Effect of HR1 on commercial, utility US solar projects
With the passage of HR1, or the One Big Beautiful Bill Act, the incentives for installing solar are slated to end much sooner than previously set by the IRA. While many details are still in flux, the impacts on larger PV systems are coming into focus.
In order to qualify for investment tax credits (currently set at 30 percent), non-residential solar projects must begin construction by July 4, 2026 or be producing power by the end of 2027. Projects that start construction within 12 months, must be completed within four years.
The 10 percent energy community as well as the 10% domestic content tax credit bonus adders are still in effect under the new legislation.
Additionally, non residential project owners can still transfer tax credits to other investors, and non-profit entities can still receive direct payments in lieu of tax credits.
HR1 imposes strict prohibitions on the use of components or materials from prohibited foreign entities — including China, Russia, North Korea and Iran — for projects seeking federal tax credits.
Solar projects that include panels, inverters or other components manufactured, assembled or containing critical minerals from these entities are ineligible for credits if construction begins after December 31st of this year.
The act requires taxpayers to obtain and retain supplier certifications and comply with new record keeping and reporting requirements. While the details of these new rules are still being drafted, it is assumed they will have a substantial impact on product sourcing, supply chains and credit eligibility for the U.S. solar industry.
States active in changing solar policies
The NC Clean Energy Technology Center released its Q2 2025 edition of "The 50 States of Solar." This quarterly report provides insights on state regulatory and legislative discussions and actions on solar policy.
This quarter, the report finds that 48 states, plus the District of Columbia and Puerto Rico, took some type of distributed solar policy action during the second quarter of this year. States focused on net metering, distributed solar valuation, interconnection rules, community solar, residential fixed charges, residential demand and solar charges, financial incentives and third-party ownership.
A significant trend over the past three months was to increase residential fixed costs for utility customers and also decrease compensation for energy net metered from solar owners to the utility.
State policymakers also enacted multiple bills supporting consumer protection for customers with third-party owned solar systems and adjusted and expanded property tax incentives for solar energy system owners.
Utilities likely to speed up renewable projects
Utilities will likely accelerate the development of their renewable energy projects in order to qualify for Inflation Reduction Act tax credits within the new one-year safe harbor period set by the Republican mega bill that became law earlier this month, according to a report from investment bank Jefferies.
Jefferies anticipates utilities with renewables-heavy plans will accelerate projects originally slated for 2030–31 into 2027–28 in order to qualify for new safe harbor rules defined under the legislation.
Safe harbor is the term used to describe how a project has been deemed to be under construction and therefore has met the various deadlines for incentives or tax credits. I
Solar still dominates new generation capacity
U.S. utilities and electric generation developers added about 12 GW of new generation resources between January and April of this year, this compares to 11 GW over the same period last year, according to the latest monthly infrastructure report from the Federal Energy Regulatory Commission.
- The vast majority of that generation — 9.5 GW — was solar, trailed by wind with 2 GW and 500 MW of gas.
- The report notes that projects already scheduled and that have a high probability of moving forward over the next twelve months, will add an additional 132.5 GW of new generation capacity. Of these, 70 percent are solar, 16 percent are wind, and 14 percent are natural gas.
Anti Dumping investigation launched on panels from India, Indonesia and Laos
Like a game of whack-a-mole, When the U.S. government imposed tariffs on panels made in China, that nation moved their production to other nearby nations.
In 2024 the US Department of Commerce (DOC) launched an investigation into whether solar cells and panels from Cambodia, Malaysia, Thailand and Vietnam were being dumped into the American market, and then imposed tariffs on panels from those nations.
Soon, imports from India, Indonesia and Laos started ratcheting up.
The commerce department is now looking at largely Chinese-owned solar manufacturers in Laos and Indonesia, as well as companies headquartered in India.
The DOC will investigate whether imports from these nations are unfairly priced or subsidized and will determine whether those imports have injured the domestic industry.
If both prove to be the case, tariffs likely will be imposed on solar panels from these nations as well.
