Congress might kill clean energy tax credits—these states should go solar now

The House of Representatives passed a sweeping tax, budget, and immigration bill last month that includes provisions to eliminate Biden-era clean energy tax credits by the end of this year—nearly a decade ahead of schedule. 

While the bill still needs approval from the Senate and the President, solar and clean energy programs are at serious risk of elimination. Killing the tax credits would have damaging and widespread implications, abruptly disrupting the economic health of clean energy industries and, ultimately, the U.S. economy overall. The stakes are high for homeowners who rely on the savings from tax credits to go solar. For solar installers whose businesses already often have thin margins, the stakes are even higher. 

The residential solar tax credit, or Investment Tax Credit (ITC), is a primary driver of solar affordability. If Republicans do away with the ITC and sunset it next year—almost a decade earlier than originally planned— homeowners can expect to pay significantly more for solar installations, and solar installers can expect their businesses to shrink significantly. However, the impact won’t be felt equally across the country—some states are better equipped to weather the loss of federal incentives than others.

While repealing clean energy tax credits would have nationwide consequences, some states are better positioned to keep solar energy affordable. State-level incentives can help offset the loss of federal financial support, and factors like electricity rates and consumption levels also play a key role in determining solar savings. 

The repeal could also strain grid resources, making electricity less reliable. A state’s vulnerability to extreme weather is another reason to consider installing solar with storage sooner rather than later.

If you live in an area described below, consider going solar now or very soon: 

States that lack financial incentives

Although robust state-level incentive programs of traditionally pro-solar states like New York and Massachusetts will help cushion the blow and keep the cost of solar more affordable for eligible homeowners, not every state has policies in place to aid in affordable clean energy adoption. 

“Many blue states have their own clean energy policies, which will keep some of the investment afloat in those states,” Mike Williams, domestic climate senior fellow at the Center for American Progress (CAP), told EnergySage. “In most red states, all they have are the federal tax credits.”

Without federal or state incentives, the price tag of a solar panel system will increase by thousands of dollars. If you lack access to the following programs, consider going solar by the end of the year. 

• Net metering: Favorable solar buyback programs offer a one-to-one exchange for energy sent to and received from the grid. However, more states and utilities are moving away from true net metering to less consumer-friendly programs; even states that currently offer net metering might not in the future, further enhancing the urgency to go solar while you can still take advantage of today’s incentives. 

• Solar renewable energy credits (SRECs): You can earn income for the electricity your solar panels generate. These programs make a solar investment much more valuable, but aren’t available everywhere. 

• State, local, and utility rebate programs: Directly lower the upfront cost of solar, but eligibility varies widely.

States with high electric bills 

Without clean energy tax credits, renewable energy projects that help keep up with rising demand would be significantly more costly to build. As a result, utility companies will pass on those added costs to consumers, and rates will increase to compensate for the additional cost. Without adequate solar policies, electricity will be more expensive 

If the federal solar tax credit is sunset at the end of the year, residents of states with high electricity prices or consumption levels will save the most by going solar.  

• Northeast and Pacific states like Connecticut, California, and Hawaii are subject to high electricity rates. 

• South Central states like Louisiana, Arkansas, and Alabama rely more on electricity than natural gas to meet energy demands, making utility electric bills more expensive in these areas. 

States vulnerable to extreme weather events

Installing home solar and storage systems can protect residents of states vulnerable to extreme weather events—think hurricanes in Florida or tornadoes in Iowa—from frequent or prolonged power outages. This is especially important as natural disasters continue to increase in severity and frequency across the country, leaving millions without power each year. 

"Communities across Georgia are still recovering from Hurricane Helene, the most destructive storm in Georgia Power’s 140-year history," Don Moreland, executive director of Georgia Solar Energy Association, said to EnergySage. "Many areas lost power for over a week, but those with residential solar and battery systems had access to safe backup power during this emergency."

According to the National Oceanic and Atmospheric Administration (NOAA), billion-dollar weather and climate disaster events occurred nine times more frequently in the U.S. in 2024 than in 1980. These regular weather threats and potential Federal Emergency Management Agency (FEMA) cuts make the electric grid less reliable. Solar and energy storage can power critical loads during these outages, enhancing a home’s resilience even in the most vulnerable states.  

• Southeastern states: Last year, Hurricane Helene left over 4.7 million without power in just one day after landfall.

• Western states: Wildfires in Los Angeles left 4 million without power in January 2025.

Georgia

Sunny Georgia is naturally solar-friendly, but unfortunately, there aren’t many state-level financial incentives available to help make the initial investment more affordable for homeowners. That’s why it’s critical to go solar now if you live in Georgia: If the federal solar tax credit disappears, you’ll have no state incentives to fall back on for additional savings. 

Georgia no longer mandates net metering, making the federal solar tax credit by far the best incentive available for residents of the Peach State. Without it, it’ll take the average Georgian an extra five years to break even on their solar investment.

"Simply put, cutting the [residential solar] tax credit at this time is bad for Georgia families," Moreland said. "Georgians are more vulnerable than ever to rapidly increasing power bills, as well as outages from severe weather."

Louisiana

Louisiana has some of the highest electricity consumption levels in the country, meaning its residents save more money on their energy bills by going solar. However, despite having optimal solar conditions, the state’s solar incentives are sorely lacking. Like Georgia, Louisiana rolled back its net metering policy. Without meaningful state support, the federal solar tax credit remains the most valuable incentive there, too.

Tennessee

Solar is growing in Tennessee, but that momentum will likely slow or stop without clean energy tax credits. Going solar in Tennessee without the federal solar tax credit won’t make financial sense for every homeowner—the payback period would increase by more than five years, leading to fewer years of free electricity generation. Tennessee also lacks a solid net metering program, among other crucial state-level solar policies, making federal incentives that much more valuable.

West Virginia

Going solar is expensive in West Virginia, but right now, clean energy tax credits make it worth it. Installing solar panels before 2026 can save residents more than $13,000—the most savings at stake of the top 5 states—and allow them to break even seven years earlier than they could without the ITC. 

It’s especially urgent for West Virginians to cash in on available solar incentives while they’re still available. That’s because West Virginia’s net metering program could also be eliminated soon, which would be a double blow if coupled with the loss of the federal tax credit. Although some residents are currently eligible for net metering, a bill to eliminate the program is currently in progress. The policy's fate is unclear, but installing solar now could grandfather you into the program even if it’s eliminated.

Arkansas

Like Louisiana, Arkansas consumes more electricity than many other states, leading to greater savings for those who install solar panel systems. Unfortunately, state policy doesn’t support residential solar as much as it could: Arkansas transitioned from net metering to net billing last year, significantly cutting the value of credits for customers. While it’s still better than not having net billing, it was a step backward for the state’s solar policy.

If the federal clean energy tax credits are repealed, homeowners across the country will face higher electricity bills and much steeper costs to go solar. For many homeowners, waiting even a few months could mean missing out on thousands of dollars in savings and locking in years of higher energy costs.

In this uncertain policy environment, it’s important to make informed decisions. EnergySage can help shield you from bad actors looking to take advantage of condensed timelines, compare quotes from trusted installers, understand your financing options, and find the right system for your home—before the incentives disappear.

The fight to save clean energy programs isn’t over yet. If you're concerned about the potential loss of clean energy tax credits, now is the time to speak up. Call or email your representatives, write a letter to the editor, or share how these changes could impact you and your community on social media.