BALTIMORE ― Solar industry veterans often refer to the shifting political and economic fortunes the sector has experienced over the past decade as “the solarcoaster,” and many at the Chesapeake Solar and Storage Association’s (CHESSA) 2024 Solar Focus conference were preparing for a bumpy ride during President-elect Donald Trump’s second term.  

But they also spoke about the industry’s resilience, and the fact that it still recorded strong growth during the first Trump administration, supported by state and corporate clean energy goals and ongoing cuts in the cost of solar panels, making solar increasingly competitive with other forms of generation.  

An affiliate of the national Solar Energy Industries Association, CHESSA is a regional trade association covering Maryland, Virginia and the District of Columbia, all jurisdictions with ambitious clean energy and emission reduction goals. 

Alex McDonough, a partner at policy consultants Pioneer Public Affairs, took a hardline view, predicting that Trump and congressional Republicans could target clean energy tax credits in the Inflation Reduction Act, including the 30% investment tax credit that has been critical for U.S. solar market growth.  

In the two-plus years since the law was passed, GOP lawmakers in Congress “have voted 54 times on different pieces of the Inflation Reduction Act to repeal,” McDonough said during a Nov. 19 panel at the two-day conference at the Marriott Baltimore Inner Harbor hotel. “We should take them at their word that they are putting this up on the table, and one of the potentially most damaging pathways to extend the 2017 tax bill that we could experience is if they start out with an opening negotiating position that fully goes after the IRA tax credits.” 

The buzz on Capitol Hill is that Republicans in the House of Representatives will have a budget reconciliation package to extend Trump’s signature legislation, the 2017 Tax Cuts and Jobs Act (H.R. 1), ready to introduce in the first week in January, McDonough said. Among its other business-friendly provisions, the law cut the corporate tax rate from 35% to 21%. It expires at the end of 2025, and the anticipated price tag for extending those cuts is about $5 trillion, McDonough said. 

Budget reconciliation is a legislative maneuver that allows budget bills to be passed on straight majority votes in both houses, which is intended to protect them from minority party filibusters. The Trump tax cuts and IRA were passed through the budget reconciliation process, as will be any bill to extend the 2017 cuts. 

Playing “Pollyanna” to McDonough’s tough pragmatist, Alison Kennedy, vice president at Boundary Stone Partners, another D.C. policy group, talked up the current conventional wisdom that the Republican states and districts that have benefited from a majority of IRA funds will help protect key provisions of the law. 

Factories are being built; jobs are being created, Kennedy said. “It’s time for these projects to shine. … 

“The communities, the states, those stakeholders; it’s their time to rise. It is their time to be involved in these discussions, to push, to call their Congress members … to say, ‘Yes, the IRA is making an impact in our communities.’” 

Ben Norris, vice president of regulatory affairs for SEIA, said the national trade group began preparing to defend the law even before President Joe Biden signed it in 2022. SEIA has been on the Hill meeting with the newly elected lawmakers who arrived in D.C. after the election and will bring its own members into town in December and January to talk with their representatives and senators. 

It’s one thing to show lawmakers the facts and figures ― like the 40,000 new solar manufacturing jobs created by the IRA ― Norris said. “It’s quite another to meet the proprietors of such a new facility, who are actually employing these folks in the districts of some of the lawmakers who are going to be taking some of these hard votes.” 

But both he and McDonough cautioned against depending too much on support from certain Republicans — for example, the 18 GOP representatives who in August sent a letter to House Speaker Mike Johnson (R-La.) asking for protection for the IRA tax credits that are benefiting their constituents. 

Republican majorities will be slim in both houses, so GOP lawmakers could have little wiggle room on a budget reconciliation vote to extend the 2017 tax cuts, McDonough said. 

“If we get to a point where there’s a tax bill on the floor that extends the 2017 tax cuts and includes all the IRA provisions in there, cutting them in any which way, they will vote for it,” he said. “They will have to vote for that bill for political reasons; because if that bill fails, they will be responsible for an income tax hike for every American.” 

An Industry That Adapts

With Trump returning to the White House, renewables — solar, wind and storage ― are facing a major change in the political and social narratives surrounding the industry. For four years, the industry has benefited from current Energy Secretary Jennifer Granholm’s urgent calls to “deploy, deploy, deploy” clean energy projects. 

But North Dakota Gov. Doug Burgum (R) and fracking executive Chris Wright, respectively Trump’s picks to lead the Interior and Energy departments, will be pushing a “drill, baby, drill” agenda aimed at “U.S. energy dominance” and “energy independence.” Trump is calling for a buildout of baseload energy — that is, natural gas or possibly nuclear ― aimed at cutting consumer energy prices. 

The anticipated retreat from President Joe Biden’s clean energy goals — such as a 100% carbon-free electric grid by 2035 — already is refocusing industry attention, and hopes, toward states and cities, like Maryland, Virginia and Washington, D.C., that have passed strong clean energy policies. 

Maryland has committed to a 60% reduction in the state’s greenhouse gas emissions by 2031, while Virginia’s Clean Economy Act of 2022 mandates the state’s two investor-owned utilities — Dominion Energy and Appalachian Power — to provide 100% clean generation by 2045 and 2050, respectively. 

Kennedy and others expect that Trump’s other policies, such as tariffs on all imports, will increase utility bills. “I don’t have a solution for how to make them not go up,” she said. 

She sees an opening for renewables if the new administration truly gets behind an “all-of-the-above” approach to energy policy and the solar industry positions itself as integral to the Trump narrative of energy dominance and independence.  

Solar and storage are critical to meeting new demand from data centers and together accounted for about 80% of new power on the grid in 2024, Kennedy said, citing figures from the U.S. Energy Information Administration. 

“How are we showing what manufacturing jobs are leading to this and telling those stories and drawing those lines to conclusions to allow Republicans to see the benefits and how we are manufacturing and deploying domestically,” she said. “It’s hard to argue with jobs.” 

Norris noted that the U.S. solar industry is slated to hit a major milestone by the end of the year, with domestic supply chains producing enough solar panels — about 40 GW of capacity ― to cover current demand, according to figures from SEIA and industry analysts Wood Mackenzie. 

“That means no more modules from overseas, potentially,” he said. “The idea of making all that go away through a sort of arcane piece of tax and financial legislation, I think it’s going to be unappealing to most.” 

But Walter McLeod, managing director of Monarch Strategic Ventures, which invests in clean energy, said Republicans could undercut the solar ITC through further corporate tax cuts. In 2017, Trump had proposed cutting the corporate tax rate to 15%, but settled for 21%, McLeod said during a panel on federal policy Nov. 20. 

“We should all expect that he’s going to take a second bite at [that],” he said. “When the number goes below 18% … the demand for the ITC at the corporate level will substantially drop off, and that could crush the market indirectly.” 

In other words, if corporate taxes are low enough, companies may not have the “appetite” or need for the tax credits generated by solar development.  

But McLeod and other speakers on the Nov. 20 panel also see new opportunities for the industry as it navigates wherever the solarcoaster takes them in the days and months ahead. 

“We’re an industry that adapts,” said Lara Younes, director of mergers and acquisitions and structured finance at Lydian Energy, a utility-scale solar developer. “We’ve already experienced a bunch of headwinds over the last years, and I think we should continue to be flexible, … optimistic and creative in whatever way we can.” 

Ian Gallogly, vice president of acquisitions for CleanCapital, which invests in and owns solar and storage projects, said a focus on performance, outcomes and national security, sometimes favored by fossil fuel companies, also could work for renewables. 

Robin Dutta, executive director of CHESSA, argues that the intermittency of solar or other renewables is being misrepresented. 

The intermittency narrative ― the sun doesn’t always shine, the wind doesn’t always blow — doesn’t take into account that renewables provide multiple, diverse options to meet growing demand in the U.S., Dutta said. 

“You have wind; you have land-based wind; you have offshore wind. You have residential solar and [commercial and industrial] and large-scale, and you’ve got energy storage, short-duration … behind-the-meter, standalone,” he said. “We have all of these solutions. Between solar and storage, we can play such a huge role in American energy dominance.”