A small solar company in Montana is preparing for mass layoffs as proposed federal budget cuts threaten to eliminate a key clean-energy tax credit, putting its entire business model at risk.
At a Glance
- A Missoula-based solar firm grew from 6 to 15 employees under owner Ralph Walters since 2020
- House Republicans have proposed eliminating the 30% Residential Clean Energy Credit
- Without the credit, solar installations could drop sharply in rural areas like Montana
- The company may have to lay off two-thirds of its workforce if the credit is repealed
- Walters has warned his entire staff, emphasizing transparency amid uncertainty
How Policy Shifts Hit Small Solar Firms
At the heart of the crisis is the proposed repeal of the Residential Clean Energy Credit, a 30% federal tax incentive that subsidizes the cost of home solar installations. Without it, many cost-conscious customers may forgo solar entirely—especially in rural or conservative regions where adoption is driven more by self-reliance than ideology.
Ralph Walters, who acquired SBS Solar in Missoula in 2020, has grown the team from six to fifteen, providing stable, full-time jobs with benefits. But those gains now hang in the balance. He anticipates cutting down to five employees if the credit disappears, stating, “We’ll go from full-time professionals to a scramble for survival.”
Watch a report: Montana solar firm faces layoffs as Congress eyes tax-credit rollback.
Nationwide, the industry is already showing signs of stress. Over 100 solar companies have declared bankruptcy since 2023, many blaming financial instability linked to shifting incentives and rising interest rates. In California, a rollback of similar state incentives triggered an estimated 17,000 layoffs.
Inside the Fallout: Transparency and Tension
In a rare move for a small business, Walters held a company-wide meeting to inform his staff of the possible layoffs well in advance. His approach—founded on transparency—has so far helped maintain morale, with no resignations despite the dire outlook.
His employees have built lives around the jobs they believed were secure. “People have bought homes, gotten married, and made life plans,” Walters told Business Insider. The looming repeal isn’t just a business problem—it’s a personal crisis for the team.
This kind of vulnerability, however, may be common in a high-growth but low-margin sector. Industry insiders on forums like Reddit’s solar subreddit echo a stark truth: rapid expansion and thin profits make solar firms especially vulnerable to policy shocks.
A Policy Test With National Stakes
The situation in Montana underscores a broader tension between federal budget politics and climate action. Tax credits like the Residential Clean Energy Credit are central to making renewables financially viable for average homeowners. Removing them could slow adoption, increase emissions, and stall national decarbonization efforts.
What’s more, abrupt policy reversals can destabilize markets, scare off investors, and erode public trust. For solar entrepreneurs like Walters—and the thousands of workers depending on this industry—the message from Washington may shape not only profit margins, but futures.
