Login to Continue Learning
The U.S. solar industry suffered a significant setback when Republicans in the House of Representatives passed a budget reconciliation bill that would largely eliminate tax credits for clean energy. These Biden-era incentives, which drive investments in renewable energy and battery manufacturing, have attracted hundreds of billions of dollars. Without these tax policies, analysts predict over $500 billion worth of announced but pending investments in clean tech could be jeopardized.
Shares for rooftop solar companies plummeted following the bill’s passage. California-based Sunrun, a leader in combining rooftop solar with home battery energy storage, saw its stock drop nearly 40 percent. CEO Mary Powell stated that they immediately worked on ensuring their message about energy independence and advancing the clean energy agenda is heard. She warned that without changes, it would “rip the rug out” from under more than five million customers.
Sunrun’s stock has since recovered much of its value as attention shifts to the Senate where the renewable energy industry hopes cooler heads will prevail and restore some elements of support for the tax credits.
Industry executives argue that solar, wind, and battery storage are often the fastest and cheapest ways to increase power supply. Last year, these sources accounted for approximately 90 percent of new additions to the nation’s electric grid. However, the House bill proposes drastic cuts to renewable energy, particularly affecting rooftop and community solar. It repeals tax credits earlier than intended and eliminates transferability and use in lease arrangements.
Clean tech companies also rely on investments that flow to red states and Republican districts as the industry brings more manufacturing onshore to reduce dependence on imported products. About two dozen Republican members of Congress have signed letters supporting clean energy tax credits, including four influential senators.
Powell discussed how the industry hopes to persuade Senate members to make changes. Powell has been Sunrun’s CEO since 2021 and previously led Green Mountain Power Corporation in Vermont for over a decade.
Newsweek spoke with Powell about her chances of getting the bill changed:
**Mary Powell:** We had multiple conversations with Members to ensure they understood our role in energy independence from an American perspective. While this was middle-of-the-night legislation, I believe it will land in a reasonable place because that’s what makes sense for Americans and supports President Biden’s agenda.
Despite strong support in the House and Senate, Powell noted the bill’s rushed nature and potential disruption to state economies. She believes the Senate, historically sensitive to such disruptions, will focus on minimizing economic impact.
Powell addressed critics who argue businesses should compete without subsidies:
**Mary Powell:** We’re deploying newer technology. The tax structure is crucial for accelerating storage adoption, which has only been around for a couple of years. It’s not about supporting outdated technologies but fostering innovation.
On glide paths for phasing out credits, Powell suggested extending the timeline more than what the House bill proposed.
Powell emphasized the importance of a smart, thoughtful glide path to compete with China and other countries in this industry of the future:
**Mary Powell:** We must scale quickly to win the race against China. This industry has contributed significantly to America’s energy dominance globally and independence at home. With the right glide path, we can incentivize innovation and manufacturing to support our onshoring efforts.
📚 Reading Comprehension Quiz
What significant action did Republicans in the House take that affected the U.S. solar industry?
Please login or register to take the quiz and earn points!
