Recently, we’ve received questions from customers about the future of the investment tax credit (ITC). This credit currently covers 30% of a solar system’s cost for those who qualify.

The coming administration promises major changes in policy and regulation. Arch is here to help homeowners understand the possible ITC options for their solar projects in 2025.

We will focus on what has previously happened, what is technically possible, and what we believe will occur.

What has happened before 

When Trump took office in 2017, many in the national and local solar industry had similar concerns as today. Despite talk of reducing or cutting renewable energy incentives, Wisconsin’s solar industry actually grew during the first Trump administration.

From 2016-2020, Arch saw the greatest competition in the Milwaukee residential market. As a company, we started building larger commercial projects like IKEA Oak Creek and Lange Bros Woodworking. Beyond commercial rooftops, Arch expanded into utility-scale solar (greater than 1 Megawatt) in Wisconsin.

Arch’s Take

In the previous Trump Administration, we saw the home solar industry follow economic trends of competition breeding growth. Ultimately, that helped customers identify which local companies were stable and ready to meet market demands.

What is possible

Repealing the ITC would require legislative action, not an executive order or proclamation. Even budgetary reconciliation (the procedural process that got it passed) still requires legislative action. Ultimately, customers saw which local companies were stable and ready to meet market demands.

How can the ITC be changed?

Congressional Approval

A bill to repeal or amend the ITC must be introduced, passed by both the House and Senate, and signed by the President. 

Arch’s take: This is highly unlikely. Most Republican congress members’ districts benefit from the ITC, and 18 formally signed a letter opposing its repeal. 

Executive Advocacy

The administration could push Congress to prioritize repeal through public support or inclusion in broader tax reform. 

Arch’s Take: This is exceedingly unlikely, but harder to illustrate in clear numbers. The Trump administration has an incredibly ambitious list of objectives, on which solar is low.

The administration will likely focus on immigration, DOGE, and trade changes before closely reviewing solar policies.

Because solar has bipartisan support and boosts economic growth in many rural areas, a public repeal seems unlikely.

Regulatory Adjustments

The administration might not repeal the Inflation Reduction Act directly, but it could weaken it by changing IRS rules or reducing clean energy production programs.

Arch’s Take: This is the most realistic path to changing the current status quo. Government financial incentives for renewables could change in many ways, but the residential solar ITC is the most secure.

Programs like REAP (Rural Energy for America) might be at risk. Future benefits for low-income individuals from some government agencies could also be in jeopardy.

The Energy Policy Act signed in 2005 by President Bush created the beginnings of a solar tax incentive. Since the solar ITC predates the IRA, no single agency claims ownership of it (unlike REAP, which the USDA owns).

What we think could happen:

While there is uncertainty ahead, we want to focus on what Arch believes is most likely to happen.

Exaggerated threats to solar

President-Elect Trump will keep discussing green energy before his inauguration and in his first 100 days. If people believe that renewable energy projects face threats, the new administration will hold a stronger negotiating position.

We do not want to ignore any threats. However, it helps the Trump Administration to be loud and aggressive. Many people think his opposing party supports this issue.

Arch’s Take: We expect there to be a lot of noise about renewable energy from all sides over the next few months.

Ultimately, we recommend focusing only on action and the policy changes Congress has introduced.

Clawbacks on green energy

President-elect Trump has made it clear that the “Green New Deal” is part of government spending that he would like to curtail. The new administration wants to extend past tax cuts. This could allow them to save money by not spending on renewables. As a result, they may change some of the funds and programs available. 

As mentioned before, the best way to cut ‘green’ funding is not through the ITC. Instead, we should focus on specific programs. These include USDA REAP and future Department of Housing programs for Energy Communities. We should take confidence from House Speaker Mike Johnson’s statement that they expect to take a scalpel to the IRA, not a sledgehammer.

Arch’s Take: We expect some changes to renewable incentives. However, the residential solar incentive should stay stable. This is because it is a simple tax credit.

We also predict the government to scrutinize larger programs like the USDA Rural Energy for America or Low-Income programs.

Solar will keep on growing 

Renewables have economic momentum like never before. In many scenarios, especially new construction, renewable options are the cheapest form of energy.

Regardless of this election’s outcome, we see that energy rates continue to rise.

We expect energy demand to rise faster than ever before.

Recently retired WE Energies CEO Gale Klappa is quoted in his exit interview with the Milwaukee Business Journal:

“We’re on the verge of a different growth era for companies like We Energies. Historically, we’ve seen customer consumption of electricity in our region grow at somewhere between a half and seven-tenth of 1% a year. To show you the dramatic change we’re now seeing, starting in 2026, our new forecast shows we expect that growth in energy consumption will be 4.5% to 5% per year.”

As electric utility prices continue to rise, solar becomes a direct way to self-stabilize your utility bills.

Arch’s Take: Regarding the energy you can generate on your own, solar is by far the cheapest and most accessible. Other options like wind, hydro, or geothermal energy are much more expensive. They are not available to most consumers. Even with no incentive, solar would continue to be the cheapest way to generate energy on your property.