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How to Make Distributed Solar Projects Pencil without the Federal Tax Credit

by Elisa Wood

distributed solar
Andrey_Popov/Shutterstock.com
April 18, 2025
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As uncertainty looms over the future of the federal Investment Tax Credit (ITC), many in the distributed solar sector are concerned about how to keep solar and storage projects economically viable.

Gareth Evans, CEO of VECKTA, decided to look beyond the noise and the worry and instead do some number crunching. He examined commercial projects installing solar and batteries and asked the question, “Can solar projects still be profitable — and create customer savings — if the tax credit goes away?”

What he found might surprise some people. The answer is yes. Distributed solar can still offer an impressive return without the tax credit. But it requires some rethinking about how projects are structured.

In the latest Energy Changemakers podcast, Gareth explains how to make a solar project pencil if the tax credit disappears.

It was good to hear a positive message about distributed energy at a time when much of the news centers on economic uncertainty, threats to the Inflation Reduction Act, and the negative impact of trade tariffs.

“The reality is the grid is completely broken. It’s under-invested in – we cannot get energy to where it’s needed, especially in a period of increasing demand. The only way for businesses to manage their costs, to operate without any impacts and reduce their emissions is with onsite energy systems. And so, even if the IRA disappeared tomorrow, the market is massive. So I’m hugely optimistic.”

Gareth Evans, VECKTA

Podcast Key Topics & Highlights:

• [00:00–03:00] Introduction to the Investment Tax Credit (ITC) and why it’s on shaky ground

• [03:00–06:00] What VECKTA does: a SaaS platform and marketplace to de-risk and scale onsite energy

• [06:00–10:00] The IRA’s impact on distributed energy—how it shifted the global energy conversation

• [10:00–14:00] Real-world analysis: how project viability changes with and without the ITC

• [14:00–17:00] Why optimization—not just solar saturation—is the key to post-ITC success

• [17:00–20:00] What types of businesses are leading the charge (hint: it’s not who you’d expect)

• [20:00–25:00] Resilience vs. sustainability: changing motivations in a high-risk energy landscape

• [25:00–27:00] Quantifying resilience: how to prevent costly outages

• [27:00–29:00] The future of decentralized energy—why Gareth remains optimistic, ITC or not

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