September 23, 2026
Byline by Mary Beth Mandanas, CEO, Onyx Renewables
The expiration of the federal investment tax credit (ITC) for solar energy projects needs no eulogy. Though the ITC expired, it’s clear that solar won’t meet the same fate.
With certain eligibility for the ITC sunsetting on July 4, many companies that operate in the solar industry may be grateful for its ending — in particular, the closure of the complexities and the tax liability risks imposed on asset owners. In a post-ITC world, solar companies will continue to expand their businesses faster and more nimbly as the technology has been proven and is a more affordable energy option, especially with the backdrop of ever increasing fuel prices. Developers can bring projects online more quicklyand cheaply as equipment and labor costs decrease, deliver high-quality power and other resiliency benefits at a time when the grid is struggling to adapt, and help the electric utility industry with enhancing grid reliability.
In fact, solar generation is leading the power sector. The industry has celebrated new firsts this year: In May, solar overtook coal in the U.S. for the first month on record. According to Wood Mackenzie, solar and storage provided over 90% of all new power added to the U.S. grid in Q1. Challenges certainly remain, not just through the loss of the ITC but in rising capital costs and higher power purchase agreement (PPA) prices for customers. And yet, onsite solar and storage remains not just financially sound but an antidote to business’s urgent energy needs at this moment. Here’s why: Even with the tax credit’s expiration, solar remains among the lowest-cost sources of new generation. And for businesses looking to shield themselves from rate volatility and reliability risks, onsite solar and storage offers the most direct path to stable, predictable energy costs amid rising rates and record demand growth.
Solar wins on speed to power
Rapid electrification, the reshoring of manufacturing and reindustrialization of the American economy,and of course, the energy demands of AI and data centers, have made speed to power especially pertinent, as companies race to bring new facilities online.Post-ITC, developers can directly address such concerns, and real benefits can take shape when there are no longer third-party contingencies. Take tax equity partners as an example: Having a tax equity partner, or partners, involved in a project inevitably adds layers of complexity, resulting in additional time needed for diligence and approvals at various stages. This is most impactful at mechanical completion, as projects can stall while waiting to secure tax equity approvals. If construction begins before approvals, the project risks losing its eligibility to monetize the credits. Such timelines can contribute to delays ranging from a few days to even months. And until these approvals are reached, developers cannot advance construction, request utility permission to operate, or ultimately turn the system on at all.
Projects pursuing the ITC must also comply with Foreign Entity of Concern (FEOC) restrictions, while those seeking the domestic content bonus must also satisfy sourcing requirements. In practice, this means bringing in outside consultants to review documentation, paying for compliance reports, and waiting on additional diligence by tax equity partners before their final approval — not to mention longer lead times for FEOC-compliant or domestic content material. Developers may end up buying more expensive equipment, with no guarantee of capturing the benefit — an uncertainty that can add on weeks of internal review. In a post-ITC world, however, solar providers will no longer need to wait weeks to months to move a project forward. The grid needs capacity now, and faster timelines aren’t just a nice-to-have; they’re speed to power in practice.
Solar still delivers better value than utility power alone
Even without the ITC, customers receive high-quality and reliable power from a distributed solar system. Utility rates will continue to increase at elevated rates due to the backlog of regulated utility capital expenditures – according to a 2026 Lawrence Berkeley National Laboratory analysis, commercial and industrial nominal utility rates have already climbed 26-27% since 2019, with prices set to rise further. At the same time, general PPA rates will be higher post-ITC. It’s all relative: Even if customers save 15-20% on utility bills — down from the 25-35% seen in past subsidized markets — those savings are still meaningful, especially when compared to rising utility rates.
Without the ITC, companies in the solar industry have taken different approaches to the transition. Many executed safe harbor strategies and stockpiled equipment, with some purchasing equipment for future pipeline, while others decided not to invest in equipment beyond their contracted projects. At Onyx, we chose the latter, safe harboring equipment only for contracted pipelines. This approach comes with its own benefits, like the freedom to procure the best commercially available technology at the time of construction rather than being tied to older inventory with potentially lower efficiency. Solar providers choosing to take this path will have faster project completion in the form of saved weeks or months, simpler PPA negotiations with less risk passed on to the customer, and access to the latest technology. That speed matters. Waiting in this industry has rarely paid off, and the best time to build, aside from years ago, is right now.
The industry’s next chapter requires new strategy
With any roadblocks come greater resilience, and the solar industry emerges from this transition more strategic and forward-looking. State-level incentives remain a durable foundation and, in several cases, are picking up where the ITC left off. Massachusetts, for example, recently won regulatory approval for SMART 3.0, a full redesign of its solar incentive program that will now pay out over 20 years, up from its previous 10 years. New Jersey’s Successor Solar Incentive (SuSI) program also provides long-term incentives across project types, including a competitive solicitation track for large commercial projects.Other states offer Solar Renewable Energy Certificate (SREC) markets, giving C&I solar systems an added revenue stream beyond energy savings alone. Roughly 30 states currently have incentives for C&I solar, community solar, or allow for net metering, which enables consumers to send excess electricity back to the grid.
Beyond policy, Onyx will lead on adapting on the commercial side, offering more flexible PPA terms — from adjusted pricing structures to varied contract lengths — that allow businesses to hedge their power prices and protect their profit margins in this rising utility rate environment. The players who thrive in this next chapter will be those fluent in state-level landscapes, thinking strategically about where and how to build, rather than relying on a single federal credit. The industry is moving toward being able to operate in any environment — with or without the ITC — ensuring the future of strong players in the space.
Solar’s post-ITC future remains bright
Solar energy is affordable, accessible, and provides speed to power. In an environment where power demand is soaring and the nation is electrifying, solar and storage solutions have healthy tailwinds for growth. This momentum helps us build toward the new power paradigm, where localized energy serves as the basis of a business’s power supply, while the centralized grid functions as a backup. Solar is a proven technology at the center of that shift, and it no longer needs the ITC. The industry is moving toward being able to operate in any environment, and that’s exactly where it should be.
Link to article in pv magazine.
