Michigan residents race for rooftop solar after Trump administration axes tax credit

ANN ARBOR, MI – Rooftop solar panel contractors in Michigan are racing to complete installations in time for their clients to claim federal tax credits before the deductions disappear.

Among the federal climate action measures recently slashed by Congress and the Trump administration were tax credits for home projects – like solar, batteries, and energy-efficiency upgrades – which both save homeowners money over time and reduce planet-warming greenhouse gas emissions.

The federal spending bill signed by President Donald Trump ends those substantial 30% federal tax credits at the end of this year. The solar tax credits had previously been extended through 2034 under the Biden-era Inflation Reduction Act.

Michigan contractors say they’ve been working non-stop for weeks to meet the deadline.

“We are experiencing a last-minute rush in customers that are trying to get a system installed before the end of the tax credit,” said Mark Hagerty, president of Michigan Solar Solutions, a Commerce Township-based solar installation company.

And that’s not the only Michigan company scrambling to meet the new deadline for projects to qualify for the federal tax credits, which was moved up by nearly a decade.

John Richter, a renewable energy consultant and board member of Great Lakes Renewable Energy Association, said more than 40% of the group’s 85 member businesses install solar systems. He said they are staying busy, for now.

“They are currently seeing a surge of interest as homeowners and businesses try to get a solar energy system installed before the imprudently accelerated termination of the tax credits,” Richter said. “Next year, they will face a grim business environment. Major job losses are certain.”

These systems have become less expensive over the years but still require hefty up-front payments that some homeowners would struggle to cover without the tax credits. An average rooftop solar installation can run $20,000 or more.

Enphase, which makes inverters for solar systems, projects only a 20% reduction in future installations nationwide, but other sources predict a greater impact, Richter said.

Justin Carpenter, policy director for clean energy trade group Michigan Energy Innovation Business Council, said energy efficiencies and renewable energy installations save substantial money over time and make good economic sense. However, broader economic uncertainty may become a growing factor, he said.

“I think a lot of people are starting to act in a more withdrawn way about spending,” Carpenter said.

“Things seem to be changing so fast. I think the general uncertainty has led to people being extremely cautious with their money,” he said.

The U.S. Treasury Department said more than 1.2 million families claimed more than $6 billion in those credits for solar installations, solar water heating, geothermal heat pumps, battery storage and other improvements on returns for tax year 2023.

More than 2 million families claimed more than $2 billion of the credits for upgrades such as windows, insulation, heating and cooling systems that same year, the Associated Press reported.

In addition to the energy-efficiency and renewable energy tax credits coming to an end this year, the administration’s massive tax and spending law also targets incentives for electric vehicles. The deadline to qualify for a $7,500 federal tax credit for buying an EV is Sept. 30, just over five weeks away.

The Associated Press and MLive Environment Reporter Lucas Smolcic Larson contributed to this article.