Tumult in residential solar

25 snips

Jul 10, 2025

In this discussion, Julien Dumoulin-Smith, who leads clean energy equity research at Jeffries, sheds light on the challenges facing residential solar. He examines the implications of the One Big Beautiful Bill, particularly how phasing out tax credits will influence the market. Julien highlights the struggles posed by high interest rates and debt burdens that have led several companies to bankruptcy. He also predicts that leasing will favor larger companies over smaller installers, while energy price hikes might reshape demand in the coming years.

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INSIGHT

Interest Rates and Competition Hurt Resi Solar

The rise in interest rates and net metering cuts drove down residential solar demand and profitability.
Competition prevented companies from passing costs to consumers, worsening financial pressures.

INSIGHT

Leverage Limits Resi Solar Resilience

Leverage limited residential solar companies' ability to weather rising costs and forced bankruptcies.
Refinancing struggles combined with fierce competition made maintaining financial health difficult.

INSIGHT

OBBB Shifts Tax Credits to Leasing Firms

The One Big Beautiful Bill (OBBB) ends tax credits for homeowner-owned solar after 2025.
Leasing companies retain credits through 2027, shifting market power toward third-party owned solar.

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Residential solar has had a rough couple of years. In 2024, the market contracted 31% and major companies like Sunpower and Titan went bankrupt. Now, only halfway through 2025, Sunnova and Mosaic have filed for bankruptcy, too. The market has suffered from low demand, high interest rates, and major policy changes like California’s cuts to net metering.

So now that the One Big Beautiful Bill phases out key tax credits, what’s next for the battered industry?

In this episode, Shayle talks with Julien Dumoulin-Smith, who leads equity research for power, utilities, and clean energy at Jefferies. Shayle and Julien cover topics like:

Why the IRA eased — but didn’t solve — the troubled market’s key challenges, like high interest rates, tax equity challenges, and intense competition

How debt prevented companies from weathering rising input costs

How the final version of the One Big Beautiful Bill avoided the worst case scenarios for residential solar

Whether the bill will impact utility or residential solar more

How the shift toward leasing will benefit larger companies over small, local installers

The impact of rising electricity prices

Resources:

Latitude Media: Sunnova’s debt problem

Latitude Media: Is residential solar poised for a comeback?

Open Circuit: Does residential solar have a bad product?

Catalyst: Could VPPs save rooftop solar?

Latitude Media: SunPower is bankrupt. Competitors see opportunity

Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor.

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