Harmon Solar Podcast
The solar energy sector in Arizona is currently oversaturated, which has led to a scarcity of transparency. In response, we've created a podcast to provide an honest perspective on going solar in the state. Join us as we explore the intricacies of utilities, equipment, processes, and more. Our primary objective is to educate and empower you to make informed decisions on your solar journey.
Harmon Solar Podcast
Let's Talk Some Breaking News: ITC Update
In this breaking news episode, we dive into the just-signed energy bill that eliminates this significant financial incentive for homeowners after December 31, 2025. We unpack what this means for different types of solar customers. While those considering leases can breathe easy (that tax credit continues through 2027), cash buyers and those planning to finance their systems face a rapidly closing window of opportunity. Beyond consumer impacts, we examine how this transition will reshape the solar industry itself.
The solar energy market has become increasingly saturated, leading to widespread misinformation and a lack of transparency. Welcome to the HarmanSolar podcast, offering a straightforward, honest perspective on going solar. Each episode dives into key topics to help you better understand the industry. Our goal is to educate and empower you to make informed decisions about solar energy. While solar may not be the right fit for everyone, we believe everyone should take the time to explore it. Our mission is to increase your knowledge, not your bills.
Speaker 2:Welcome to another edition of the Harman Solar Podcast. I'm Ralph Romano, vp of Sales and Marketing at Harman Solar. With me is my co-host, ben Walschlager. You guys know him as Mr Everything. Ben, mr Everything, how are you Good?
Speaker 3:Good, I'm seeing way too much of you lately and we're going to have to stop. I can tell because you're dressing like me now with a black shirt and the blue jeans. Last podcast you were like t-shirt and shorts guy. Now you're.
Speaker 2:I do.
Speaker 3:I have a black color yeah, black polo shirt blue jeans and the leg crossed like mine.
Speaker 2:Perfect, welcome to our show. Okay, so this is going to be a little different kind of podcast. We wanted to to do this quickly and get this out there because, uh, we're sitting here right now.
Speaker 3:Today is july what is july 8th right?
Speaker 2:and so, uh, the white house's big, beautiful bill passed, uh, last week and was signed into law on the fourth. So we so we thought what's a better time than to come out right now and say, hey, here's what this means? There's a lot of information out there a lot of it's misinformation always. So we want to just set it straight and say this is what this means and this is how this impacts the industry and how it impacts you if you want to go solar.
Speaker 3:Yeah, it's not really a podcast, it's more of like a breaking news. You want to go solar? Yeah, it's not really a podcast, it's more of like a breaking news. It's an info cast info cast.
Speaker 2:Yeah right, a breaking news info cast right, yeah, we can't afford sound effects so let's go back to what happened.
Speaker 2:So the federal government passed this new energy bill um, it has a lot of things in it, but we're going to focus on the green energy stuff, right. So we could talk about real, real quick ev. If you want to talk about ev real quick, what this means and it has a lot of things in it, but we're going to focus on the green energy stuff, right. So we could talk about real quick EV. If you want to talk about EV real quick, what this means to EV, since we know we have customers that are EV people. The $7,500 tax credit for EV is going away on September 30th. I believe that's the last day of that. So if you're looking to buy an EV and you want to take advantage of that $7,500, you might want to do it soon, before September, before September 30th.
Speaker 3:It's not a step down either, it's a gone.
Speaker 2:Gone and there are some places out there that you can look and they do used EVs. All they do is sell EVs and for cars that are under $25,000, they can actually do a tax credit for $4,000, which is kind of cool because you're basically buying a car for 21 grand or 20 grand. It makes it very affordable to get into EVs the first time. I know that EVautocom is a guy that I really like online. If you haven't seen his stuff, he's really into the EV side and he's really fair. He reminds me so much of Harmon Solar the way he runs his business, but you can go check him. He does all that stuff. But as of September 30th that'll be the cut. So the EV industry will change on October 1st.
Speaker 3:That's right. I don't know how it'll change, but it will change. It'll be more expensive. Yeah, it'll be more expensive. I'm sure you'll probably see. I don't know if you'll see less You'll see more About the same, I'm sure, again, every comes in to play. It's really a gut check for companies of who's going to last and who isn't going to last, because policies make a change, companies make a change and they make a change and they just keep going back and forth.
Speaker 2:So you know we'll see, we have both been doing this for many years.
Speaker 2:This is my 13th year. This is your 11th or 12th year and we have seen this industry change many times and we have heard the people come out and go solar is dead. It's going to die when this happens. And here we are. It doesn't change. Solar adopts and this will now adopt. So let's look at, on the solar side, what has changed, because we're going to talk about what's changed and what's the same, and then we'll talk about the impacts of that change and what it means to you if you're looking to go solar. So what's changed? There's something called Section 25D in the bill. It's customer-owned systems. So if you're going to buy a system cash, if you're going to finance a system through a finance company, this applies to you. There will no longer be a 30% tax credit federal tax credit after December 31st 2025. So the end of this year, that 30% tax credit that's been around now for a while is going away at the end of this year, yep.
Speaker 3:And we have a whole podcast on what the tax credits are, who calls for them, how to get them and all that stuff. So watch that episode if we won't really get into that, but there's no phase out of this.
Speaker 2:Like in the previous years, we've done phase downs and stuff like that and then they came back. This is a hard stop. Technically, projects must be fully installed and commissioned before this date.
Speaker 2:Again, gray area you talk to your tax guy, you figure that out. That's how people are perceiving it. Some people are saying it just has to be installed. Some people are saying install the commission. Commission means that the utility turned it on. Some people are going to say well installed and green tagged by the jurisdiction. It's you and your tax guy will figure that out.
Speaker 3:I say play it safe. Plan on system fully installed, turned on and ready to go, already producing what it should be producing by the end of the year.
Speaker 2:Don't risk it, I'm not going to take my opinion. Yeah, okay.
Speaker 3:Because you know you're going to get those salespeople who are like, oh, you just need to sign by December 31st, Sign the deadline on New Year's Eve and you'll be fine. You don't want to go down that road of am I getting the credit, Am I not getting the credit? So rather be safe than sorry. I I would say, if you are looking to do it, do it now, Do it before it gets crazy. Yeah, and we're going to talk about why in a second.
Speaker 2:So that's the big change in the industry, right? That's a huge change. It's time for the industry to stand on its own two feet without this tax credit.
Speaker 2:And that will create a lot of effects. We think and we'll talk about that what's staying the same technically. So part of this bill was Section 48E as well, which basically covers leases in Arizona and PPAs in other states. There's like four states that do leases, I think Arizona, Florida I can't remember if there are two and then the rest of the states I think 46 of them do PPEs or PPAs, which is basically like a lease Kind of you have a system on a roof that you don't own and you just buy the power. You're just buying the power of whatever it produces every month. Right, that's a PPA. We don't do that in Arizona. It's actually illegal in the state. We have leases in the state, but both of them are considered on the commercial side. Commercial leasing because a third-party operator owns that system, Some big company owns that system and they take the tax credit and all that stuff Right, that's the biggest takeaway is who's owning.
Speaker 2:So the lease PPA scenario on Section 48E it was determined that that will stay in place, so through December 31st of 2027,. There's some other rules around it with safe harboring equipment and all this stuff we don't need to get into, but it just means for right now we know it'll be available through the end of 27 to have a lease. So we will continue to sell residential leases through leasing companies, like we do today, through at least the end of 27 and we'll see what happens then. So that's good news for the industry because we didn't lose the ability to provide leasing, and leasing is. I have a lease on my house. I love my lease. Leasing is a great opportunity as well. So you're not thinking about a tax credit anymore.
Speaker 2:So you know, it's you want to go solar, probably one of the cheapest ways to go will be leasing. Yeah.
Speaker 3:And I know we've done podcasts before with purchasing, leasing, and we hear those sales companies like oh, leasing's bad, leasing's bad. Well, guess what? They're all going to say leasing's good, leasing's good, leasing's good, Like no, you just depends on you and your situation and what's going on and your tax credits and liability and things like that. So again, it all depends on you.
Speaker 2:So if you're a leasing customer and that's what you want to do you're in good shape. You have nothing to worry about for at least the next couple of years. Business as usual, Okay For you. You're a cash customer. You're a finance customer? This is where it gets different, Okay. So I've talked to some of the finance companies for those of you that want to finance, and with the word that I'm hearing is that they're obviously they're not going out of business. I can see probably some of them starting off releases that don't. I think that's going to happen. Sure, We'll see down the road, but I am hearing that a lot of them will stop offering a product that has the 30% tax credit re-amortization function of it. That's probably going to go away sooner than later.
Speaker 2:That won't go away on the 31st of December. I can see that going away in the next 60 days. That's my opinion. From what I'm hearing, which would make sense by the end of August-ish is when they'll probably start pulling that product because they've got to be concerned that make sure that the system gets installed by the end of the year and commissioned or whatever, depending on your opinion. And what they don't want to happen is they sell a system in October, november, it doesn't get installed and done and now you walk away and they're left holding the bag right.
Speaker 2:They're not going to put that kind of risk on them. So we'll see those solar loans, as we call them, probably start to disappear, I think around September 1. That's my guess.
Speaker 3:Which would make sense.
Speaker 2:That's not law, that's not solid. You heard it here, folks, ralph Romano told you. I'm giving you my guess. It's just my guess from what I've heard. So you, I'm giving you my guess. It's just my guess. Yeah, from what I've heard. So that is interesting. Um, also, you have to assume that there's going to be a national rush for people that want to buy your finance to make this happen. Yeah, it's gonna be the gold rush. We've already seen a tiny tick in a matter of two days, small tick, but I expect that tick to get bigger. With that said, there is now a line that you must stand in. Yep, the utilities for everything that happens. Right, because once you go solar and we get going, there's an entire process that typically takes about 60 days. Sometimes longer than that 75, 90 days, typically, depending on what jurisdiction you're in, what your system is involved with, if we have to get an input from a utility, there's all these factors that can delay a system. So now you're in this line and the line is going to grow every day.
Speaker 3:Yeah, and that's a key takeaway. You get all these other solar companies who say like, oh, we do fast installs, we do that. Well, yeah, so do we. We can go install it tomorrow if we wanted to. But we have a lot of red tape that we have to go through, a lot of jurisdictions. There's a process that you have to go through, right, so you're just getting in line with that process with all those outside sources now, and that line, like Ralph said, is just going to get longer and longer and longer because there's more and more people. We saw the same thing a few years ago when APS was doing away with net metering.
Speaker 2:Yes, there was just a huge long line. It took forever for systems to get commissioned because that scare it was going away. So that line got longer. Here's a different thing that's happening because of all this into what you just said. So, yeah, we've been through this a couple of times right.
Speaker 2:In Arizona in APS, just in areas right, like when APS net metering went away and things like that. It was crazy. Remember it was nuts, we were taking orders, like when APS net metering went away and things like that. It was crazy. Remember it was nuts, we were taking orders. This is national, yes. So here's where my fear comes in for you as the consumer. Supply Equipment. This is not just Arizona, one section going through this, this is the country going through this, which means that a lot of people have the same idea you do. They want to go solar and they're all going to move. Yep Equipment is going to. I think number one is going to go up in price because when there's demand yep Supply and demand right Supply and demand theory.
Speaker 2:I think it could go up. We'll see Right as of right now. That hasn't happened yet, but I'm hearing little rumors.
Speaker 3:So thement can get more expensive.
Speaker 2:Number one. Number two the equipment can all of a sudden not be there, it's not available because it's all sold.
Speaker 2:My point is the longer you wait and we don't ever do this, we don't ever talk about you've got to make a decision now, that's not who we are Right, but the situation dictates that you need to make a decision kind of quick, yeah, because if you don't, you put yourself in a position to purchase something that you well, you think you purchased. Something that's not going to get installed in time and you're going to lose the credit.
Speaker 3:Yeah, I didn't even think about equipment. We saw kind of a scare with equipment not too long ago During COVID the 400-amp service panels People had to wait a year, year and a half to get them just because supply.
Speaker 2:People had to wait a year, year and a half to get them just because supply we had. Covid supply issues. I think everybody did in a lot of industries right. Everyone did. But I think we're going to see that potentially happen in this industry right now, in the next few months.
Speaker 3:Sure, everyone's going to want panels, everyone's going to want inverters.
Speaker 2:Right. So this is not pressure sales. This is just factual sales. If you want to do this, you need to do it now. You need to make a decision here in the next 30 days. The longer you wait, the more jeopardy you put yourself into getting this actually done. That's all I'm trying to say, and I will say this. We have a podcast coming out. We're bumping this ahead of it. We have a podcast coming out about deceptive sales tactics that I think you're going to. It's phenomenal. I love it. Um, it just got finished. Um, you're going to see, once we hit the last quarter of this year, you're going to have some sales companies and you're going to have some installers that are going to sit there and say we'll get it installed in time.
Speaker 2:Yeah, and they're going to take your deposit and they're going to and they're going to try to push you. I'm telling you right now be real careful, because it's not going to be a quick process as we get into Q4, because everyone's going to be backed up. Remember, that line is going to get bigger and bigger. This is like going to Disneyland trying to get on the Matterhorn it's a three hour wait right now. It's going to be a four hour wait next week, a five hour wait the week after that, and go and go and go. So there's going to be companies out there trying to tell you it's okay, we can do this. And I'm telling you right now we can Be weary of that. No, you can't.
Speaker 2:And we're going to talk more about that as the time passes, because we're going to try to protect you guys, right, but that's a critical point. I already know it. I see it coming. Yeah, guaranteed, all right. So what's the bottom line here? The bottom line is you better do something now if you want to do this and you're going to pay cash or you're going to finance, and that 30% tax credit is important.
Speaker 3:I think the main takeaway, too, is it's time to make a decision. You do get those people who are kind of like I'm on the fence, I don't know if I want to do this. I would say make that decision, whether you do it or don't. If you're going to say no, don't do it well then don't do it. But if you're on the fence, don't be on the fence anymore, right? Because that's going to hurt you. Make your decision.
Speaker 2:If you're a cash customer or if you want somebody that wants to finance, then I think, yes, this is what we're talking about. Right, you had a conversation with a customer today that said I've been waiting. Now it happened. I think I'm good bit longer like oh if you're watching this podcast, I don't know who you are. September 1st, in my opinion, is too late that's my opinion I don't you're gonna.
Speaker 3:Really. I have no idea how long that line's gonna be then, but yeah, you're gonna be cutting it really close.
Speaker 2:Yeah, that's all I'm gonna say.
Speaker 3:So be be wary of that um but as far as, like your savings go. So people are. You know this big scare tactic it's gonna hurt the industry and solar is going to go away, there's no more savings I tell. I'm telling people that, yes, you know that that tax credit, with it going away, does kind of hurt your return on investment or your savings, but it's still there.
Speaker 2:Oh yeah.
Speaker 3:You know we have a finance company where they show you the loan payment kind of reversed. You know a lot of loan companies will show you the lowest payment and then when it re-amortizes it'll stay that way. But we have a finance partner where it shows you the worst-case scenario first, this is your highest payment and even then on those proposals, it's saving money.
Speaker 3:It's not as great as if, obviously, the payment was lower, but it's still saving money. And then you also have to think about, well, utility rates are still going to increase. Aps is trying to get a 14% increase as we speak. Yeah, so you know, you getting locked in with your, with your monthly payment, for, you know, 25 years, if you're financing it or you're, you know, doing your lease is still good, because utility rates are still going to increase um over time. Yes, so the savings is there, it's just not going to be as great. I always tell people I'm in the I told you so industry. Yeah, you know, if you get solar 10 years ago, those people are sitting pretty and then like, oh, I want to wait a year. Okay, well, come back and I'll say I told you, so things have changed. Yeah, next year I'll tell people I told you, so things have changed again.
Speaker 2:Yeah, so, and here's some things that are going to change, so financing will change. Um, I think financing you'll see obviously is non-solar financing. I think you'll see different lenders that aren't in solar right now get into the business. I've already heard about a few lenders that are wanting to come into this industry. That never came in because they didn't like the whole re-amortization and the solar side the ITC side of it. They're looking at traditional loans right.
Speaker 2:So you're going to see more traditional loans. You're going to see, right now you have these low interest, high fee loans. I think that's going to change. I think the industry has to adjust right. The industry lost a 30% tax credit and I think what you'll see when all the dust settles is lower fees on loans. You might then start seeing equipment pricing come down a little bit. There'll be gains in other places. Sure, I think one of the biggest things that you'll see will be dealers. So we've talked about this in the past with these sales and marketing dealers that are out there. They just sell solar and they hook up with somebody like us to install it, and they have to do that for a price. Obviously, getting leads is a price. Knocking doors is a price. Commission, they have to make commission right.
Speaker 2:And so I think what's happened with this outside of a lease is their commission ability has gone from here, will go down to here, Right. So I think a lot of those people that are used to saying hey, we talked about it in our next episode about deceptive tactics, Solar is this cash grab and they can make a ton of money in it.
Speaker 3:I made 20 grand this week.
Speaker 2:Guys that are making 60 grand a month. Yeah, it kind of goes away, right it does. So this kind of helps the industry a little bit. It kind of gets rid of some of these deceptive people that were out there giving us all a bad name. So I'm not upset that this happened, that's true. I think it actually helps a company like ours because it's going to get some of those people out of the industry. Yeah, so it's not a bad thing, it's really not, and we're going to be focused on finding those sweet spots to offer you solar as well, if you're going to cash or finance. So we'll always have a good offer to you. Always we have a good offer. Today, we'll have a great offer to you after this is all said and done, what you'll need to be careful is leasing right. Leasing is a great tool. I love leasing, but a lot of these dealers that will try to survive, I mean, they're going to go out there and all they're going to have is leases and you know, just watch escalators and other things.
Speaker 2:We'll probably have a lease podcast where we'll break down at least how it really works. I know we've kind of done that, but I think we'll focus more on that after that dust settles for this.
Speaker 3:Yeah, because as the industry will change, we're going to be more about it and I think what is also going to happen is you're going to have those, um, those smaller companies who aren't well diversified. Unfortunately, they might go under, just because I think they will. That this is what they relied on. They only relied on residential solar sales, and right that you know obviously the strong will survive, only the strong will survive.
Speaker 3:So then you have all those customers who have solar on their home and they go. Where do they go? Right, you know, we'll still be here. We're very diversified. We have a service department, so I think you see a lot of those smaller companies going away and now you need homeowners who have solar, who need a new home to service their system.
Speaker 2:So again, we are not dependent on residential solar. That's not our whole business. A lot of companies that's their whole business. That's why Harman's been around for 50 years, Right? So that's a big deal. And still, residential solar is going to be a good piece of business for us. It's not going to change. We're not upset that this happened. It's funny.
Speaker 3:You know you have people that are flipping out about it.
Speaker 2:We're like I think it's a good thing.
Speaker 3:It's got its pros and cons to it.
Speaker 2:We'll be all right, though it's got its pros and and. If you're outside of Arizona, I mean. So there's other states again where they have other incentives. They still have the SRECs, they still have township incentives, they have utility incentives. So you need to look at the different areas where you live and see what's still going to be in play. Yeah, you may have lost the ITC, but you still have other stuff that makes it really doable. So solar's not going anywhere. Solar's still really viable. I know there's programs in Texas alone that are fantastic for solar and will be even after this all passes. So no, there's some really good programs out there.
Speaker 3:Yeah, and, like I said earlier, it's going to be kind of a gold rush. But I think that's an important question to ask your solar company. If you're going to quote Again we've mentioned it many times we don't really care if you go with us or not. We're going to be here, we're going to be just fine. We would prefer that you go with a legitimate company. But if you are at the table and you're talking to your sales rep, ask them how long they've been in business. Yeah, because in the next couple of months it's going to change dramatically. Be more aware of that now than ever before. Right, if they said, oh, hasn't been around that long?
Speaker 2:it's like when we post our, we have two podcasts right now sitting in queue to get out to you guys we're gonna be coming out soon but when we post one of them, where we talk to neil our buddy neil and you guys will see what that's about. He talked about that. Yeah, you got to look and see how long have these people been around? Yeah, have they been around as? Long as the warranties are promising.
Speaker 3:Yeah, If they haven't you better think twice. Right, right, we have. So, yeah, with the tax credits going away, you know there's a company might go under. You have that 20, 25 year labor warranty with that company. Yep, and they have only been around for a couple of years.
Speaker 2:Yep and so, hey, that's really what we wanted to talk about today. There's not a lot more to talk about for this episode. Or it's important to you, then you would need to make a decision quickly. If it doesn't matter to you and that doesn't do anything for you, then you don't have to worry about it. You can just keep going the path you were going down, because, again, leasing will be available, solar will be available. It's still a purchase if you need it, so don't worry about that.
Speaker 2:If you want to discuss more, reach out to us on Comment below, email us, call us, we're here, we'll talk about it, just like we had one of our listeners, one of our viewers, who called both of us yesterday I think it was yeah who wants to go solar, and he trusts us and he watches our podcast and he knows that we're going to give it to you guys straight. So we really appreciate that. That's a big deal to us to hear in you. To go solar that's, that's cool.
Speaker 1:We're here for that and we'll do it for you If you go with somebody else.
Speaker 2:Like Ben said, we're here for you as well, to kind of walk you through that if you have questions. So that's it for this episode. I know this is a short one, but we just wanted to get this out there very quickly. Thanks as always. Thanks always for joining us. We will come back soon with the next episode, the next real big episode we're seeing. We've got a couple of things that we're working on right now, so we'll see you again soon. That's it. Talk to you soon. Bye.
Speaker 1:You've been listening to the Harmon Solar Podcast, with Ben and Ralph bringing clarity to the intersection of solar power and smart home ownership. If you found this episode helpful, don't forget to like, comment and subscribe, and also share the show with others navigating the solar journey. For questions and topic suggestions, call 800-281-3189 or visit harmandsolarcom. You can also connect with the team on social media. See you next episode.
