Federal Policy Update: Tax Credit Cuts and Alternative Solutions

1.Early termination of the residential solar tax credit

The "One Big Beautiful Bill Act" signed on July 4th abolished the 30% residential solar investment tax credit (ITC) in the original "Inflation Reduction Act", which was originally scheduled to last until 2032. Now it has been adjusted to:

• The rooftop solar project must be completed and put into operation by December 31, 2025 in order to be eligible for the tax credit.

• The 30% ITC for battery energy storage systems (BESS) has been retained and the validity period has been extended to 2033.

2.Energy-saving renovation subsidy alternative approach

The family energy tax credits (such as for heat pumps and window upgrades) will expire by the end of 2025, but both types of subsidies are still available.

• HEAR/HOMES Program: For low- and middle-income families, it offers a maximum subsidy of $14,000 to cover the cost of electrification renovations such as heat pumps and induction cookers.

• Energy Efficiency Home Improvement Credit: Maintain a 30% cost credit (up to $2,000 for heat pumps / water heaters, and $1,200 for other upgrades)

State-level initiative: Funding support for educational institutions and commercial buildings

1.Maryland: $17 million public school decarbonization plan

Funding allocation: On August 7th, it was announced that 30 projects in 11 school districts would be supported, with the key areas including:

• Heat pump replacement: For example, in the Park Heights Academy of Baltimore, ground-source heat pumps were used to replace the fuel-based HVAC system (costing $2 million)

• Building Automation System: Anne Arundel County's Corkran High School Receives $1.25 Million for Intelligent Control Installation

• Photovoltaic integration: Wicomico County Primary School installs 365kW rooftop photovoltaic system (worth 1 million US dollars)

2.New Jersey: Commercial Real Estate Clean Energy Financing Program (C-PACE)

Open application: On August 8th, the "Garden State C-PACE Program" will be launched, allowing commercial real estate owners to repay energy efficiency upgrade loans through additional property tax fees. Coverage includes:

• Energy efficiency improvement, renewable energy, resilience enhancement (such as energy storage systems)

• Financing ratio: Up to 100% for renovation projects, and 35% for new construction projects.

Technical Trends and Market Opportunities

1.Heat pumps and building automation become the focus.

• Both Maryland and New York State (NYSERDA) have designated heat pumps as key funding technologies, replacing traditional gas/fuel systems.

• The building automation system (BAS) has received special support (such as a $1.25 million project in Maryland), with the demand concentrated in schools and public buildings.

2.Energy storage and intelligent management systems are favored by the high-end market.

• The luxury housing market is accelerating the integration of photovoltaic + energy storage + energy management apps (such as the Savant system), enabling load monitoring and remote control.

• The federal renewable energy storage ITC (at 30% for the period until 2033) will be implemented to encourage the deployment of storage facilities by industrial and commercial users.