Disseminated on behalf of SolarBank Corporation
The U.S. House of Representatives proposes rollbacks to key clean energy programs, which raises questions across the sector. Among the targeted provisions are the residential solar tax credit and funding elements of the Inflation Reduction Act (IRA)—a landmark climate package that helped spark record investment in clean energy over the past two years.
The proposal suggests ending the 30% federal residential solar tax credit by the end of 2025. This is nearly 10 years sooner than expected. This policy change could greatly affect companies in the solar industry.
Understanding the Proposed Policy Change
The residential solar tax credit, or Solar Investment Tax Credit (ITC) is Section 25D of the U.S. Tax Code. It lets homeowners claim 30% of the cost of installing solar panels. This credit appears on their federal tax returns.
The credit, part of the Inflation Reduction Act, was to last until 2032. It will start to decrease gradually in 2033. The schedule is below. However, the new proposal aims to terminate this credit by December 31, 2025.
Experts warn that this sudden change might raise costs for consumers. It could also lower demand for residential solar installations and lead to job losses in the sector. Small solar installation businesses often rely on credit for competitive pricing. This makes them especially vulnerable.
The solar industry has expressed strong opposition to the proposed cuts. Many stakeholders say the tax credit has helped grow residential solar. It creates jobs and promotes energy independence.
The Solar Energy Industries Association says the residential solar market has grown 10x in the last ten years. The tax credit has played a big part in this growth.
The proposal passed the House Ways and Means Committee. However, it still has many hurdles to clear before it can become law. Some lawmakers, including Republicans from areas that benefit from clean energy investments, are worried about the possible negative effects of the cuts.
The final outcome will depend on negotiations in both the House and Senate.
Policy Uncertainty and Its Limits
For many solar developers, these changes could signal uncertainty and disruption. For SolarBank, a developer focused on community and commercial-scale solar (as opposed to residential solar installations), the path forward remains steady. This is due to careful planning, strategic focus, and a shift in business model that favors long-term sustainability.
The company’s CEO, Dr. Richard Lu, says the company’s business model is largely shielded from this turbulence, saying:
“Over the next several years we are not expecting any major changes or challenges from the potential changes to federal solar tax incentives. Support for our community solar projects comes at a state level, and we only focus on the 22 states that have community solar policy.”
This is a key distinction. SolarBank focuses on commercial, industrial, and community solar projects. Unlike residential solar companies, it benefits from strong state mandates and incentives.
Moreover, the timeline for scaling back federal tax credits for commercial solar systems doesn’t begin until 2028 or 2029. SolarBank has already factored that into its long-term planning. Dr. Lu emphasized this, noting:
“We work with industrial and commercial large-scale solar projects, and not residential. The schedule to reduce tax incentives… has already been included in our operations to mitigate the effect.”
Resilience Through Integration
SolarBank isn’t shaken by the headlines. Instead, it is strengthening its operations. Its resilience comes from a vertically integrated model. This model covers development, construction, and long-term operations and maintenance.
This structure helps the company control costs, speed up deployment, and rely less on uncertain external factors. Dr. Lu stated:
“We have a vertically integrated system… which gives us the capability to manage our costs and simplify our process. This is really where our lean set up is competitive.”
That competitiveness is especially important in a rapidly evolving energy market. AI data centers, electric vehicles, and digital industries are driving high electricity demand.
Data center power use in the U.S. will grow twofold in 2030 due to AI. Meanwhile, traditional energy systems are having a tough time keeping up.
SolarBank sees this mismatch as an opportunity. The company can meet rising energy needs by staying agile and keeping costs in check, that is faster than many big, slower competitors.
Shifting from Build-to-Sell to Build-to-Own
In response to both market evolution and policy unpredictability, SolarBank is also adjusting its core business strategy. Once focused on a build-to-sell model, the company is now emphasizing build-to-own projects.
The CEO noted that this shift aims to create a more stable revenue base, making SolarBank less reliant on one-off transactions and external funding sources. He said:
“This will boost our long-term recurring revenue. It makes it easier to take on new projects with less external funding.”
This change also helps the company hedge against potential federal funding shortfalls. SolarBank can continue to grow by attracting private investment and forming strategic partnerships. This will help, even with solar tax credit challenges.
A recent collaboration with Qcells, involving the use of U.S.-manufactured solar modules, is one example of how the company is preparing for multiple future scenarios. SolarBank has the following project pipeline that will bring significant growth to the company:
A Message for Policymakers
The company is confident in its own path. However, Dr. Lu emphasized the broader value of maintaining federal support for clean energy—especially for community solar and distributed energy systems. He remarked:
“Consistent and long-term support… is not just an investment in clean energy but also in social equity and economic resilience.”
Community solar programs are especially important for expanding access to renewable energy among low- and moderate-income households, renters, and underserved communities. Without strong policy support, these groups risk being left behind in the clean energy transition.
Dr. Lu added:
“Stable policies and incentives are crucial for planning and investment. By supporting these initiatives, policymakers can drive job creation, foster local economic development, and advance national goals for carbon reduction and climate resilience.”
What’s The Future for Solar?
SolarBank’s calm response shows its strong position, even if the headlines are unsettling. The company is ready to succeed by using state support, seeking private investment, and adjusting its business model. This approach helps it thrive despite federal uncertainty.
Still, the broader industry faces real questions. Will Congress follow through with proposed rollbacks? Can community solar continue to grow if the tax credits vanish? And what does this mean for energy equity in the U.S.?
For now, SolarBank believes that its focus on fundamentals, policy-savvy expansion, and forward-thinking leadership will carry it through.
- READ MORE: SolarBank and CIM Group Announce $100M Financing to Power 97 MW of U.S. Renewable Energy Projects
This report contains forward-looking information. Please refer to the SolarBank press release entitled “SolarBank Announces Third Quarter Results” for details of the information, risks and assumptions.
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The post SolarBank Stays Strong as Trump’s Clean Energy Rollbacks Loom appeared first on Carbon Credits.
The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
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