'Big beautiful bill' approved by U.S. House would eliminate tax credit for solar panel installations

When the U.S. House of Representatives passed the "One Big Beautiful Bill Act," much was made about some of the key pieces of the legislation.

The bill extends the Trump tax cuts approved during the president's first term, and quadruples the state and local tax deductions for Californians, as well as making potentially big cuts to Medicaid.

But, the bill also makes other cuts that didn't necessarily make headlines upon its approval, including the elimination of the federal tax credit for the installation of solar systems.

It's something that some people in the solar industry said they were blindsided by, only finding out the morning after the bill was approved by a narrow margin.

"I woke up to a bunch of messages, from Facebook chatter, and from our whole solar community, up in arms, just completely alarmed that this was snuck in at the last minute," said Cynthia Alvidrez, a solar energy consultant in Rancho Cucamonga. "It's a big deal to take such a big incentive and abolish it overnight."

Alivdrez said the current federal tax credit for the installation of home solar systems, which was extended by the Inflation Reduction Act during the Biden administration, allows homeowners to save approximately $12,000 when they install solar systems on their rooftop.

But if the bill approved by the House were to become law, that tax credit would be eliminated.

"It's going to be harder for homeowners to say 'yes' to solar, and it's a big step back for the solar industry," Alivdrez said.

Alvidrez also said that if fewer people install solar systems, it will eventually have an impact on the state's power grid, which has made a lot of progress in recent years as more and more families have added solar systems to their homes.

"What a lot of people don't understand is we need solar," Alvidrez said. "Solar rooftops, thousands and thousands of them, are supplying the grid at a time when they need it the most."

"We need that electricity. We can't keep up with supplying all homes with this electricity, so it will play a major role," Alvidrez said. "We'll see more power outages, we'll see prices go up, and we'll see stricter demands on when you can use electricity, most likely."

But whether the bill is adopted by the U.S. Senate and signed by the president is another question.

Some Senate Republicans have expressed concerns about the bill, saying it doesn't go far enough in cutting spending. Others have shared their concerns that some of the cuts are too much, namely, some of the cuts that target Medicaid.