Percolated by the political atmosphere, we field numerous questions/concerns each week regarding the future of solar. General fear: Is Trump going to kill solar? Partisan question: Was the 30% solar tax credit aborted in the Republican tax bill? Regulatory: Is PG&E changing their solar (net-metering) program? Federal, again: What about tax credits for electric vehicles? And, finally, international trade: I’ve heard about the pending solar tariff case … What's going on?
In short, the solar industry entered 2018 standing strong. Here’s a quick peek at the commonly posed questions:
1. Is Trump going to kill solar?
Frankly, who knows? Logically, it would defy common sense and basic economics: Solar is the fastest growing (read: job creating) industry in the U.S. and it’s increasingly bipartisan. Putting climate change hoaxes to the side, if it’s about jobs-jobs-jobs, President Trump would be asinine to impede property owners’ ability to go solar (and, thereby, solar companies to serve property owners). Our bet: We’re safe, sans potential short-term harm (see #5 below).
2. Was the 30% solar tax credit aborted in the Republican tax bill?
No. Not a whisper during the sausage/bill making process. The 30% federal tax credit — granted based on the total cost of a solar system — is valid through 2019. Thereafter, it steps down 4% per year (i.e., is reduced to 26% in 2020). No worries, no rush (to go solar).
3. Is PG&E changing their solar (net-metering) program?
No. In 2016 PG&E, as directed by the CA Public Utilities Commission, doubled the size of its net-metering program. Property owners that go solar before mid-to-late 2020 are grandfathered in for 20 years, whereby PG&E is required to credit you at the full retail rate (based upon the time of generation) for your solar electricity, less a nominal “non-bypassable charge”. Again, no worries here, but PG&E will continue to modify its rate schedules, impacting (positively and negatively) solar- and non-solar property owners. We’ll keep you abreast.
4. What about tax credits for electric vehicles?
Lots of fear here, and rightfully so: Several Congressional tax bill drafts aborted the $7,500 Federal tax credit for new electric vehicle owners. Fortunately, the tax credit was maintained — at the full $7,500 — in the final tax bill. Hence, if you purchase an electric vehicle in the near future, you will receive $10,500 in incentives: $7,500 Federal tax credit, $2,500 state rebate, and $500 PG&E rebate. There has never been a better, more pragmatic time to consider an eV; IMO, the electrification of transportation is an ever-growing bonfire.
5. I’ve heard about the pending solar tariff case …
Two U.S.-based, foreign-owned, bankrupt solar panel manufacturers — Suniva and Solar World — filed a price dumping claim with the U.S. International Trade Commission (ITC). The ITC ruled in September that the importation of cheap solar panels unfairly harms U.S. solar panel producers. (FYI, less than one-percent of solar panels are manufactured in the U.S.; unfortunately, we can’t manufacture a quality product at a competitive price.) The ITC recommended a ~$0.30 per watt duty on imported solar panels, which would increase the cost of a residential solar system by ~8%. Net-net, President Trump will make a final ruling — could be nothing, $0.30/watt, or worse — by the end of January. Again, who knows what President Trump will do … stay tuned. (Fortunately, in September we secured a large lot of solar panels at pre-tariff prices … Repower property owners are insulated through the end of March.)
On New Year’s Day, the sun rose, solar panels shined, and the clean energy industry breathed a collective and confident sigh of relief. Battles will continue but, to be trite, we believe the future is bright!