On their small farm in Wahoo, Nebraska, Rhonda McClure and her husband toss a few pumpkins over the fence to a flock of ewes. They sell market lambs and wool, some of which Rhonda uses as a fiber artist, along with garden produce and compost.
She said they’ve always tried to use sustainable practices on their farm, including rotational grazing, geothermal energy and most recently — solar.
“The solar just fits in with trying to be as independent and careful of the environment as we can,” McClure said.
For the McClures, harnessing energy from the sun allows them to reduce their reliance on fossil fuels and keep their energy costs down over the long run.
A solar array they added in 2021 to help power their well and home reduced their summer energy bills from several hundred dollars per month to as low as $4, McClure said.
They added a solar battery this spring to release energy at night and act as a back-up during regional power outages.
“It’s provided a good deal of security for us to know that if we’re off grid for a while, if something happens, we can get by,” McClure said. “We have water and heat and the essential services here, for us and our livestock.”
Now they’re wrapping up another solar project, largely to provide air conditioning for a new outbuilding used to store and process wool, teach classes and host large groups of people.
McClure said they likely would have waited to install it next spring. But they bumped up the timeline when they found out the Residential Clean Energy Credit was rapidly expiring. Congress voted this summer to eliminate it at the end of 2025 through the One Big Beautiful Bill.
An incentive for home solar
The federal tax credit covers 30% of overall project costs for home solar, along with wind, geothermal, fuel cells and battery storage.
Some version of a residential solar tax credit has been around for decades with short-term extensions becoming the norm since President George W. Bush. But the 2022 Inflation Reduction Act under President Joe Biden kicked the deadline to 2032 for the full credit, followed by a rate phase down.
The Biden administration said the tax credit and two dozen others in the Inflation Reduction Act would “save families money on their energy bills and accelerate the deployment of clean energy, clean vehicles, clean buildings, and clean manufacturing.”
Over 752,000 households claimed the Residential Clean Energy Credit on their 2023 taxes. Incentive-driven consumer demand and market stability also supported growth in domestic solar manufacturing, according to the Solar Energy Industries Association.
The Residential Clean Energy Credit made solar more affordable for homeowners by lowering the upfront costs and shortening the amount of time before they recoup their initial investment, said Paul Cutting.
Cutting helps homeowners identify opportunities to improve their energy efficiency and pay for them as an energy auditor with Clean Energy Districts of Iowa. The affiliation includes 15 county-level organizations across eastern Iowa and one in Wisconsin.
The cost of installing solar depends largely on the size of the home, along with its location and overall electricity usage, Cutting said. The national average is $23,500, according to the nonprofit Center for Sustainable Energy, but some industry experts say some residential solar projects can exceed $40,000.
“The solar tax credit being funded at the full 30% makes it pretty enticing for a homeowner to move forward with that,” Cutting said.
But the One Big Beautiful Bill cut the tax credit deadline off at the end of the year instead of its original phase out starting in 2032. Homeowners working with contractors must have their systems installed and invoices paid by Dec. 31 to qualify.
“It's not simply calling your contractor out to swap out your furnace,” Cutting said. “It's coordinating with your utility to get permission and to get in the queue to be able then to move forward.”
A rush on solar
Cutting said solar installation companies in his region quickly booked up after President Donald Trump signed the bill into law in July.
That was the experience of StraightUp Solar, a company that designs and installs solar systems for homes, businesses, nonprofits and government agencies in Missouri and Illinois.
“We sold out in September, and many other solar companies were selling out in July, which means their entire build schedule was full for 2025 because people wanted to get in before the tax credit expired at the end of the year,” said Eric Schneider, director of business development for StraightUp Solar.
The company’s third quarter of 2025 was the second busiest for inquiries, said Schneider. The biggest spike was in 2022 when homeowners expected an earlier tax credit to sunset before the passage of the Inflation Reduction Act.
“We call it the ‘solar coaster’ in the industry because demand fluctuates up and down,” Schneider said. “Some of it's policy driven; some of it's interest rate driven.”
Despite the loss of the Residential Clean Energy Credit, Schneider remains optimistic about the coming year and the future of the industry at large.
The price of solar power has fallen dramatically in the last 15 years as panels have become more efficient, increasing its appeal to homeowners concerned about rising energy bills, Schneider said.
Cutting agreed.
“I imagine there's going to be a slowdown [in 2026], but I think solar at this point probably has a lot to stand on its own.” Cutting said.
Higher electricity rates
Inflation, higher demand, natural disasters and upgrades to aging infrastructure have driven up electricity rates across the U.S. in the last five years.
And they’re expected to continue their upward trajectory, in large part due to the acceleration of artificial intelligence. Projected growth in data centers and cryptocurrency mining could increase average electricity generation costs in the U.S. 8% by 2030, with some regions seeing increases as high as 25%, according to the Open Energy Outlook Initiative.
More utilities are also shifting to “time-of-use” or “time-of-day” pricing, which sets higher electricity rates during peak hours, typically late afternoon and evening on weekdays.
A homeowner with solar panels and a battery back-up can draw from their stored energy – rather than the grid – during peak hours to save money, Schneider said.
These customers are also insulated from future energy rate hikes, said Corey Ziemann, solar program coordinator for the Midwest Renewable Energy Association.
“If you're buying solar, you're essentially buying all the energy you're going to use from that system all at once. You're locking in that rate so you won't be subject to the increases that are coming,” Ziemann said.
The loss of the federal tax credit will likely stretch out the payback period for homeowners, Ziemann said. But another way to help make home solar more affordable is through “group buy” programs, which bring individuals from a community together to purchase in bulk.
The Midwest Renewable Energy Association’s Grow Solar team has facilitated more than 70 group buy programs in Iowa, Wisconsin, Illinois, Michigan, Minnesota and Missouri. An advisory committee made up of local stakeholders and officials review bids and vote on an installer to use.
![Alyssa and Nate Kahl from Grinnell, Iowa, participated in the Grow Solar Jasper + Poweshiek County program in 2025. "It made [solar] affordable, easy and will really help our budget for a long time,” they said in a press release from the Midwest Renewable Energy Association.](https://npr.brightspotcdn.com/dims4/default/d7c0d10/2147483647/strip/true/crop/1621x1080+0+0/resize/840x560!/format/webp/quality/90/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2F9d%2Fda%2Fa1001ef346999cd7bb3a59320714%2Fnathan-and-alyssa-kahl-with-new-solar-array-web.jpg)
Ziemann added that it’s cheaper for an installer to have crews working in a concentrated area.
“Typically, our group buys will be about 15%-18% below market rate, and then there can be additional discounts after that,” he said.
The association helped coordinate a group buy in eastern Iowa this fall, Ziemann said, which allowed over 30 homes and businesses in Jasper and Poweshiek counties to install solar.
Schneider with StraightUp Solar also sees potential with “Power Purchase Agreements” and lease programs, which he said his company and others have started to offer. Similar to leasing a car, Schneider said the homeowner uses the solar panels without owning them.
“You're getting all the benefits from the utility. You're getting the net metering; you're getting the low utility bill because you're getting solar energy directly to your house,” Schneider said.
The One Big Beautiful Bill allows companies that own the solar panels to take advantage of the commercial solar tax credit, which doesn’t expire until Dec. 31, 2027.
One of the downsides to leasing and power purchase agreements for homeowners are lower long-term savings compared to someone who owns their solar system and uses it for 20-30 years, Schneider said.
State carrots
Schneider and Ziemann said more state-level incentives could help accelerate the growth of residential solar.
They pointed to the Illinois Shines program as an example. Before adding solar, homeowners work with state-approved installation companies and other third parties to estimate how much electricity their panels will produce over 15 years. Each megawatt-hour of solar electricity is worth one “renewable energy credit.”
Electric utilities in Illinois buy renewable energy credits from the installation companies to comply with the state’s target of hitting 100% clean energy by 2050. In exchange, homeowners benefit from “reduced purchase prices, installation costs, lease payments, or other methods agreed upon in a contract,” according to a document from the Illinois Shines program.
Certasun, one of the approved vendors, said the Illinois Shines program can cut costs for homeowners up to 40%.
“We're looking at operating more programs in Illinois right now because they have great solar incentives,” Ziemann said.
He’s hopeful more state legislatures will consider adopting the model used in Illinois.
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.
