High Level
A new draft of the Senate reconciliation bill released late
last week introduced sweeping financial headwinds for community solar. The
proposal would accelerate the phaseout of key federal tax credits while adding
a surprise excise tax on all new solar and wind projects, prompting fierce
industry backlash. Meanwhile, major U.S. corporations reaffirmed commitments to
community solar, and Michigan lawmakers proposed bipartisan legislation to
expand local access. These competing developments illustrate a growing rift
between federal budget policy and state- and market-level clean energy
momentum.
Full View
Senate Reconciliation Draft Adds Excise Tax, Accelerates
Clean Energy Credit Phaseout
Latitude Media, June 29, 2025; Politico, June 28, 2025; SEIA, June 28, 2025
• What happened: Released just before midnight on June 28, the Senate’s
updated reconciliation draft introduced a surprise excise tax on new wind and
solar projects and advanced the phaseout of the Investment Tax Credit (ITC) and
Production Tax Credit (PTC) by one year.
• Who did it: Senate Republicans released the revised text following
earlier committee drafts. The excise tax provision had not appeared in previous
versions.
• Why they did it: The bill seeks to reduce federal support for
renewable energy and redirect funding to other fiscal priorities.
• Stakeholder views: SEIA President Abigail Ross Hopper said the bill
“guts the very industries that are lowering electricity bills, revitalizing
U.S. manufacturing, and building more new power capacity than every other
energy technology combined.” CCSA CEO Jeff Cramer warned the legislation “would
wipe out hundreds of gigawatts of potential new solar capacity.”
• What happens next: The Senate must now reconcile its version with the
House bill. If enacted, the credit phaseout would begin in 2026, and the excise
tax would apply immediately to new utility-scale and distributed energy
projects.
Source
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Corporate Investors Defend Community Solar as
Decarbonization Tool
Coalition for Community Solar Access, June 25, 2025
• What happened: Microsoft, Google, Walmart, Starbucks, and T-Mobile
reiterated their investments in community solar as part of long-term ESG
strategies.
• Who did it: The Coalition for Community Solar Access (CCSA) published
a June 25 report highlighting the scale and diversity of corporate
participation.
• Why they did it: Companies view community solar as a scalable,
cost-effective means of accessing clean energy across multiple jurisdictions.
• Stakeholder views: CCSA CEO Jeff Cramer said, “The buy-in to community
solar is now vast and varied, coming from the Department of Energy, Fortune 500
companies, and state legislatures across the country.”
• What happens next: Corporate buyers are expected to join advocacy
efforts to preserve clean energy tax credits and counteract the proposed excise
tax.
Source
Michigan Republicans Introduce Bipartisan Community Solar
Legislation
Coalition for Community Solar Access, June 25, 2025
• What happened: HB 4590 was introduced in the Michigan House to
establish a formal community energy program.
• Who did it: Republican legislators filed the bill on June 25, 2025,
with support from CCSA and local economic development organizations.
• Why they did it: The legislation seeks to lower household electricity
costs and expand energy choice by supporting third-party community solar
providers.
• Stakeholder views: CCSA VP Matt Hargarten praised the bill, saying,
“Community solar is an integral part of an all-of-the-above energy
strategy…while strengthening Michigan’s energy dominance.”
• What happens next: The bill will proceed to committee hearings in the
coming weeks, with amendments anticipated.
Source
What’s the So What?
The Senate's reconciliation draft poses an existential
threat to community solar development in the United States. The combined
effects of accelerated ITC/PTC phaseouts and a blanket excise tax will
obliterate the economics of most distributed solar projects in the pipeline.
Without federal credits, community solar projects lose their core financing
tool, and the new tax imposes an immediate capital penalty on systems that were
never structured to absorb it. For many developers, the math simply won’t pencil
out—and the result will be widespread cancellations, company closures, and job
losses across the supply chain.
Even projects already underway may not survive. Investors
will reassess risk profiles, financing terms will tighten, and insurers may
pull out of certain markets altogether. Developers operating on thin margins
will be the first to collapse, but the entire sector faces destabilization if
these provisions become law.
Still, all is not lost. State action, like Michigan’s HB
4590, and the continued backing of large corporate buyers could create a new
layer of policy and market insulation. But unless the federal proposal is
amended or delayed, community solar is about to enter a period of attrition,
not acceleration. The industry must either find new financing models quickly or
face the most dramatic contraction since its inception.
Bibliography
Latitude Media, “A surprise excise tax sends the clean
energy industry into panic,” June 29, 2025. https://www.latitudemedia.com/news/a-surprise-excise-tax-sends-the-clean-energy-industry-into-panic
Politico, “‘Kill shot:’ GOP megabill targets solar, wind
projects with new tax,” June 28, 2025. https://www.politico.com/live-updates/2025/06/28/congress/new-tax-on-solar-wind-power-00431388
Solar Energy Industries Association, “Solar and Storage
Industry Statement on Proposed Senate Reconciliation Text,” June 28, 2025. https://seia.org/news/solar-and-storage-industry-statement-on-proposed-senate-reconciliation-text
Coalition for Community Solar Access, “Unprecedented
Investment by Major US Brands Driving Growth of Community Solar and Distributed
Energy,” June 25, 2025. https://communitysolaraccess.org/news/unprecedented-investment-by-major-us-brands-driving-growth-of-community-solar-and-distributed-energy
Coalition for Community Solar Access, “Statement from Matt
Hargarten, CCSA VP of Campaigns, on HB 4590 in Michigan,” June 25, 2025. https://communitysolaraccess.org/news/statement-from-matt-hargarten-ccsa-vp-of-campaigns-on-hb-4590-in-michigan