New federal tax and energy policies are expected to hinder Oregon’s solar industry, which has repeatedly butted heads with agriculture over farmland conversion.
The industry is accustomed to the “solar coaster” of rising and falling government incentives, but it’s now preparing for a “cliff” as federal tax credits expire sooner than expected, experts said during recent legislative hearings.
“We worry about projects that now are not going to be able to make that deadline. Now, they have to reconsider, is this project even going to pencil out financially?” said Angela Crowley-Koch, executive director of the Oregon Solar and Storage Industries Association. “So, we’re very concerned about what commercial solar and utility-scale solar will look like after these deadlines.”
Under the “One Big Beautiful Bill” enacted this past summer, to qualify for federal tax credits equal to 30% of their costs solar developers must finish projects by the end of 2027  — five years ahead of schedule.
Not only are financial incentives going away, but the Trump administration has implemented numerous executive orders that collectively discourage the development of solar energy, experts say.
For example, developers will have to show their supply chains don’t rely on components from China and other adversarial countries and must obtain the personal approval of Interior Secretary Doug Burgum to move forward with construction on federal property.
These policies are collectively having a “massive chilling effect” on solar and renewable energy projects, most of which require some type of federal authorization that’s now unlikely to be forthcoming, said Nicole Hughes, executive director of the Renewable Northwest nonprofit.
“Those agencies are just not answering the phone. They’re not processing those permits,” she said.
For agriculture, the impediments facing solar development are a double-edged sword.
On one hand, farmers who lease their properties to solar developers are able to diversify their incomes.
On the other, solar projects on Oregon farmland and rangeland have encountered vigorous opposition from neighbors, who argue they’ll disrupt surrounding agricultural practices and displace crop and livestock production.
Experts say that Oregon already has a reputation for solar siting difficulties, which will likely be exacerbated by new federal policies.
Meanwhile, many solar projects that have already been permitted may still not be able to take advantage of tax credits because the necessary transmission infrastructure won’t be ready for years, experts say.
Solar and wind projects are still relatively affordable compared to other utility-scale facilities, even without financial incentives, but federal policies that disfavor renewable energy may prove a more stubborn obstacle, said Hughes of Renewable Northwest.
“I don’t think the loss of these tax credits are as a big of a deal to our industry as these executive orders are,” she said.
Regardless of the conflicts between agriculture and solar development, experts say recent federal barriers may hamper Oregon’s ability to keep up with rising electricity demands.
“If these projects aren’t able to be built, we’re going to have a real reliability problem here in the region,” Hughes said.
Apart from the impact on utility-scale solar facilities, federal policies are also expected to inhibit the type of rooftop installations that haven’t been as controversial.
The 30% federal tax credit for residential solar projects is expiring even sooner, requiring panels to be installed by the end of 2025, rather than in 2035 as under previous law.
The federal government has also canceled “Solar for All” grants totaling nearly $87 million that were aimed at installations for families with modest incomes, but the state government is challenging that decision, arguing the funds were already obligated and cannot be withdrawn.
The potential long-term effects are likely to be “truly devastating” for Oregon solar businesses, but in the near term, they are causing “chaos in the market” as homeowners rush to install solar panels before the end of the year, said Crowley-Koch of OSSIA.
The short-term boom has only added to the uncertainty for solar companies, who are hesitating to create new positions knowing they’ll soon be unnecessary, said John Grieser, owner of Elemental Energy, a Portland-area installer.
“It’d be very easy for me to take this demand and hire two, three, four more crews, but that kind of whiplash is not sustainable,” he said. “It’s not fair to families, it’s not fair to my employees, because those will be jobs that are lost January 1st.”
Solar advocates asked lawmakers to assure a “soft landing” for the industry by extending state-funded programs to mitigate the loss of federal dollars.
Lawmakers were also urged to streamline permitting requirements and expedite utility-scale solar projects, improving their chances of qualifying for the federal tax credit before the end of 2027.
“Facility siting and permitting remains a critical barrier, especially for solar energy,” according to Max Yoklic, attorney for NewSun Energy, a solar developer. “Although the state has taken minor, step-wise actions to address permitting barriers, a broader and more permissive approach is vital to getting projects to the start of construction in the near term.”
During recent legislative hearings, some Democratic lawmakers lamented the Trump administration’s aversion to solar development, arguing it adds to electricity output regardless of other political considerations.
Sen. Janeen Sollman, D-Hillsboro, said she was “extremely disappointed” with the federal government’s “disheartening” policy changes,
“Even if you’re not looking at the climate side of it, right? It’s rising costs,” she said.
Some Republican lawmakers said they’re not personally opposed to solar and renewable energy but defended the Trump administration’s decisions, as it’s time for these technologies stand on their on legs financially.
“It should be a viable market, where it’s market-based and driven,” said Sen. David Brock Smith, R-Port Orford. “I mean, it shouldn’t need subsidies to be successful.”