With the so-called “Big Beautiful Bill” Act phasing out the investment tax credit (ITC) for solar and wind, what’s next for renewables?
In this podcast, four industry members weigh in on where renewables and energy storage are headed as a result of the phase out. Listen using the player above or on Apple Podcasts.
“That phase down is going to have a big impact on solar and storage,” said Mike Hall, CEO at Anza, which provides solar and energy storage data analytics. “We expect to see robust deployments between now and probably 2028. And then we could see a dip as the industry has to reconfigure and reprice deals in order to work in a post tax-credit world.”
In the longer term, solar and storage will be needed to address growing electricity demand driven by data center growth and electrification.
Project economics will have to adjust, he said. As the ITC is phased out, higher power purchase agreement prices will be needed, and this will increase costs for consumers.
In addition, costs will have to drop.
“I expect that hardware costs will have to come down and also EPC (engineering, procurement and construction) and installation costs will have to come down,” he said.
However, without the ITC, some soft costs will drop and transactions will be more efficient. Developers and independent power producers now incur costs when using the ITC. They must buy tax credit insurance, negotiate complex inter-creditor agreements and pay for tax opinions and expensive accountants.
As a result of the new law, foreign entity of concern (FEOC) restrictions will pose a challenge to the energy storage industry, which, unlike wind and solar, will retain the ITC. These restrictions make it difficult to obtain the ITC if developers use components from China.
“The storage being sold in the U.S. does have Chinese content, and most of the storage companies actually are Chinese owned. There’s some leaders in the market who aren’t Chinese owned, but they’re using Chinese components,” Hall said. “So, the storage industry has a lot of supply chain work to do in order to navigate these FEOC requirements and still continue to qualify for the tax credit.”
Also chiming in on the effects of the “Big Beautiful Bill” Act are Adib Nasle, CEO and co-founder, Xendee, Thomas Lang, CTO and director of business development, AccuSolar and Laurel Hamilton, head of growth at Mayfield Renewables.
You can listen to the episode on Apple Podcasts.