For more than a decade, Nevada has punched above its weight in solar energy growth.

The Silver State generates a quarter of its electricity from solar, ranking second in the nation. The Solar Energy Industries Association (SEIA), a solar trade group, estimates that there are more than 8,500 jobs in Nevada’s solar industry and close to 140,000 solar installations across the state. And 2024 saw the state’s greatest expansion of solar capacity in a decade, with about 1,600 megawatts of power added.

Covered in desert, Nevada is well-positioned geographically to convert its abundant resource — sunshine — into energy. The 2022 passage of the Inflation Reduction Act (IRA), a climate-focused bill passed with only Democratic support in Congress, expedited the growth and stability of the state’s solar industry. 

The bill established supply-side tax credits boosting solar manufacturing and production as well as demand-side credits inducing residential rooftop and commercial solar and grant funding for low-income Nevadans to access solar energy — giving solar companies in Nevada better financing and expanded markets.

These tax credits are scheduled to last until the 2030s, intentionally written with a longtime horizon to encourage the buildout and onshoring of domestic solar manufacturing and production. 

But with a Republican Congress preparing for massive spending cuts, Nevada’s solar industry is worried about its future.

“Right now, our entire industry is truly driven by the tax credit,” said Stephen Hamile, the chief operating officer of Las Vegas-based solar company Sol-Up. “Because without this tax credit, those players in the market that hold those assets would be unlikely to stay in the market.”

As Republicans work to finalize a budget cutting $1.5 trillion in federal spending by Memorial Day, a group of congressional Republicans — including Rep. Mark Amodei (R-NV) — has expressed concern to leadership that cutting these tax credits could result in rising energy costs and job loss in their districts. 

Meanwhile, industry groups and lobbyists are arguing for the preservation of the tax credits while privately warning solar companies to lower their planning capacity, according to one lobbyist who expects numerous credits to be phased down but not eliminated.

Hanging in the balance is Nevada’s solar industry, which wants to defend a trio of tax credits it said made solar a realistic choice for consumers.

“What's good about this tax credit is it really boosts sales,” said Tyson Hooten, the Nevada branch manager of solar installation company Freedom Forever. “Without it, it would be difficult for people to actually afford solar … the tax credits have been huge the last few years, keeping [solar] alive and current in Nevada.”

What are the tax credits?

SEIA is focused on the preservation of three key tax credits:

• 45X, the advanced manufacturing production credit
• 48E, the tech-neutral (meaning any zero-emissions technology qualifies) investment business tax credit
• 25D, the residential tax credit 

Some of these tax credits predate the IRA, but the law turbocharged American solar companies.

Solar industry leaders credit 45X, the manufacturing credit, with dramatically growing the solar and storage supply chain. Companies receive credits for making solar components, with the size of the credit depending on the item, such as $3 per kilogram of solar-grade polysilicon (a crucial component of solar cell production) or 4 cents per watt-direct current in photovoltaic cells.

That credit has powered record-breaking growth in solar manufacturing, with domestic module manufacturing increasing 190 percent between 2023 and 2024. Sean Gallagher, SEIA’s senior vice president of policy, said in an interview that the U.S. is now third among nations in solar module production, up from ranking outside the top 10 just three years ago. That particular credit has bolstered domestic manufacturing of everything from solar panels to steel foundations to power electronics — a key goal that the Trump administration has cited as a reason for higher tariffs.

“We're seeing increasing movement toward establishing factories for all upstream facilities here in the U.S.,” Gallagher said. “That's a direct result of the 45X tax credits.”

The 48E and 25D tax credits tackle the demand side, aimed at making solar installations more affordable for businesses and individuals, respectively. 

The 48E investment tax credit allows companies to receive a discount when constructing clean energy facilities. The size of the credit — which starts at 6 percent and can scale up to 30 percent — increases based on various incentives meant to encourage using domestically produced content and meeting prevailing wage standards.

And the 25D credit, in particular, has been critical for solar — with the government subsidizing 30 percent of the cost of residential solar projects.

Hamile said that the 25D tax credit — coupled with a surplus of merchandise driving down prices — was a bulwark against market uncertainty.

“Without those two in place, with rising interest rates, the solar industry would likely have sustained a much larger downturn than it has,” Hamile said. “Especially if we're going to have an increase in tariffs, then this tax credit is essential, really, for the survival of our industry.”

Potential cuts and impacts

House Republicans’ budget outline calls for $1.5 trillion in spending cuts — and trimming the IRA tax credits is a popular idea to generate savings. 

But not all tax credits are created equal. The supply-side ones bolstering manufacturing — 45X in particular — have a broader base of support on Capitol Hill, given that they have enabled industry growth in Republican districts (especially for lithium in Northern Nevada) and are a policy tool aimed at the bipartisan goal of reshoring manufacturing. 

But the demand-side credits have found themselves in Republicans’ crosshairs, with 48E in particular drawing ire. GOP lawmakers say the solar and wind energy industries are already established players in the market that don’t need subsidization, and that the government should not pick favorites when it comes to energy sources. 25D, which the Tax Foundation estimates will cost $50 billion through 2034, is also likely on the chopping block.

Industry lobbyists are trying to make the case that the credits work in tandem — that making solar energy affordable is as important to building out a domestic supply chain.

“If those factories are going to be sustained and go forward, and we’re going to continue building out that supply chain, those factories need customers,” Gallagher said. “It's 48E and 25D that ensure that those factories have a market to sell into.”

There’s been evidence that the lobbying is working, especially because industry advocates are making a manufacturing and energy capacity case — backed by utilities — rather than an argument around climate change. Groups of House and Senate Republicans have publicly urged caution around IRA cuts, asking leadership to maintain those that lower energy costs and spur manufacturing growth.

With demand for power increasing, Gallagher said SEIA has been educating Republican members — many of whom adopt an “all-of-the-above” energy strategy — about solar energy’s advantages. About 80 percent of new electric-generating capacity added in the U.S. in 2024 (including the Gemini project outside of Las Vegas) was from solar and battery storage, largely because those types of projects are easier to build and deploy quickly.

“I think Republicans in Congress — and frankly, everybody in the Congress — is starting to understand that you don't want to fool around with the business certainty that allows us to keep those installations going,” Gallagher said.

But success could end up meaning a phasedown, rather than wholesale cancellation. One lobbyist, granted anonymity to speak candidly, said they are advising companies to avoid pursuing projects that require a long-term IRA tax credit to pencil out. The expectation is that the credits will remain somewhat intact but that their 10-year time horizon will be shortened — and that the best-case scenario may be their preservation beyond the end of the Trump administration.

Republicans could also find savings by tightening the rules on who can claim certain credits — particularly those that offer bonus credits, such as 48E. The credit, which is currently tech-neutral, could be rewritten to only apply to geothermal and hydroelectric power rather than the more politically contentious solar and wind energy, which have drawn the personal ire of President Donald Trump.  

Sen. Catherine Cortez Masto (D-NV) said she’s heard from companies that the Trump administration is holding up approved grant funding for certain renewable projects, adding further uncertainty to businesses already reeling from on-and-off tariff policy.

“I am already hearing [that] because of [the administration’s] concerns about solar and wind, they're not allowing states to take advantage of the incentives that we have fought for,” she said.

Savings and affordability

Republicans interested in preserving various IRA tax credits have argued that taking an ax to the law will increase energy costs and result in job losses. Advocates argue that hampering solar growth will raise energy costs across the board by shrinking the amount of low-cost energy being added to the grid.

Energy Innovation, a nonpartisan climate think tank, projects that a wholesale repeal of IRA tax credits and funding programs would increase energy bills in Nevada by $40 per year in 2030 and up to $90 by 2035, while costing more than 5,000 jobs by 2030. A report from environmental research firm Rhodium Group estimates that a full repeal of the tax credits, along with a greenhouse gas regulatory rollback, would cause Nevadan energy bills to be 6 percent higher by 2030, assuming a medium emissions level — the third-highest jump in the country.

A total repeal is unlikely, but players in the Nevada solar industry said just a phasedown of the 25D residential tax credit could impede their ability to offer affordable solar — or exist at all.

Hooten said it has empowered more Nevadans to choose solar, and a phasedown, cancellation or shrinking of the credit could increase energy bills and — critically — lead to a downturn in solar industry capacity, potentially forcing companies to close up shop. 

That’s particularly concerning for Nevada’s Solar for All program. The Nevada Clean Energy Fund (NCEF) received a federal grant of $156 million from the IRA to provide rebates and financing for low-income Nevadans installing rooftop solar on single-family homes, multifamily housing or through community solar projects. The program is set up to reduce low-income Nevadans’ energy bills; to qualify, any Solar for All-funded project has to result in a minimum of 20 percent household savings on energy.

But for the program to work, there needs to be a robust solar industry. 

The 48E and 25D tax credits are providing 30 percent of the capital stack for Solar for All; without them, it would be difficult for NCEF’s state and local partners to replace that financing. NCEF CEO Kirsten Stasio projected that the Solar for All program’s impact would be reduced by a third if those credits are cancelled or if rules are changed to prohibit direct payment.

“​​If you don't have the tax credits to allow the companies to continue to exist and sell to low-hanging fruit, there's no companies that are going to be around to actually figure out the Solar For All requirements,” said Freedom Forever policy director Ben Airth.