Homeowners rush to install solar
Homeowners are rushing to install solar before the December 31st expiration of the 30 percent tax credit.
The surge in consumer activity follows the passage of HR1 on July 4th of this year, and its elimination of the residential Investment Tax Credit (ITC) at the end of 2025. Homeowners have through December 31st, to have their systems installed to claim the 30 percent federal tax credit, which represents an average of $9,000 in savings on typical installations, according to EnergySage Intel data.
Overall, EnergySage saw a 59 percent month-over-month increase in registrations from potential customers from June to July and a 205 percent year-over-year increase in homeowners actively working with installers.
Solar installers are being dramatically impacted by the urgency to go solar. A recent survey conducted by EnergySage found that 35 percent of solar installers expect to stop taking new customers before October 1st, and around 9 percent indicated they have already reached capacity for 2025.
Treasury unveils new rules that tighten safe harbor timelines
On August 15th, the Dept. of the Treasury released new guidance related to safe harboring solar projects under the ITC in response to a July executive order from President Trump. Safe harboring allows companies to demonstrate a good-faith effort at starting a solar project to secure the applicable tax credits for that year.
In the past the Dept of Treasury accepted what was known as the 5 percent safe harbor rule - determining that a project was under construction if the developer had spent over 5 percent of the total anticipated costs of the project.
The new guidance requires projects larger than 1.5 MW to use the physical work test to prove the project is under construction — a method designed to prove that a significant amount of physical labor has begun on a site. One concern of this rule change is that it is subjective as to what constitutes a significant amount of physical work.
The Physical work test has also been narrowed and does not include "preliminary activities" like grading the land, conducting studies or clearing a site. Projects using the physical work test must also demonstrate that there has been a "continuous program of construction"
Once a project has been deemed as under construction, developers have four years to complete the project before it is placed in service.
DOE's requirement to keep fossil fuel plants open will cost consumers $3.1B annually
The U.S. Department of Energy's (DOE) efforts to prevent large fossil-fuel power plants from retiring could cost ratepayers about $3.1 billion a year starting in 2028, according to a report released Thursday by Earthjustice, the Environmental Defense Fund, the Natural Resources Defense Council and the Sierra Club.
"This report confirms that the Department of Energy's unlawful mandates amount to a self-inflicted rate hike in nearly every region of the country," Ted Kelly, director and lead counsel for U.S. Clean Energy at EDF, said in a press release. "These dirty and expensive fossil plants were slated to close for good reason: they cannot compete with cleaner sources of energy that are more affordable and better for our health."
The states with the highest potential annual costs by 2029 incurred by keeping power plants from retiring are California, Texas, Colorado, Michigan, Louisiana, and Illinois,
Arizona commissioners unanimously vote to repeal state renewable energy standard
The Arizona Corporation Commission (ACC) voted to initiate the formal steps required to repeal Arizona's Renewable Energy Standard and Tariff (REST). Solar advocates see this as another setback for the state's transition to clean energy.
The REST rules were passed by a majority Republican Commission in 2006 and require utilities to source at least 15 percent of their electricity from renewable energy resources by 2025.
The move is seen largely as symbolic - as Arizona has already met the target that they are now seeking to repeal. Arizona ranks 4th in the country for total solar capacity. Roughly 1 in 5 Arizonans uses rooftop solar to help lower their electricity bill and the state receives over 20 percent of its electricity from renewable sources.
According to EIA, in 2024, Arizona's total in-state electricity was generated mainly from 6 sources: natural gas (45 percent), nuclear power (27 percent), solar energy (13 percent), coal (8 percent), hydroelectric power (4 percent), and wind (2 percent).
70 percent of new solar installs now include batteries
According to a recent report from Sunrun, the largest U.S. home energy systems installer, 70 percent of their nearly 29,000 new customers last quarter added batteries with their rooftop solar systems. That marked a 50 percent jump in the battery attachment rate from a year earlier.
The battery attachment rate has steadily increased since 2023, jumping from 18 percent to 54 percent from Q2 2023 to Q2 2024 and rising to 62 percent by Q4 2024.
Batteries are increasingly popular with homeowners as the price of these systems decline. Utility policies and performance are also a factor, as the grid has become less reliable, utilities pay less for net metered power and have instituted time-of-day pricing.
Solar owners are also increasingly taking part in Virtual Power Plant (VPP) programs, where they are compensated for stored energy from their batteries that is then tapped by utilities during times of peak load demand. According to Sunrun, roughly 35 percent of their customers installing batteries are enrolled in VPP programs,
