No ITC? No problem. Solar’s value proposition was never about the subsidy

The federal solar tax credit, known as the ITC, expired for many projects as of July 4. This mostly affects businesses and large commercial solar developers rather than individual homeowners, but it's worth knowing what's changing in the solar market. Without the federal credit, developers say projects can actually move faster, since they no longer need approval from tax equity partners or have to meet sourcing rules tied to the credit. Solar remains one of the cheaper ways to add new power to the grid, and in the first quarter of this year, solar and battery storage made up over 90% of all new power capacity added in the U.S.

For anyone paying a utility bill, the bigger relevant point is that utility rates keep climbing regardless of what happens with solar incentives, having risen 26-27% for commercial and industrial customers since 2019, with more increases expected. Solar systems, even without the federal credit, are still expected to save customers something in the range of 15-20% compared to buying all power from the utility.

State-level programs are increasingly filling the gap left by the federal credit. Massachusetts recently redesigned its solar incentive program, called SMART 3.0, to pay out over 20 years instead of 10. New Jersey has its own long-term incentive program, and other states offer credits homeowners and businesses can earn by generating solar power, plus net metering, which lets you sell extra electricity back to the grid. Roughly 30 states currently offer some kind of incentive for solar, so it's worth checking what your own state provides.