In 2025, the United States made major changes to how it supports rooftop solar energy. These changes mostly involved solar funding cuts for programs that helped low- and middle-income households. While this shift raises concerns about solar access and cost, it also marks an important moment in the country’s energy transition.
What Were the 2025 Solar Funding Cuts?
The “Solar for All” Program & The 30% Federal Tax Credit
The Inflation Reduction Act (IRA), passed in 2022, included funding for many clean-energy initiatives—including solar for rooftop homes. One key program was Solar for All, which aimed to help lower-income households afford solar systems. However, in August 2025 the Environmental Protection Agency (EPA) suddenly ended the program, citing budget and policy changes. In addition to direct subsidy cuts, federal tax credits for residential solar installations, which had been 30 %, began to phase out faster than expected. The One Big Beautiful Bill Act (OBBB) accelerated the elimination of these credit programs and tightened eligibility.
Impact on Low-Income & Middle-Income Households
For many families, especially those with limited income, federal help for solar is essential. The Solar for All program was designed to support around 900,000 households. With its cancellation, many families who planned to install solar are now faced with much higher costs. Without subsidies, the cost of a rooftop solar installation may become too high for many households. This is especially critical because many low- and middle-income families already struggle with high utility bills. When solar becomes less affordable, it undermines efforts for a fair transition to clean energy.
The Decline in Rooftop Solar: Economic & Local Power Grid Implications
Although the household impact is most evident, there are wider implications. Residential rooftop solar helps reduce reliance on fossil fuels. Cutting back on support may slow the growth of rooftop solar adoption and reduce momentum toward cleaner energy. Economically, less demand for rooftop solar may affect the solar industry – including solar installers and manufacturers. That means possible job losses and/or business slowdowns.
On the energy resilience side, a decline in rooftop PV will lead to a natural decline in residential energy storage systems (solar panels + hybrid inverter + 48V battery storage). These systems are designed to not only provide home back-up power when the grid goes down, but also help lower the overall strain on local power grids. Reduced adoption may leave more pressure on the traditional centralized power grid, which is more vulnerable to disruptions.
The Broader Policy Context & Solar Market Shifts
These funding cuts must be seen in the context of federal budget debates and political pressure. The OBBB law accelerated the phase-out of tax credits for mature clean technologies like solar. Supporters argue that since solar is more mature now, subsidies should be reduced to control federal spending. Critics counter that withdrawing support too early could slow innovation and hurt the clean-energy transition.
The Category Shifts to the Commercial Market
In response to these changes, the solar industry is adapting. Some companies are shifting focus from residential rooftop systems to commercial and community solar projects, which are less dependent on residential subsidies. State-level incentives still exist in many places, but they differ widely by state—so households in strong-incentive states may fare better than those in weak-incentive states. Also, alternative financing models—like solar leasing or power purchase agreements (PPAs)—may become more common. These let homeowners get solar with lower upfront cost, but often involve long-term contracts and may not be as financially advantageous as owning the system.
State and Local Solutions
With less federal support, state and local governments become more important. States like California and New York have strong solar incentives and rebates for homeowners. Municipalities can also use community solar programs that let residents benefit from solar even if they don’t install panels on their own roof.
Private Sector Innovation
The private sector will have to step up its role. Solar installers and financiers can design creative ways to make solar more affordable—think streamlined installations, lower cost panels, bundled financing, etc. As solar technology improves and prices fall, some of the lost subsidy support may be offset by lower costs and smarter business models.
Future Federal Policy Considerations
Looking ahead, federal policymakers might need to revisit how clean-energy incentives work—especially for lower-income households. To meet climate goals and ensure fairness, it’s important to find ways to support household adoption of solar without creating unsustainable burdens. That might include targeted incentives, new financing models, or policies designed specifically for disadvantaged communities.
The recent cuts in rooftop solar funding represent a major shift in U.S. energy policy, and they carry big implications for households, the solar industry, and the broader energy transition. For many low- and middle-income families, the loss of federal support threatens their ability to adopt solar and reduce their utility bills. As the U.S. moves through this policy change, the challenge will be balancing fiscal responsibility with the urgent need for a clean, equitable energy future. The role of state policies, private sector innovation, and future federal initiatives will be critical in ensuring that solar remains within reach for all households.
Works Cited
“EPA kills Biden-era grant program to boost solar energy for lower-income households.” PBS/New Hour, 7 Aug. 2025.
PBS
“Federal Solar Tax Credits and the One Big Beautiful Bill.” Belmont Solar Blog, 4 Jul. 2025.
Belmont Solar
Nazaire, Erlyne J. “The One Big Beautiful Bill Act: Changing the Landscape for US Clean Energy.” Thomson Reuters Practical Law, 11 Aug. 2025.
Thomson Reuters
“Termination of EPA’s Solar for All Grants Betrays Public Health, Energy Justice, and Economic Opportunity.” Environmental Protection Network, 7 Aug. 2025.
Environmental Protection Network
“US to Kill US$7 Billion Solar for All Support for Low-income Households.” PV-Tech, 8 Aug. 2025.
PV Tech
“The Final Version of the Solar Tax Credit Changes…” SolarInsure.com, 16 Jul. 2025.
Solar Insure
“The Clean Energy Provisions in the ‘One Big Beautiful Bill.’” SEIA, 21 Jul. 2025.
SEIA