Former Sunnova CEO Calls End to Solar Tax Credits Un-American

Bloomberg

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00:00Two parts to this bill. One was demand and one was the supply, basically. Let's start with demand.

00:06Does this crush solar demand if you take away that 30% tax credit for residential solar?

00:13Well, yes, in a word, but it does more than that, unfortunately. It is patently un-American to take

00:19a tax credit away from a homeowner and taxpayer and give it to monopolies, which are the utilities.

00:26So with this bill, with the new revisions that happened late last night, you as a homeowner will

00:32not get the same tax credit, even though you pay a lot of taxes, as a monopoly, a utility will get

00:40the benefit of that tax credit. That is patently unfair and un-American. But to be fair, if I put

00:45solar panels in today, I still get that 30% tax credit. It's just the phase out of that 4% isn't

00:50there. No, this bill, these changes as written will allow that phase out to happen with monopolies,

00:58but not you as the individual homeowner and taxpayer. You will have to get your tax credit,

01:05even as phased out, through the monopoly or the utility. That is unfair. It doesn't make any sense

01:11and it needs to change. If we want to talk about American energy independence, the first place to

01:17start is you should have the independence to do with your own home what you want to do, and you

01:22shouldn't be disenfranchised by having tax credits, your taxpayer dollars going to monopolies

01:28instead of going back into your pocket. So, I mean, is there a way, though, for certain homeowners

01:33to maybe circumvent that? I know they're not going to get the tax credit directly, but it's a good point

01:37when you talk about this idea of sort of why a lot of people gravitated to some of these solar panels

01:42in the first place. It was a way to provide some separation between the traditional utilities or

01:47utility grid, if you will. What options are going to be left for those homeowners?

01:53Nothing. Zero. They're given nothing. When this phase out occurs, they will have no option,

02:02as opposed to utilities who will still be able to have for at least a few years the option to have

02:08solar tax credit and storage, by the way. And so solar and storage is really taking hold

02:14in the residential marketplace because consumers are looking for lower bills and higher reliability.

02:21They will have that option eliminated, and the tax credit will then go to the utility

02:27for the ascribed period of time, but not to the American homeowner and taxpayer. It's really a bad policy.

02:33Why did we end up with this policy, John? And I don't ask that to be flipped, but I am curious

02:39about the lobbying efforts in Washington and what presence your industry had down there

02:45when this was being considered and effectively being written into this bill.

02:50Well, I think it's pretty clear, you know, follow the money. And if the utilities are benefiting

02:54from this, then who do you think put forth this idea that's a terrible idea? Probably the utilities.

03:00Now, I don't know that for a fact, but I think that just goes with common sense.

03:05And so what we need to do, if we just looked at this and said, however you want to phase out the

03:09tax credit, the solar and storage investment tax credit, however you want to do that, make it fair.

03:15Level the playing field, because we're already at an unlevel playing field with monopolies that

03:20the utilities, make it fair. Whatever happens to utilities happens to the American

03:24homeowner and taxpayer, period. This is not a difficult concept.

03:28From what I understand, though, it's not that the credits transfer directly to the utilities,

03:32but that the commercial solar panels still get the tax credit, whereas residential solar panels do not.

03:39That doesn't feel like it's just, you know, moving it to utilities, though. What am I getting wrong here?

03:44Well, because that would mean what the language change was, you know, first of all, in the first draft,

03:50you as a homeowner, you could write a check or get a loan, and you can today be able to get that

03:56tax credit, correct? And so that was eliminated in the first draft. In the second draft, what they did

04:01was take away even the ability for a commercial company like Sunova, like Sunrun, to offer solar

04:08panels and batteries on your home under a lease or power purchase agreement structure. They took that

04:12away, too. So the utilities, either directly through construction of solar farms and hopefully batteries,

04:21they got in wind farms or indirectly as they buy the projects or buy the power from the projects

04:26are the ones benefiting for the American taxpayer dollars. I see. Not the direct taxpayer, the direct

04:32homeowner. That was the change last night. That is why the stocks are down so much with regards to

04:38residential solar. So, John, do those companies go out of business? I mean, we know that Sunova was

04:44already struggling, right? I mean, through high rates, weak demand, high debt, all the stuff. Do

04:49these companies now legit go out of business? Yes. If you've tilted the level playing field, which

04:57it wasn't level to begin with, right, we need to have consumer choice. Instead of just Houston,

05:03Dallas, and Texas, we need to have it spread everywhere. We have new technologies with solar and

05:08batteries and load management, electric vehicles. We need to break up the monopolies and allow this

05:13consumer choice to happen, just like you could do in continental Europe, United Kingdom, Japan and

05:18Australia. We need to catch up. We need to update the regulations. They didn't do that. They even went

05:23further than that and untilted the playing field even further and gave a tax credit, taxpayer money,

05:30American taxpayer money, to utilities, directly or indirectly, and then disenfranchised homeowners.

05:36Will the residential companies, solar companies and storage companies, will they go out of

05:42business? Most likely so, yes.

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