Trump and the Fate of the 30% Solar Tax Credit in 2025​

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• May 22 update: The House of Representatives passed the budget reconciliation bill, including the measure to terminate the 30% residential solar tax credit at the end of 2025. The “big, beautiful” budget bill will head to the Senate, where a final vote is expected before the August recess, and possibly before July 4. If passed as currently written, residential solar and battery systems placed in service by December 31, 2025 will still qualify for the Residential Clean Energy Credit.

• May 13 update: The House Ways and Means Committee is proposing an end to the residential solar tax credit as part of the reconciliation process. If passed, systems placed in service (i.e., installed and inspected) by December 31, 2025 will still qualify for a 30% tax credit.

Why Are People Concerned about the Solar Tax Credit Going Away in 2025?

With President Trump returning to the White House and the GOP controlling both the House and the Senate a lot of people are wondering what might happen to the 30% federal solar tax credit in 2025. As of May 2025, this tax credit is still law and taxpayers can claim this credit for their investments in solar and/or battery storage projects.

During the campaign, President Trump and Republican elected officials called for the “repeal of the Green New Deal” — a name Trump uses to refer to the Inflation Reduction Act (IRA). The IRA was the Biden administration’s cornerstone policy and was a broad bill that included several pieces of favorable policy for the solar industry and, most importantly, extended the solar tax credit through 2034.

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🌞 TAILWINDS: Factors Accelerating Hawaii's PV Solar Industry

1. 100% Renewable Energy Mandate by 2045

Trend: Hawaii remains the only U.S. state with a legally binding 100% renewable electricity goal.

• Data: As of 2024, renewables account for ~40% of Hawaii’s electricity generation. The Hawaii Clean Energy Initiative (HCEI) roadmap outlines key PV growth to reach 70% by 2030.

2. High Electricity Prices

• Trend: Hawaii has the highest retail electricity prices in the U.S.

• Data: As of Q1 2025, average residential rates are ~$0.43/kWh (vs. U.S. average ~$0.17/kWh).

• Impact: Strong economic incentive for homeowners and businesses to install PV systems.

3. Federal and State Incentives

• Trend: The Inflation Reduction Act (IRA) of 2022 continues to benefit Hawaii in 2025.

• Data:

  • 30% federal Investment Tax Credit (ITC) remains available through 2032.

  • Additional 10% "Energy Community" or "Low-Income" adders available in some locations.

  • Hawaii's Green Energy Market Securitization (GEMS) and Hawaii Energy's solar rebates are also in play.

4. Robust Solar+Storage Growth

• Trend: Battery storage is increasingly paired with solar PV to mitigate grid saturation and enable time-of-use shifting.

• Data: Over 80% of new residential solar installations in 2024 included batteries, up from 30% in 2020.

• Project Example: The Kapolei Energy Storage project (185 MWh) came online in late 2023, demonstrating utility-scale storage commitment.

5. Community Solar Expansion (CBRE Program)

• Trend: Hawaii’s Community-Based Renewable Energy (CBRE) program expanded to Phase 2 in 2023, attracting more developers.

• Data: Over 50 MW of CBRE capacity awarded to date, with 30+ projects in development or RFP stage in 2025.

6. Utility-Scale Solar Projects Progressing

• Trend: Despite some delays, large projects are progressing.

• Data:

  • AES, Innergex, and Clearway are among active IPPs.

  • Recent example: Mililani I Solar Project (39 MW + 156 MWh storage) completed in 2024.

• Pipeline: ~250 MW of large-scale solar projects are expected online by 2026.

🌧️ HEADWINDS: Challenges Facing Hawaii’s PV Solar Industry

1. Grid Saturation & Curtailment

• Trend: Rapid PV adoption has led to oversupply during midday, especially on islands like Maui and the Big Island.

• Data:

  • Curtailment of utility-scale solar reached 14% on Maui in 2024.

  • HECO now requires smart inverters and export-limited systems for new installs.

2. Interconnection Delays & Queue Backlog

• Trend: Utility interconnection approvals remain slow, causing project bottlenecks.

• Data:

  • As of mid-2024, over 1,200 residential and 70 commercial systems were in backlog across Oʻahu and Maui.

  • Interconnection timelines average 4–6 months, vs. 1–2 months in mainland U.S.

3. High Cost of Installation and Labor

• Trend: Hawaii’s isolated location inflates costs for equipment, labor, and logistics.

• Data:

  • Average residential PV+storage system in Hawaii costs $35,000–$45,000 after tax credits, significantly higher than mainland averages (~$25,000).

  • Labor shortage: Hawaii’s solar workforce is ~20% below projected demand in 2025.

4. Land Use and Permitting Challenges

• Trend: Land scarcity and permitting issues delay utility-scale deployment.

• Data:

  • Environmental and cultural reviews can take 12–24 months for large-scale projects.

  • Projects over 25 acres often face community opposition.

5. End of Net Metering (Legacy Programs)

• Trend: Net Energy Metering (NEM) ended in 2015, and even transitional programs (e.g., CGS+) are being phased out.

• Data:

  • Current programs (e.g., Smart Export, HECO Battery Bonus) offer lower export compensation (~10–15 cents/kWh).

  • Less attractive returns for systems without storage.

6. Dependency on Imports

• Trend: Nearly all PV panels, batteries, and inverters are imported, leaving Hawaii vulnerable to global supply chain shocks.

• Data:

  • In 2022–2023, shipping delays caused project backlogs of 3–5 months. While easing, 2025 still sees volatility in battery availability and shipping rates.

📊 Summary Snapshot

TrendImpactData Point (2025)

100% Renewable Mandate✅ Tailwind2045 target; 40% achieved

High Electricity Costs✅ Tailwind~$0.43/kWh

Solar + Storage Adoption✅ Tailwind80% of new installs

Curtailment Issues❌ Headwind14% curtailment on Maui

Interconnection Delays❌ Headwind4–6 month average wait

Incentives (IRA + State)✅ Tailwind30–40%+ ITC still available

Labor & Equipment Costs❌ Headwind20% workforce shortage

Community Solar Expansion✅ Tailwind50 MW+ awarded

Grid Limitations❌ HeadwindExport limits, inverter rules