The Trump Administration’s attack on renewables has rocked the solar industry this year. The full impact of anti-solar legislation and executive orders may not be understood until 2026, when the residential tax credit ends, material restrictions begin and start-construction deadlines arrive for the large-scale ITC.
Instead of abandoning all hope, solar advocates are shifting focus to state action.
“Federal government, Congress, they’re walking away from these opportunities. But that doesn’t mean there isn’t an opportunity here,” said Sachu Constantine, executive director of Vote Solar. “We’ve long made the case that the actual decisions about deployment, about what resources go into our grid, are made at the state-level.”
It’s not the first time strategies have shifted. During Donald Trump’s first presidency, a “blue wave” in 2018 awarded many governor seats to Democrats. Solar advocates zeroed in on state policies then, mostly pushing for renewable portfolio standards (RPS) requiring utilities to add solar to their portfolios. Now, enormous data center energy demand combined with overall home electrification are creating new, urgent priorities.
“It’s a more mature industry than it was back then. RPS is not really the driving factor these days,” said Sean Gallagher, senior VP of policy for SEIA. “It’s economics and the need for speed, and the attractiveness of solar and storage in terms of both affordability and reliability.”
State budget sensitivity
HR1 didn’t just decimate solar incentives. It stripped money from the states for crucial programs like Medicaid, student loan funding, SNAP benefits and school meals. States will be pressed to find money for many social programs impacted by HR1, so funding for renewable energy may be hard to come by.
Luckily, many efforts that could help reduce the overall cost of solar may not cost states much at all.
“A lot of this is not brand new, but it’s sort of a renewed emphasis on these nuts and bolts, things that states really can do to both facilitate and expedite bringing more resources online,” Gallagher said.
SEIA outlines some main objectives for all solar markets in its “Post-HR1 State Policy Roadmap.” For the larger market, these include enforcing interconnection timelines by penalizing utilities not in compliance, developing “flexible interconnection” policies to bring more solar online without requiring major grid updates and streamlining requirements for solar + storage projects on state lands.
On the small-scale front, SEIA is especially focused on helping residential installers navigate a post-25D market. The group will encourage AHJs to adopt automatic instant permitting via SolarAPP+, ensure policy is in place for companies to adopt third-party-ownership structures to capture the 48E ITC and work to expand statewide virtual power plant options.
“How can we really reduce cost, particularly in the residential sector, so that we can transition solar from a product that’s sold to a product that’s bought?” Gallagher said of SEIA’s focus.
Early state leadership
A few governors have already taken a stand to communicate that their states are still open for solar business.
“It’s what we’ve seen historically — when there’s been disruptions at the federal level, the leading states will step in and ensure that their trajectory toward their goals is at least maintained, if not further supported,” said Kevin Cray, VP of existing markets and regulatory affairs at the Coalition for Community Solar Access (CCSA).
Colorado Gov. Jared Polis issued executive actions over the summer to help residents determine which renewable energy tax credits they qualify for, as well as ensure state agencies cut red tape and prioritize renewable energy projects.
“We must provide confidence to the clean energy industry that Colorado is open for business as tariffs, shifting federal rules, supply chain crunches and market uncertainty risk delaying investment in these affordable domestic energy resources,” wrote Polis in his executive letter.
CCSA worked directly with Polis’ office to offer recommendations for supporting solar in the face of federal uncertainty and was pleased to see its main points reflected in the letter.
“Some of the recommendations around flexible interconnection and stuff like that were very specific, and I think create some of that near-term certainty needed for investments to still move forward,” Cray said.
In Arizona, Gov. Katie Hobbs put forth an executive order in September called “Removing Barriers to Delivering Affordable Energy for Arizona,” with goals of streamlining permitting and speeding energy deployment, including renewables. It establishes the Arizona Energy Promise Taskforce, which will develop plans to facilitate large-scale growth and expand Arizona’s clean energy economy.
SEIA and CCSA see these actions as great examples for other states to follow, especially Colorado’s specificity.
“That’s something that we’re certainly running state to state with at this point — trying to get other governors, administrative agencies, etc., to take similar steps as far as some of the exact provisions of the executive action,” Cray said.
Playing defense
While states that already lead on solar will continue to do so, influential oil and gas companies in others will be looking to take full advantage of the support of this “drill, baby drill” administration. Solar advocates will need to play defense to mitigate the damage.
“What’s unfortunate in some of those red states is that the big actors — let’s say the Duke [Energys] of the world, the Georgia Powers, the Southerns, FPLs — they know that solar is the best option. But they also know that in this environment, with the rhetoric coming out of the federal government, they can continue to try to cram some gas into the rate base,” Vote Solar’s Constantine said.
“Wherever we can, we want to get into the planning process early — the Integrated Resource Plans, where the regulators approve or shape the procurement plans for the utilities,” he continued.
Some of those negative actions are already popping up. Although Arizona’s governor supports solar power, the Arizona Corporation Commission unanimously voted to repeal the state’s RPS the month before she put forth her executive order. And the Public Utilities Commission of Nevada recently voted to approve a new rate design that changes the solar net-metering structure to 15-minute netting and adds mandatory demand charges to all customers. Instead of balancing solar production against usage over a full month, customers will now only get credit for excess energy within each 15-minute window. SEIA said the decision “discourages private investment in reliable, affordable, clean energy at a time when the grid needs every electron it can get to power Nevada’s economy.”
Still, the country needs massive amounts of new energy on the grid, and it needs it quickly. The U.S. Energy Information Administration is forecasting continued average electrical consumption growth of 1.7% through 2026, after growth was nearly flat from 2005 to 2020. Solar has consistently been the fastest-growing source of electricity to meet that demand. Advocates plan to cut through the administration’s rhetoric and stick to those facts to win as many policy battles as possible in this trying time.
“We have to bring a real clear focus now on the economic proposition that solar provides and the speed to power that we can do. We have our work cut out for us. But, as you saw at RE+, I think the industry feels like we’re going to figure out a way to manage through this,” Gallagher said.
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