For several years now, the clean energy offered by solar technology seemed all set to take over homes everywhere around the country. The government offered generous tax breaks and other incentives to homeowners, and utility companies agreed to buy excess electricity from homeowners with solar panels.
Such aggressive plans helped make California and North Carolina leaders in solar adoption. In 2017, however, the industry has begun to slow down.
Solar incentives are being slashed everywhere
With states, such as California, the problem with offering attractive buyback tariffs is easy to understand — the state now has excess power, and utility providers no longer see the attraction in paying homeowners for their power. California has ended its solar promotion initiative two years ahead of schedule.
Families that have already spent as much as $25,000 on large rooftop solar arrays are seeing their incentives disappear. In California, new, higher utility charges and lower buyback rates mean that these families will never break even on their investment.
Even as the government attempts to promote the adoption of clean energy, the lack of incentives means fewer people will buy.
States are cutting incentives because of budget constraints
New Mexico, one of the sunniest states in the country, has offered families investing in solar power a 10% tax credit for years now. Now that the state is on the brink of a budget crisis, however, they have let the tax credit expire. Eight other states, including North Carolina, have already let this happen.
It’s an international trend, too. Germany and Spain, two countries at the forefront of the move to solar adoption, have had to roll back energy buyback tariffs. Per Greentech Media, a leading energy news outlet, the rollback in those countries occurred in a matter of months.
So, what should you do?
In California, today, three out of four systems installed are bought with no incentives. Homeowners and businesses are paying the full cost upfront on their own. One reason for the smooth transition in California is that the state has been gradually winding down its incentive program for years now. It didn’t pull the plug all at once. Other states and countries are following California’s example.