WASHINGTON (AP) — As Republicans in Congress advance a sweeping tax and spending cut bill, the renewable energy sector braces for significant impacts. In Raleigh, North Carolina, Will Etheridge, CEO of Southern Energy Management, warned his 190 employees of potential job losses due to proposed cuts to clean energy tax credits.
“(The changes) would almost certainly include the loss of jobs on our team,” Etheridge wrote, emphasizing transparency despite the discomfort of the situation. The bill, currently in the House, proposes to eliminate a 30% tax credit for rooftop residential solar by the year’s end, a credit extended by the Biden administration’s Inflation Reduction Act into the next decade.
Former President Donald Trump has criticized the clean energy tax credits as part of a “green new scam” that improperly channels taxpayer subsidies towards a “globalist climate agenda” and renewable sources like wind and solar. Industry experts and businesses warn that the GOP-backed bill could reverse growth in the sector and lead to job losses.
Impact on the Solar Industry
“The residential solar industry is going to be absolutely creamed by this,” said Bob Keefe, executive director of E2, a business group advocating for pro-environment policies. The proposed legislation not only targets residential solar but also phases out tax credits for utility-scale solar and wind projects, although the residential solar credit faces an immediate cut.
In recent years, companies have announced over $20 billion in clean-energy investments in North Carolina. Etheridge, whose company specializes in solar panel installations and energy efficiency, was among many who lobbied Republican U.S. Sen. Thom Tillis of North Carolina for amendments to the bill. Despite Tillis being one of three Republicans to vote against the measure, he announced he would not seek reelection after Trump indicated support for a primary challenger.
Economic and Employment Concerns
Etheridge anticipates that losing the tax credit will necessitate laying off 50 to 55 employees. He described the elimination of residential tax credits as a “bait and switch,” expressing frustration over the instability this creates for businesses reliant on such incentives.
“I made a decision from being an employee to taking out a loan from my grandmother to buy into my business and put my house on the line,” Etheridge said, highlighting the risk taken under the assumption of stable tax credits. Now, he is exploring ways to diversify his business to mitigate the impact.
Adam Michel, director of tax policy studies at the Cato Institute, a libertarian think tank, argues that businesses dependent on federal subsidies should reconsider their viability. “If you require a money-spigot from Washington to make your business viable, it probably shouldn’t have been in business in the first place,” Michel stated.
Broader Implications and Future Outlook
Before the bill’s debate, E2 experts reported that $14 billion in clean energy investments nationwide had already been postponed or canceled this year. The Senate’s version of the bill, passed on Tuesday, removes a tax on certain wind and solar projects proposed in earlier drafts and grants utility-scale projects a grace period before phasing out tax credits.
Karl Stupka, president of Raleigh-based NC Solar Now, which employs about 100 people, noted that the Senate’s bill mitigates the impact on commercial projects while severely affecting residential tax credits. “They took it away from every average American normal person and gave it to the wealthier business owners,” Stupka said, predicting a rush to complete solar projects before the credit’s expiration and subsequent layoffs affecting half his workforce.
“It would cause a pretty severe shock wave,” he added, anticipating broader economic repercussions.
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