Get Ready for the Rooftop Solar Stall

This was supposed to be solar’s moment. Residential panel installations in the U.S. grew 71 percent in 2015 as the falling cost of panels made the power they generate more competitive. In December, Congress unexpectedly extended a tax credit set to expire at the end of 2016. Panel buyers will get reimbursed for 30 percent of the cost of new solar panels through 2019 and at least 22 percent through 2021.

Yet instead of energizing the industry, the extension has hurt growth, as solar companies no longer rush to meet a deadline. After jumping more than 1,000 percent since 2010, panel installations are projected to grow by only 0.3 percent in 2017, according to Bloomberg New Energy Finance. Faced with the industry’s first major slowdown, companies are figuring out their next move. “You’re selling the urgency to get in while the tax credits are available,” says Hugh Bromley, an analyst at BNEF. “Once you have long-term subsidy certainty, solar companies may struggle to reimagine their sales pitches.”