by Jan Ellen Spiegel, CT Mirror
On the sunny first day of the mid-July heatwave, Will Herchel and his team walked along the edge of a nearly 18-acre field in Glastonbury three-quarters filled with solar panels. Even though the day was already pushing 90 degrees by late morning, the panels couldn’t take advantage of all that sunshine – yet.
That should happen in late September or early October when all 6,840 panels are in place and able to generate nearly four megawatts of power, estimated to be enough to run more than 775 average homes. The installation, being built by Verogy — the West Hartford-based company Herchel co-founded and now heads, will provide power to low- and moderate-income homes, as well as to small businesses and municipal buildings, through a concept known as a community solar or shared solar. Connecticut calls it shared clean energy facilities.
Regardless of the name, the concept is designed to bring clean energy — almost always solar power — to anyone who cannot install a system on their own property. That generally mean renters, condo or apartment owners, and people whose homes simply aren’t suited to solar due to lack of sun or badly configured roof angles.
Community solar has had a balky rollout in Connecticut. It’s taken years for the state to find the right model with parameters and financial requirements that will have staying power.
But, just as it gains momentum here, that effort may be about to hit a major roadblock — the Trump administration.
The tax-and-spending reconciliation bill President Donald J. Trump signed into law on July 4 has the potential to slam the brakes on two of the biggest and fastest-growing sources of renewable power in the U.S. — solar and wind.
The legislation eliminates a valuable 30% federal tax credit for owners of and investors in solar and wind systems. For Connecticut and the rest of New England, the brunt of the pressure will be felt on solar.
“It’s difficult to understand why these technologies were singled out in that way, other than it’s just a more political driven decision,” Herchel said.
Up-front costs
Wind is still the top renewable power source in the U.S. — but solar’s increase the last few years has pushed combined wind and solar beyond 17% of U.S. electricity production, eclipsing coal. A recent U.S. Energy Information Administration report shows solar poised to surpass wind as the top renewable power source during the summer by next year.
Long term, both forms of power will remain much cheaper than conventional sources. For starters, the fuel for the power — wind or solar — is free. But there are fears many people — especially homeowners who want solar — will find themselves priced out because the removal of the tax credit means higher up-front costs and break-even times several years longer than they are now.
The 30% tax credit for homeowners who purchase residential rooftop solar will disappear on December 31 of this year. There will be no gradual rollback, which is what Trump did his first term when he opted to scale back tax credits over several years. The rate was down to 26% when he left office.
The Biden administration restored the rate to 30% retroactively with a 10-year lifespan, transitioning to a gradual rollback in 2033.
People who lease solar for their homes, and all forms of commercial solar and wind projects have a longer runway before tax credits expire. They must start construction by next July or be in service by the end of 2027 in order to get the tax credit. For large commercial projects that’s a tight time frame and on leased systems it is the company that owns the system that gets the tax credit, not the homeowner. But homeowners will still face the owner’s higher costs being passed on to them.
Since the budget bill became law, additional policies have been unveiled that have solar developers like Herchel even more worried.
Three days after he signed the measure, Trump issued an executive order that appears likely to further tighten the parameters of access to solar and wind even while the tax credit is still operative.
The executive order seems designed to restore some provisions of earlier iterations of the bill. Those provisions were more restrictive and were jettisoned to ensure the bill would pass. One part of the order essentially asks the Treasury Department to re-evaluate what it means for a project to be in construction. The goal seems to be to redefine it in a way that would make it harder for projects to meet the timing to qualify for tax credits.
“I think the industry was in a position of relief that they understood what the path forward was,” Herchel said of the original legislation that removed the 30% tax credit.
His company only does medium size commercial and industrial sector solar and has the slightly longer runway before the tax credit disappears.
“The executive order threw a wrench in that whole process,” he went on. The order gave the U.S. Department of the Treasury 45 days to take action, so companies are stuck waiting. “You don’t know how to start construction, and because of that, everyone is concerned and confused as to which projects are going to qualify and which projects are not going to qualify.”
The uncertainty of how, when or even if to start construction is keeping Herchel and his investors up at night.
“The tough part for us is that, in our industry, the longest part of our installation cycle is permitting and interconnection. We don’t control those aspects,” Herchel said. The Glastonbury project, for example, will take three years from concept to operation, with actual construction only accounting for about seven months.
The uncertainty around the meaning “in construction” could mean that contracted projects already in the production process could be thrown into tax credit limbo. “Those projects essentially become non-viable until you understand whether they’re going to qualify,” Herchel said.
“We don’t know exactly what the rules are, and so when you don’t know what the rules are, you can’t appropriately navigate your business and you can’t appropriately invest capital in those businesses,” he said. “We’re all working very hard and diligently with third party counsel and other advisors, accounting firms, to try to understand what’s actually going to happen. But most of their experience is no longer relevant because no individual executive administrative body has behaved in the way that we’re currently experiencing.”
Proactively, Verogy last week asked Connecticut’s Public Utilities Regulatory Authority, PURA, to take emergency action help ensure as many solar projects as possible can beat the new tax credit clock.
Jeff Macel, co-founder and managing director of Lodestar Energy, which focuses exclusively on community solar in about eight states, including Connecticut, said he isn’t sleeping terribly well either. He points out the executive order literally contradicts what’s now in statute.
“The legal advice we get is that that can’t happen, but the practical advice is, ‘how are you going to work through that? Is that going to get litigated?’” he said. “So it’s going to be a dog fight, I think, legally.”
He called Trump’s new clean energy policies “100% politically motivated.”
“It’s a difficult time to do business because norms have been thrown out the window and it’s hard to understand what is the status quo,” he said. “I think we take a conservative position and trust lawyers who tell us this is what it says, stick to your guns. And I think you have to.”
Other solar companies and their advocates take great pains to paint the situation in the best light they can, wanting to project that their industry is still valuable and affordable, even at a higher cost. And they note the many policy changes the solar industry has navigated over the years.
“They don’t call it the solar coaster for nothing in this industry,” said Mike Trahan, executive director of the Connecticut Solar and Storage Association, which represents the 50 to 75 solar companies actively operating in the state at any given time and their 2,500 employees. He characterized solar developers and installers as a resilient bunch, used to dealing with disruption.
“It’s an uncomfortable place to be,” he admitted, also referencing the recent policy controversies in the Connecticut legislature. “We’re going to have to do what we did the last time the Trump administration was pursuing changes with the tax credits. You have to find a place where you can be successful. If they’re just going to continue to raise the bar for us, we just have to jump higher.”
“Actively hostile”
Some fear Trump administration actions herald existential threats to clean energy more broadly by encouraging a greater reliance on the fossil fuels whose emissions have caused the climate change the planet is already experiencing.
And, on the most basic level, there’s widespread sentiment that the Trump policies will cause energy prices to go up, emissions to go up and air to be dirtier. States, including Connecticut, will be hard-pressed to meet their renewable energy and greenhouse gas emissions targets as a result.
Trump has a long history as a notorious hater of wind power, with solar power not far behind. He reiterated that during his recent trip to Scotland.
During the 2024 presidential campaign, he infamously told a group of fossil fuel industry executives gathered at Mar-a-Lago that if they donated $1 billion to his campaign he would cut their taxes and regulatory hurdles in return. Though he did not get that much money from them, he has indeed introduced multiple policies and executive orders to increase fossil fuel extraction and use. even as most other nations look to switch away from such reliance to greater use of renewables.
Another part of the July 7 executive order would impose stricter rules on products from “foreign entities of concern.” While many components for solar have ties to China — something that has helped to dramatically reduce the cost of systems in recent years — solar panels made in the U.S. are more readily available than they had been, largely due to Biden administration policies that incentivized solar panel manufacturing here.
“At some point our industry does need to stand on its own two legs,” said Sam Schneider, co-founder and chief executive officer of Earthlight Solar and Energy Solutions, which is based in Ellington.
He traveled to Washington, D.C. twice to lobby for better terms in the original legislation. “I can’t say that I’m just jumping for joy, but I will say that it’s much better than where we were, and it gives us runway, and it gives us time.”
In some cases anyway.
Earthlight’s residential solar work is about half of their solar business. About 70% of that is purchased systems, which means the tax credit runs out in less than six months, though Schneider said he still has the capacity to complete projects by then. The rest of the residential solar, which is leased systems, as well as all his commercial work, do have the longer time frame.
“I believe that people are still going to pursue ownership of solar in residential; I one hundred percent believe that,” Schneider said. “It’s not ideal, but it is doable.”
But he faces other tax credit deadlines for related work his company does. The law also ends federal tax credits at the end of this year for a host of energy-saving functions, including the purchase of heat pumps, home and business energy efficiency upgrades, and energy audits. Tax credits for energy efficiency measures in new construction end in June 2026.
Those cutbacks essentially eliminate most other means home and business owners have to reduce their energy bills at a lower upfront cost. It may prove especially troublesome for the low- and moderate-income sector, which often turns to those solutions.
In Connecticut that sector also faces the solar tax credit deadlines in a program specifically designed for them. For 10 years, PosiGen has provided leased solar systems to qualifying low- and moderate-income Connecticut residents — more than 7,000 systems so far.
“This bill is going to have really dramatic consequences for the most vulnerable across Connecticut, generally,” said Kyle Wallace, PosiGen’s vice president of public policy and government affairs and leader of the company’s community impact team.
Leased systems do benefit from the longer deadline, but after that, the increased price likely will be passed along to consumers, Wallace said.
“I think even beyond this, we’re just continuing to see an administration that is just actively hostile to renewables, and we had hoped that they would be more indifferent and not actively hostile,” he said. “They’re going to try every way they can though to hurt renewables.”
Ten days after the July 7 executive order, the U.S. Department of the Interior announced solar and wind projects on federal property would now require personal approval from Secretary Doug Burgum across 69 categories of permitting.
The move is widely seen as a way to slow down approvals, possibly causing them to miss the new deadlines. Its most direct impact on Connecticut and New England would be on offshore wind projects, which are in federal lease areas. But it could have a bearing on federal approvals needed for projects that are not on federal property.
It all worries Harry Godfrey, a managing director at Advanced Energy United who heads up the advocacy group’s federal engagement efforts. He and others note that there is existing statutory language on what constitutes a project being in construction. The Treasury Department could come up with a conflicting standard.
But the notion of predicating a tax credit on an in-service date for a project is new. Projects face unforeseen delays for all kinds of legitimate reasons. The fear is that such a regulation will open the door to governmental mischief designed to deliberately slow down projects to make them less economically worthwhile and therefore more likely to be killed.
“You kill projects in the present through uncertainty in the future and a ‘placed-in-service’ deadline, like that is the thing that cuts the knees out from under projects,” Godfrey said. “That’s made all the worse if those parties are operating in bad faith — intentionally working to kill a project through delay. Between the executive order and recent actions by the Interior Department, that possibility is coming into more acute focus.”
Stability
Trump and Republican operatives, especially those who developed the energy and climate chapters of Project 2025, have long decried solar and wind power as expensive and destabilizing for the electric grid because they cannot operate fully all the time. Solar, for instance, cannot provide power at night. Storage will eventually change that dynamic.
But even without storage, solar has actually become a key stabilizing factor for the six-state New England grid. Matt Kakley, a spokesman for grid operator ISO New England, said there’s thousands of megawatts of solar in New England equal to about twice the region’s nuclear fleet.
To meet consumer demand, he said, solar is playing an increasingly important role.
“We really count on it every day,” Kakley said. “When we are putting together our daily forecast in our schedule we’re looking at what we expect that solar to do, and we’re counting on it showing up.”
In winter, when heat and electricity compete for the same natural gas supply, solar during the day helps stretch daytime heating supplies. On hot summer days, solar has prevented power crunches when air conditioning use is high.
The ISO recently reported that the kind of solar that might be on a residential roof —called behind-the-meter solar — reduced power consumption by 5% in 2024.
During a recent heat wave when power use peaked on June 24 to its highest level in a dozen years and some power plants were unavailable, solar was one factor that helped stabilize the situation. The ISO noted at the time that without behind-the-meter solar, demand would have peaked three hours earlier and more than 2,000 megawatts higher than it did. It also noted that at that time, non-carbon-emitting resources including all solar, wind, nuclear, hydro and battery storage together provided a up to 40% of the energy consumed in the region.
The ISO is predicting demand on the grid will start to rise — 35% over the next 20 years — after years of staying relatively flat and even declining. Whether solar deployment will grow with demand and continue to take the edge off it in the face of the changes that are coming remains to be seen.
There are a few large New England offshore wind projects under construction that will provide large swaths of power in another few years as long as the administration doesn’t stop them. And a large project for transmission of onshore wind from Maine to the rest of the region is in an early planning stage.
But now it’s possible the end of tax credits for heat pumps and electric vehicles may dampen demand. Data center growth, a big energy eater that has caused concern in other parts of the country, has not been a factor in this region.
There’s also a question of whether the solar industry here will contract.
Ken Gillingham, an energy and environmental economist at Yale specializing in renewable energy and efficiency, thinks the residential, small-scale solar industry in Connecticut, New York and Massachusetts will shrink.
“I don’t think it’s going to disappear, but it’s likely that some of the smaller, weaker players are not going to be able to make it, and that means job losses,” he said. “We have this combination of losing the tax credits and higher costs, and you put those together, and suddenly solar is less affordable. A worst case scenario — it’s going to become a very, very small market, almost back down to a niche market like it was 20 years ago.”
Despite Trump’s contention to the contrary which he reiterated again in the July 7 executive order, solar power — grid-scale solar in particular — is one of the least expensive energy sources. A United Nations report unveiled by Secretary General Antonio Guterres last week showed onshore wind, solar and hydropower to be the three least expensive sources of power. Solar is 41% cheaper than fossil fuels and onshore wind is 59% cheaper. Both, the report said, are also the fastest to build.
In 2024, the report said, renewables made up 92.5% of all new electricity capacity additions. And it predicted that solar and wind power generation would surpass nuclear power next year and, “In 2029, solar PV electricity generation is expected to surpass hydropower to become the largest single renewable power source, and wind will surpass hydropower in 2030.”
Stepping up
The mantra has been that the states need to step up to fill the void left by Trump administration policies — something they did in the energy and environment sectors during Trump’s first term pullbacks. With so many voids to fill this time around, it’s unclear how that might play out.
In the meantime, the emergency filing Verogy’s Herchel made with PURA asks that the annual cap on community solar and non-residential solar projects be lifted to allow more projects to capture the tax credit before it expires.
“If PURA does not take this action, the likelihood that projects participating in the program will be eligible for the federal tax credits will significantly deteriorate,” Herchel said. “If participating projects cannot avail themselves of the federal tax credits, then the cost of energy required for these projects will dramatically increase. This premium would create a completely unnecessary cost for Connecticut ratepayers.”
PURA did not respond to a request for comment.
He and others have pointed to what Massachusetts put into motion even before the Trump plan had fully passed Congress. On June 20, that state updated its solar energy incentive program — SMART — via emergency regulation to expedite their process for approving projects. Noting that the Clean Energy Buyers Association estimates household electricity costs will increase 6% as a result of the reconciliation package, Massachusetts Energy and Environmental Affairs Secretary Rebecca Tepper said: “President Trump and Congressional Republicans are taking us backward.”
The Connecticut Department of Energy and Environmental Protection is opting for a more measured approach, with official outreach to developers and other energy stakeholders this month to review new state and federal laws and to gauge their specific challenges. The point, said DEEP Commissioner Katie Dykes, is “so we can make sure that the steps that the state takes are targeted and effective, especially given the very short time that we’re working in.”
Dykes said DEEP is considering whether to initiate an expedited zero-carbon renewable solicitation for grid scale resources that could qualify for the tax credit if companies can move fast enough.
“We’re making sure that we’re engaging with the developers so that we’re not doing it in a vacuum, and that the steps that we are taking are aligned with what they need,” she said. To that end, DEEP issued a request for information last week to gauge developer interest with a speedy one-week turnaround.
Solar companies and advocates suggest that in the immediate term, the state find ways to speed up permitting and streamline other processes to get as much solar in the pipeline before timing restraints kick in. PURA is already looking at how to update the existing solar programs in Connecticut. A PURA spokesperson said that the federal changes could be part of what they consider.
Trahan, of the Solar and Storage Association, said the situation will require the legislature to step up, in addition to PURA, and reconsider both the restrictions the state has placed on solar over the years and the costs they’re willing to assume for things like labor and grid interconnections.
“The question is going to be, how badly do we want to have a solar industry here?” he said. “If we want one, we’re going to have to make some significant changes in the cost to develop solar.”
Dykes agreed money will be an issue – just as the state is trying to lower energy costs. “There’s going to be some tough questions ahead about how much of the federal tax credit revenue could be offset or made up by higher levels of funding from complementary state programs. That’s a difficult trade off,” she said. “Those will be important things to try to balance.”
Wallace at PosiGen said it would be more important than ever for states and solar businesses to make changes, both short- and long-term, as they face pressures from tariffs, problematic supply chains and high interest rates, in addition to the blow of losing the tax credit so rapidly. Even before the tax credit for his lease customers ends, they might find they are saving only 10% or 15% with their system instead of the usual 20%.
“We need to use the time we have now to find ways to lower costs, to be more efficient, to be able to better serve low-income communities,” he said. “We essentially need to increase the value that’s going to consumers now so that when the tax credit goes away and maybe prices have to increase, there’s enough of a buffer where it’s still a really compelling product.”
At Lodestar, Jeff Macel is already gaming out future plans through the lens of the company’s development pipeline, projects, and their drop-dead date of December 31, 2027.
“We’ve said, ‘okay, let’s work backwards from those dates. What projects can be built by then? We need to make sure we procure labor. We need to make sure we procure equipment. We need to make sure that we have utilities signed up to place them in service,’” he said. “So we’ve started that process internally to rank order our projects and say we can get these built by the date. And those are the sacred projects. Those are the ones we are focused on driving to the finish line.”
So far, companies that specialize in residential purchased systems, which face a much earlier loss of the tax credit, do not seem inclined to pivot to leased systems, which have the longer runway, though statewide data from PURA shows that shift has been happening on its own over the last few years.
“The amount of red tape involved with some of the stuff is cumbersome. So if I can do it without doing that, that would be my primary way to move forward,” said James LaPorta, owner of Litchfield Hills Solar, which only provides purchased systems and is booked through the end of the year. “My bigger concern is how it’s going to affect the whole industry.”
At Earthlight, Schneider said he doesn’t plan to shift the focus of his residential work, which has been mostly purchased systems. “I’m not looking for a doom and gloom here. Our industry has been through a lot over the last 15 years,” he said. “If our industry goes into a small downturn or even a large one, I’m ready for it.”
Herchel at Verogy said his first task is to shore up the immediate pipeline to ensure the viability of the projects underway before passage of the act. Then he will focus on the individual portfolio projects that could be completed before December 31, 2027.
“That’s kind of our narrow, immediate window for action,” he said. “We do believe, at least as we sit here today, there is a viable path for solar as a technology even without the current [tax credit] infrastructure; albeit it’s going to require a higher revenue stream to support it.”
This article first appeared on CT Mirror and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
