credit coversup to 30% of costs for home improvements like energy-efficient HVAC systems, heat pumps and home energy audits.
But time is running out.
Experts say you can still take advantage of the clean energy tax credit, as well as the energy efficiency home improvement credit. That means expenses you rack up on clean energy and energy efficiency are still eligible until the end of the year.
