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The shift in US Energy policy has been more dramatic than we had envisioned and that is having far reaching implications for the solar market. The accelerated elimination of the solar investment tax credit is likely to increase the rate of solar installations over the next year. However, the outlook beyond 2026 is more complex.
Strategic Update:
In July, PowerBank (NASDAQ:SUUN) addressed the shifting policy landscape in the United States as it relates to renewable energy systems. The accelerated elimination of investment tax credits has caught several companies off guard because the new legislation requires projects to begin construction within the next year. PowerBank indicated that it has several late-stage projects that it believes it can initiate construction on and be “substantially complete” as required, before the new deadlines, to take advantage of the tax credits.
To achieve this goal, the company is focusing its efforts in the U.S. on states where the interconnection and permitting processes are well-established, thereby speeding construction and reducing time to completion.
PowerBank also noted that it still maintains a strong presence in Canada and intends to collaborate with federal and provincial authorities to advance domestic renewable energy initiatives, which remain a priority in Canada.
Industry Impact from US Legislation
At this point, it is unclear what the long-term impact on the solar industry in the U.S. will be as a result of the change in tax credits after July 2026. Still, it seems safe to say that the industry will not experience the same degree of growth that had been previously expected or if we consider the whole solar market, residential and commercial, it is possible the industry could even contract by the end of the decade.
However, despite this rather gloomy outlook for the solar industry in the U.S., several factors could result in a better commercial solar market through the balance of the decade. These potential positive drivers for the market include:
1) Rising energy prices could still drive solar investments given the speed with which they can be built.
2) The massive increase in domestic solar panel manufacturing capacity in the past three years which has increased at least 500% since the passage of the Inflation Reduction Act of 2022.
3) Battery Energy Storage Systems still have a full tax credit remaining in place until 2033 and a partial credit through 2036.
4) Finally, the US market seems ripe for permit reform and the change in tax treatment of solar projects after 2026 could be a catalyst to address the permitting process.
Note: In late July, SolarBank Corporation announced that it was changing its name to “PowerBank Corporation” effective July 28, 2025. The company’s stock symbol “SUUN” remained unchanged and we refer to the company by its new name (PowerBank) throughout our report.
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