Solar Industry Faces 50-60% Demand Drop, 250,000 Jobs at Risk

The U.S. solar industry is facing an unprecedented crisis as two major companies, Sunnova and Mosaic, filed for bankruptcy in June. This development comes as part of the broader impact of the Trump administration's tax reform bill, which has significantly reduced tax incentives for residential solar energy. The industry is bracing for a potential 50-60% drop in demand, putting 1,500 small businesses and 250,000 jobs at risk.

The solar industry had hoped that the Senate would soften the House's aggressive cuts to solar tax incentives. However, the Senate's latest draft largely mirrors the House's stance, only slightly delaying the phase-out of certain tax credits. This has led to a wave of bankruptcies, with nine major clean energy companies filing for bankruptcy this year alone, approaching last year's record of 16.

Industry experts are sounding the alarm. Carter Atlamazoglou, a managing director at FTI Consulting, stated that companies are facing liquidity pressures and that the industry is in a critical state. The uncertainty surrounding the tax incentives has left potential investors and homeowners in a state of limbo, with many choosing to wait and see how the situation unfolds.

The market's reaction to the Senate's draft was swift and severe. Solar stocks took a significant hit, with Sunrun's stock plummeting by 36%, Enphase Energy down by 21%, First Solar falling by 19%, and SolarEdge dropping by 30%. Analysts had expected the Senate to ease the policy, but the draft's harsh stance on residential solar has led to a dramatic market response.

The industry is now facing a potential 50-60% drop in demand, which could lead to the closure of many solar companies. Ara Agopian, CEO of Solar Insure, predicts that without tax incentives, many companies will struggle to stay afloat. Abigail Ross Hopper, CEO of the Solar Energy Industries Association, warned that the residential solar industry alone could see 1,500 small businesses and over 250,000 jobs at risk. Dan Conant, CEO of Solar Holler, a West Virginia installation company, stated that companies have only six months to completely overhaul their business models, a task he believes is nearly impossible.